Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Bridging Loans - UK - July 2017

“Despite increased regulation, the industry has had many new entrants over the last two years. However, bridgers must be wary of there being a greater amount of funds available to borrowers than the number who actually need them.”
– Lewis Cone, B2B Analyst

This report will explore the following key issues regarding the bridging loans industry in the UK:

  • What are the key determinants driving the bridging loans industry?
  • Was the market affected by the result of the EU referendum? How has it responded?
  • Has regulation restricted industry development?
  • Can the sector withstand competition from other lenders in the years ahead?
  • What does the future hold for bridging finance?

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. 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

                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                          Bridging Loans - UK - July 2017

                                                                                                                                                                                          US $1,288.43 (Excl.Tax)