Did economic uncertainties impact the market last year?
The UK bridging finance sector demonstrated resilience in 2024, maintaining strong lending volumes while improving operational efficiency, according to the latest Bridging Trends report.
The average completion time for bridging loans dropped by 23%, from 58 days in 2023 to 47 days in 2024. This reduction highlights improved efficiency among lenders and brokers as bridging finance becomes a more widely accepted funding solution.
Despite economic uncertainties linked to the general election and the Budget, the market remained stable. Annual contributor gross lending totalled £822.2 million, just 1% below the record £831 million in 2023, marking the second-highest lending volume since 2015.
Interest rates saw a modest increase, with the average monthly rate rising from 0.86% in 2023 to 0.88% in 2024, reflecting broader economic trends. However, lending remained balanced between regulated and unregulated transactions, indicating stable market conditions. Loan-to-value ratios averaged 58%, suggesting responsible lending practices despite the rate increase. The average loan term remained at 12 months for the eighth consecutive year.
Borrowing patterns shifted, with auction purchases rising from 7% to 11%, suggesting more landlords and investors are using bridging loans for quick acquisitions. Chain-break financing declined from 22% to 20%, while re-bridging fell from 9% to 7%, signalling improved borrower confidence and fewer extensions on initial bridging loans.
Data from Knowledge Bank showed that regulated bridging remained the most searched criterion among brokers in 2024, reinforcing its role as a key financing tool for property transactions.
“The 2024 Bridging Trends data paints a picture of a robust, resilient market that continues to adapt and thrive despite external pressures,” said Raphael Benggio (pictured), head of lending for bridging finance at MT Finance. “With faster completion times and steady lending volumes, these results show how bridging finance has evolved from an alternative solution to an essential component of the UK property finance landscape.”
Bridging Trends is a quarterly infographic created by short-term finance lender MT Finance to track the latest developments in the UK’s bridging finance market. The data is based on completions from several specialist finance packagers, including AFIG, Brightstar Financial, Capital B, Clever Lending, Clifton Private Finance, Complete FS, Enness, Impact Specialist Finance, LDNfinance, Optimum Commercial, Sirius Finance, and UK Property Finance. Knowledge Bank provided data on top broker criteria searches.
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