Unlocking Growth: Trending Areas in the Bridging Loan Market for 2024

Bridging finance in the UK is experiencing steady growth, driven by dynamic trends across various sectors. With increasing market stability, opportunities in bridging finance are set to expand, especially in London and other key regions such as the north of England. Research firm Mintel has predicted the value of the bridging loans market could almost reach £11 billion by the end of this year, with 25% growth estimated over the next five years.

Economic improvement

The stabilisation of the UK’s economic environment is fostering increased confidence in the bridging loan market. The recent General Election, with its decisive result, provides the new government with a large majority and clear mandate. It has already signalled that it wants new homes to be built across the length and breadth of the country and is looking at private developers to drive this policy forward.

The government’s top priority is economic growth and sees development as central to this. Large-scale housing developments create jobs, as do new infrastructure projects. For example, the Thames Gateway is the largest regeneration project in Europe and includes the largest designated brownfield site in the south of England.

There are other key reasons for the growth of the bridging finance market in London and elsewhere.

Industrial and commercial sectors on the rise

• The North of England: Cities like Manchester and Warrington are witnessing a rise in industrial opportunities. With local mayors wielding their devolved powers to improve their region’s economies and revitalise the local infrastructure, they have created a fertile ground for commercial bridging loans.
• Greater London: London’s suburbs and outskirts are becoming hotspots for commercial developments. Areas like Croydon and Barking are attracting investors due to favourable policies and connectivity improvements, making bridging loans a key option for those looking to finance their commercial projects.

Residential refurbishment projects

• London residential refurbishments: The demand for residential properties in London remains high and investors continue to buy homes in need of improvement. Bridging loans are increasingly popular for funding such refurbishment projects, allowing investors to renovate and quickly sell or lease properties at a profit.
• North of England: Cities such as Leeds and Newcastle are also seeing growth in residential refurbishment loans. These areas offer lower property prices with high rental yields, attracting investors seeking to maximise returns through strategic refurbishments.

Infrastructure development

• Infrastructure projects: Ongoing and upcoming infrastructure projects in key regions, including transportation and commercial developments, enhance the attractiveness of surrounding areas for investment. As a knock-on effect, they make areas more attractive places to live in, thus boosting demand for local property.

Conclusion

Bridging Loans provide developers and property investors with relatively fast access to funding, especially from lenders such as Alternative Bridging Corporation who have many years of experience providing bridging loans in London and across England & Wales.

As the UK economy continues to improve, investors and developers will be increasingly looking for opportunities to maximise the potential of their property portfolios and bridging finance will continue to be at the heart of the funding options available to them.