Latest news with #bridgingloans
The Independent
16-07-2025
- Business
- The Independent
Growing use of bridging loans to prevent residential collapse
West One Loans is a Business Reporter client UK home buyers and movers utilising Bridging loans to prevent chain breaks. The latest analysis by West One Loans, a leading provider of property finance and specialist mortgages, has revealed that there has been a significant increase in bridging market activity driven by homebuyers and sellers looking to avoid a chain-break, as collapsed property transactions cost an estimated £275.5 million during the first quarter of 2025 alone. West One Loans analysed the latest data from TwentyCI on the estimated volume of fall-throughs seen during Q1, the average cost of a fall-through to those involved, and the estimated total cost to the market over the first three months of the year. The data shows 78,855 failed transactions occurred across the UK property market in Q1, with each costing an average of £3,493. This equates to a total quarterly loss of £275.5 million, reflecting the scale of disruption and financial inconvenience that fall-throughs continue to cause. This marks a quarterly rise of 11.6% in the number of fall-throughs versus Q4 2024, and an even steeper annual increase of 23.5 per cent. At the same time, the average cost of a fall-through has climbed to £3,493, resulting in a 13.2% increase in total market losses quarter-on-quarter, and a 27.9 per cent rise compared to Q1 2024. This escalation is largely attributed to increased market activity as confidence has returned, though the uncertainty surrounding the 31st March stamp duty deadline also likely contributed to transaction volatility. To help mitigate the risk of fall-throughs, West One Loans has seen a notable increase in homeowners turning to bridging finance as a safety net. According to the latest Bridging Trends data, chain breaks have consistently ranked as the first or second most common reason for taking out a bridging loan over the past four quarters—closely followed by property investment purposes. Co-Head of Short-Term Finance at West One Loans, Thomas Cantor, commented: 'While bridging finance has long been viewed as a specialist tool for more niche segments of the market such as property investors and auction buyers, we're seeing a clear shift in how it's being used. Whilst it has always played a part within residential transactions, we're seeing a growing number of homebuyers and sellers now turning to bridging to salvage their purchase or sale when a chain breaks down. Bridging is no longer seen as a niche finance option and, as a result of this demand, we've introduced limited edition rates for this more vanilla flavour of regulated lending in order to further capture this segment of the market. In today's competitive market, speed and certainty are paramount—and this is where bridging really comes into its own, which in turn has caused it to be increasingly seen as a mainstream solution to help prevent a deal from collapsing.' Data tables and sources Estimated average cost of fall through based on source value and estimated according to inflation increases and legal fee increases and in line with the latest house price data.
The Independent
16-07-2025
- Business
- The Independent
Bridging loans forecast to hit £12 billion in 2025
West One Loans is a Business Reporter client Bridging loans are booming as borrowers seek speed, flexibility and short-term funding. Bridging lending saw record levels of growth in 2024, with data from the Bridging & Lending Developers Association (BDLA) showing that bridging completions hit a new record high of £2.30 billion during the final quarter of last year. The sector continues to boom, following a Q4 performance that saw the total loan book exceed £10 billion for the first time, with this figure forecast to hit £12.2 billion in 2025. This marked a 28.6 per cent increase on the previous quarter alone, pushing total completions to £7.34 billion for the year – up from £5.76 billion in 2023. Based on historic market trend data, West One Loans forecasts that this figure could hit £9.46 billion in 2025. As a result, the size of overall loan books exceeded £10 billion for the first time (£10.3 billion), with West One Loans also forecasting that this figure could top £12.2 billion by the end of the year. So what are the benefits of bridging? West One Loans has looked at the top seven reasons behind the current bridging sector boom. Speed and opportunity The most important factor is speed, with bridging loans taking an average of 38 days to arrange in Q4 2024. This provides an ideal solution for those who need to make quick decisions in order to take advantage of the opportunities on offer in the current market – for example, purchasing uninhabitable properties that a traditional lender may not finance. Flexible lending criteria and multiple uses Bridging lenders put a greater focus on asset value and exit strategy rather than credit history, and are not bound by the same laborious application and approval processes of conventional lenders. Bridging lending can also be used for multiple reasons, such as business needs, tax liabilities, debt consolidation or refurbishment. Short-term solutions Bridging finance is ideal for covering financial gaps and is ideal for scenarios where funding is needed for a purchase or renovation before an existing property can be sold. Higher LTV ratios Some bridging lenders offer up to 75 per cent loan-to-value, making it a far easier path to obtain significant funding. Customisable terms As with the flexible lending criteria, borrowers are able to negotiate terms to suit their individual needs, from custom interest payments to the repayment schedule itself. Again, this provides the flexibility that many borrowers require when it comes to traversing what has become an increasingly difficult landscape. Multiple users Bridging is accessible to a wide range of borrowers, from homeowners and property developers to landlords and business owners. This accessibility and the ability to tailor a bridging loan to the individual needs of the borrower is a driving factor behind the current boom. Exit strategies can reduce risk Finally, a well-planned exit strategy can make bridging a safe and effective solution, whether it's refinancing or selling a property. 'We've seen an incredible level of growth across the bridging sector over the past year, and this really highlights the vital role the sector plays within the UK property market, particularly as the landscape has become increasingly more turbulent and interest rates have climbed,' says Co-Head of Short-Term Finance at West One Loans, Thomas Cantor. 'It's fair to say that bridging has very much become a mainstream product and a vital tool in a developer's armoury. 'This is down to the many benefits the sector offers, not least the speed and flexibility a bridging loan can offer when securing short-term finance, as well as the fact that there are no early repayment penalties. 'It's these benefits that are enabling everyone, from property developers to landlords and homeowners to business owners, to progress with their plans without the restrictions that come via a more conventional lender – and we only anticipate that this current trend will intensify over the coming year.' Data tables and sources
