The majority of brokers are confident that this year will see an increase in bridge loan lending, a survey from Glenhawk shows.
Of the 100 brokers asked, 84% said they anticipate writing more business, with only 14% responding in the negative.
This, the lender says, is a consequence of the “defensive appeal of real estate as an asset class and the favourable sectoral headwinds experienced last year.”
And 74% of brokers say that permitted development will allow for more lending, although almost three quarters of brokers did concede that either less than 25% of their landlord clients or not have asked for permitted development compatible financing.
Additionally, 60% of brokers said their biggest obstacle in processing more bridging business was the placement of higher LTV cases, followed by 37%, who said it was securing finance for foreign nationals.
Glenhawk managing director Nick Hilton says: “These findings align with the exceptionally high levels of enquiries we have generated so far this year, with the market opportunity as Covid-19 fades into the distance set to grow considerably this year.
“At the same time, there remain challenges, noticeably the continued need for lenders to simplify and increase transparency for the borrower process, whilst more highly leveraged schemes will remain out of favour, especially if recent global events take on a more urgent focus.
“Furthermore, despite the welcome changes to permitted development last year and optimism about its potential, huge swathes of the market remain unaware of the opportunity, so there is a significant education piece to be undertaken in the coming months.”
This month, the Association of Short Term Lenders reported that bridging loan valuations hit a record £1.2bn in the fourth quarter of 2021, an increase of 19% compared to the third quarter.
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