Table of Contents
Executive Summary
-
- Market size
- New regulation and recent business uncertainty has dampened growth, but industry remains positive
-
- Figure 1: UK Bridging Loans Market Value, in Aggregated Loan Balances, 2013-2017, (£ Billion)
- Commercial loans top development sector for first time in three years
-
- Figure 2: UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2013-2017, (£ Billion)
- Mortgage delays continue to represent most common use of bridging loan
-
- Figure 3: UK Bridging Loans Market Value Segmentation, by Loan Purpose, 2017, (% of Bridging Loans)
- Market trends
- Rising levels of regulatory measures leading drive in the number of regulated bridging loans
- Bridging interest rates continue to fall with no sign of slowdown in competition
- Slow flow of SME finance continues to provide lending opportunity
- Rate of market expansion not reflected in similar rise in share of total mortgage lending
- Market factors
- ‘Brexit’ uncertainty will affect lending environment...
- ... and has led to strategic changes following a squeeze on funding lines
- Industry Structure
- Forecast
- Aggregated loan balances forecast to rise by 49% to 2022
-
- Figure 4: Forecast UK Bridging Loans Market Value, in Aggregated Loan Balances, 2018-2022, (£ Billion)
- Strong, persistent investor interest in commercial sector will drive growth
-
- Figure 5: Forecast UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2018-2022, (£ Billion)
- What we think
Key Insights
-
- How has the industry been affected following the start of Brexit negotiations and the uncertainty caused by the recent general election?
- How has the industry changed following the implementation of new regulatory measures?
- After recording significant growth over the last decade, have other lenders attempted to disrupt this growth by offering rival products?
- Can widening the use of technology further shorten the bridging loan process and improve efficiency?
Introduction
-
- Definitions
- Methodology
- Abbreviations
Market Positioning
-
- Associations have helped promote the industry in the alternative finance market
UK Economy
-
- Key points
- Overview
-
- Figure 6: UK GDP, 2007-2017, (% Quarterly Growth and GDP in £ Billion)
- Figure 7: UK Output, by Industry, 2008-2017, (Index 2013 = 100)
-
- Figure 8: Quarters after GDP Peak, 1979, 1990 and 2008, (Number of Quarters and GDP as % of PreDownturn Peak)
- Inflation
- Interest rates
- House prices
-
- Figure 9: UK House Price changes, 2006-2017, (12-month % change)
- Consumer spending
- Manufacturing
-
- Figure 10: UK Manufacturing, 2014-17, (Index, 2013 = 100)
- Business investment
-
- Figure 11: UK GFCF 2006-2017, (£ Million)
- Imports
- Exports
Market Factors
-
- Key points
- Brexit uncertainty will affect lending environment...
- ... and has led to strategic changes following a squeeze on funding lines
- Access to finance remains a barrier to bridging loan use
- Annual GDP growth rises in 2016, but challenging times emerge
-
- Figure 12: GDP growth rate, Q1 2013-Q1 2017, (% change on previous quarter)
- Figure 13: GDP Growth Rate, Q1 2013 - Q1 2017, (% change on previous quarter)
- Property market still providing lending opportunities despite growing uncertainty
-
- Figure 14: Number of Residential Property Transactions, 2012-16, (Number, Seasonally Adjusted)
- Figure 15: Number of Residential Property Transactions, 2012-2016, (Number, Seasonally Adjusted)
-
- Figure 16: Number of Non-Residential Property Transactions, 2012-16, (Number, Seasonally Adjusted)
- Figure 17: Number of Non-Residential Property Transactions, 2012-2016, (Number, Seasonally Adjusted)
-
- Figure 18: Company Insolvencies in England and Wales, 2012-16, (Number)
- Figure 19: Company Insolvencies in England and Wales, 2012-2016, (Number)
- Legislation and regulation
- The EU Mortgage Credit Directive
- Buy-to-let mortgages
- The Small Business, Enterprise and Employment Act
- Stamp duty changes
- FCA clampdown on unregulated activity
Market Size
-
- Key points
- New regulation and recent business uncertainty has dampened growth, but industry remains positive
-
- Figure 20: UK Bridging Loans Market Value, in Aggregated Loan Balances, 2013-2017, (£ Billion and % Annual Change)
-
- Figure 21: UK Bridging Loans Market Value, in Aggregated Loan Balances, 2013-2017, (£ Billion)
Market Segmentation
-
- Key points
-
- Figure 22: UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2013-2017, (£ Billion)
-
- Figure 23: UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2013-2017, (£ Billion)
- Loan purpose
-
- Figure 24: UK Bridging Loans Market Value Segmentation, by Loan Purpose and in Aggregated Loan Balances, 2016 and 2017, (% of Bridging Loans and Value in £ Billion)
-
- Figure 25: UK Bridging Loans Market Value Segmentation, by Loan Purpose, 2017, (% of Bridging Loans)
Market Trends
-
- Key points
- Rising levels of regulatory measures driving the number of regulated bridging loans
- Borrowers now use bridging for a variety of reasons
- Bridging interest rates continue to fall with no sign of slowdown in competition
-
- Figure 26: AOBP Bridging Market Trend Report, Average Interest Rate, September 2013 - March 2016, (%)
-
- Figure 27: AOBP Bridging Market Trend Report, Average Interest Rate, September 2013 - March 2016, (%)
- Emergence of ‘re-bridging’ has caused alarm
- Slow flow of SME finance continues to provide lending opportunity
- Commercial property offering bridgers a route to growth while residential sector stagnates
-
- Figure 28: Halifax and Nationwide House Price Index, by Annual Change per Quarter, Q1 2009 - Q2 2017, (%)
-
- Figure 29: Halifax and Nationwide House Price Indices, by Annual Change per Quarter, Q1 2009 - Q2 2017, (%)
- Other industry trends
- LTVs tend to fall in latter stages of a year
-
- Figure 30: AOBP Bridging Market Trend Report, by Sector, Average Loan-to-Value, September 2013 - March 2016, (%)
- Figure 31: AOBP Bridging Market Trend Report, Average Loan-to-Value, September 2013 - March 2016, (%)
- Rate of market expansion has not led to similar rise in share of total mortgage lending
-
- Figure 32: ASTL Gross Mortgage Lending Estimates, 2013-2017, (£ Million and %)
-
- Figure 33: ASTL Gross Mortgage Lending Estimates, 2013-2017, (£ Million and %)
Industry Structure
-
- Key points
- Industry development
- Lenders conducting more regulated lending, but unregulated still dominates despite FCA concern
- ASTL membership doubles in five years as drive towards responsible and transparent lending continues
- More lenders extend offerings to Scotland to exploit gap in the market
- Aldermore exit serves as warning to new entrants seeking high returns
- Lender overview
-
- Figure 34: Bridging Lenders’ Activity and Product Detail, by Lender, 2017
Company Profiles
Alternative Bridging Corporation
-
-
- Figure 35: Financial Analysis of Alternative Bridging Corporation Limited, 2012-2016, (£ 000)
- Company strategy
-
Amicus Finance (formerly Capital Bridging Finance)
-
-
- Figure 36: Financial Analysis of Amicus (formerly Capital Bridging Finance), 2012-2016, (£ 000)
- Company strategy
-
Boost Capital (formerly Business Financial Services (UK))
-
-
- Figure 37: Financial Analysis of Boost Capital (formerly Business Financial Services (UK)), 2012-2015, (£ 000)
- Company strategy
-
Commercial Acceptances
-
-
- Figure 38: Financial Analysis of Commercial Acceptances, 2012-2016, (£ 000)
- Company strategy
-
Fortwell Capital (formerly Omni Capital Partners)
-
-
- Figure 39: Financial Analysis of Fortwell Capital, 2012-16, (£ 000)
- Company strategy
-
Goldentree Financial Services
-
-
- Figure 40: Financial Analysis of Goldentree Financial Services, 2012-2016, (£ 000)
- Company strategy
-
Hope Capital
-
- Company strategy
MT Finance
-
- Company strategy
Oblix Capital
-
- Company strategy
Octopus Property (formerly known as Dragonfly Property Finance)
-
-
- Figure 41: Financial Analysis of Bridgeco Ltd, 2011-2015, (£ 000)
-
- Figure 42: Financial Analysis of Fern Trading Ltd, 2012-2016, (£ 000)
-
- Figure 43: Financial Analysis of Rednel, 2013-2016, (£ 000)
- Company strategy
-
Shawbrook Bank
-
-
- Figure 44: Financial Analysis of Shawbrook, 2012-2016, (£ 000)
- Company strategy
-
Together Commercial Finance Ltd (formerly Lancashire Mortgage Corporation)
-
-
- Figure 45: Financial Analysis of Together Commercial Lending (formerly Lancashire Mortgage Corporation), 2012-2016, (£ 000)
- Company strategy
-
United Trust Bank
-
-
- Figure 46: Financial Analysis of United Trust Bank, 2012-2016, (£ 000)
- Company strategy
-
West One Loans
-
-
- Figure 47: Financial Analysis of West One Loan, 2012-2016, (£ 000)
- Company strategy
-
- Figure 48: Profiled Companies’ Combined Turnover, 2012-2016, (£ Million)
-
Forecast
-
- Key points
- Aggregated loan balances forecast to rise by 49% to 2022
-
- Figure 49: Forecast UK Bridging Loans Market Value, in Aggregated Loan Balances, 2018-2022, (£ Billion and % Annual Change)
-
- Figure 50: Forecast UK Bridging Loans Market Value, in Aggregated Loan Balances, 2018-2022, (£ Billion)
- Strong, persistent investor interest in commercial sector will drive growth
-
- Figure 51: Forecast UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2018-2022, (£ Billion)
-
- Figure 52: Forecast UK Bridging Loans Market Value Segmentation, in Aggregated Loan Balances, by Sector, 2018-2022, (£ Billion)
- Reduction in buy-to-let activity could dampen growth
- Bridgers offered help to overcome possible funding line struggles
Further Sources and Contacts
-
- Trade associations
- Trade magazines
- Trade exhibitions
Back to top