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Bridging Loans - UK - July 2018

“Despite uncertain progress in Brexit negotiations, several stagnant economic growth indicators, and potential interest rate rises over the next year, the industry has performed well in a difficult environment. Whilst some lenders have left the market, others have entered and continue to adapt and cater to borrowers’ specific funding needs – something that mainstream lenders are still slow to undertake.”
– Lewis Cone, B2B Analyst

This Report looks at the following areas:

  • Market expected to rise in 2018
  • Commercial lending represents largest aspect of the market
  • Mortgage delays represent most common use of loans
  • Aggregated loan balances forecast to rise to 2023
  • Rapid market expansion has led to negligible rise in share of total mortgage lending

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Market expected to rise by 20% in 2018
              • Figure 1: UK bridging loans market value, in aggregated loan balances, 2014-18, (£ billion and % annual change)
            • Commercial lending represents largest aspect of the market
              • Figure 2: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2014-18, (£ billion)
            • Mortgage delays represent most common use of loans
              • Aggregated loan balances forecast to rise by 36% to 2023
                • Figure 3: Forecast UK bridging loans market value, in aggregated loan balances, 2019-23, (£ billion and % annual change)
              • Rapid market expansion has led to negligible rise in share of total mortgage lending
                • Figure 4: ASTL gross mortgage lending estimates, 2014-18, (£ million and %)
              • Companies and brands
                • Low interest rate environment attracts new entrants
                  • What we think
                  • Key Insights

                    • Market oversaturation
                      • The facts
                        • The implications
                          • Changes to HMO licensing could increase demand
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Bridging returns to stronger growth
                                  • Commercial lending represents largest aspect of the market
                                    • Aggregated loan balances forecast to rise by 36% to 2023
                                    • Market Size

                                      • Bridging returns to stronger growth
                                          • Figure 5: UK bridging loans market value, in aggregated loan balances, 2014-18, (£ billion and % annual change)
                                        • Most recent data for 2018 suggests growth will continue
                                        • Market Segmentation

                                          • Commercial lending represents largest aspect of the market
                                              • Figure 6: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2014-18, (£ billion)
                                            • Loan purpose
                                              • Figure 7: UK bridging loans market value segmentation, by loan purpose and in aggregated loan balances, 2017 and 2018, (% of bridging loans and value in £ billion)
                                            • Landlords reallocate investment from residential to commercial
                                            • Market Forecast

                                              • Aggregated loan balances forecast to rise by 36% to 2023
                                                • Figure 8: Forecast UK bridging loans market value, in aggregated loan balances, 2019-23, (£ billion and % annual change)
                                              • Housebuilders and development expected to drive growth
                                                  • Figure 9: Forecast UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2019-23, (£ billion)
                                              • The Impact of the Economy

                                                • GDP growth slowed in 2017 with further challenges ahead
                                                  • Figure 10: GDP growth rate, Q1 2014-Q1 2018, (% change on previous quarter)
                                              • Market Trends

                                                • Commercial property remains most likely route to growth whilst residential sector continues to slow
                                                    • Figure 11: Halifax and nationwide house price index, by annual change per quarter, Q1 2010-Q1 2018, (%)
                                                  • Rapid market expansion has only led to negligible rise in share of total mortgage lending
                                                    • Figure 12: ASTL gross mortgage lending estimates, 2014-18, (£ million and %)
                                                  • Other trends
                                                    • Regulated and unregulated loans
                                                      • Average LTVs and split between 1st and 2nd charge loans
                                                        • Average interest rate
                                                          • Average loan term
                                                          • Market Drivers

                                                            • Brexit uncertainty still affecting lending environment
                                                              • Demand for property and rising refurbishments drive bridging finance
                                                                  • Figure 13: Number of residential property transactions, 2013-17, (number, seasonally adjusted)
                                                                  • Figure 14: Number of non-residential property transactions, 2013-17, (number, seasonally adjusted)
                                                                • SME funding gap still providing opportunities
                                                                    • Figure 15: Company insolvencies in England and Wales, 2013-17, (number)
                                                                • Regulation

                                                                    • The EU Mortgage Credit Directive
                                                                      • Buy-to-let mortgages
                                                                        • The Small Business, Enterprise and Employment Act
                                                                          • Stamp duty changes
                                                                            • Energy Performance Certificate changes
                                                                            • Companies and Brands – What You Need to Know

                                                                              • Low interest rate environment attracting new entrants
                                                                                • Smaller loans offered to target regions outside of London and the South East
                                                                                • Industry Structure

                                                                                  • Industry development
                                                                                    • Market entrants & exits
                                                                                      • Lender overview
                                                                                        • Figure 16: Bridging lenders’ activity and product detail, by lender, 2018
                                                                                    • Competitive Strategies

                                                                                      • Lenders set to offer higher LTVs to meet broker demand…
                                                                                        • ...as well as lowering interest rates
                                                                                          • Smaller loans offered to target regions outside of London and the South East
                                                                                          • Company Profiles

                                                                                            • Amicus Finance
                                                                                              • Recent company activity
                                                                                                • Financial information
                                                                                                  • Figure 17: Financial analysis of Amicus Finance, 2013-17, (£ 000)
                                                                                                • Oaksix Holdings Limited (formerly Fortwell Capital)
                                                                                                  • Recent company activity
                                                                                                    • Financial information
                                                                                                      • Figure 18: Financial analysis of Oaksix Holdings Limited (formerly known as Fortwell Capital), 2013-17, (£ 000)
                                                                                                    • Octopus Property
                                                                                                      • Recent company activity
                                                                                                        • Financial information
                                                                                                          • Figure 19: Financial analysis of Bridgeco Ltd, 2012-16, (£000)
                                                                                                          • Figure 20: Financial analysis of Fern Trading Ltd, 2013-17, (£000)
                                                                                                          • Figure 21: Financial analysis of Octopus Property Limited (formerly Rednel), 2013-17, (£000)
                                                                                                        • Shawbrook Bank
                                                                                                          • Recent company activity
                                                                                                            • Financial information
                                                                                                              • Figure 22: Financial analysis of Shawbrook Bank, 2013-17, (£000)
                                                                                                            • Together Commercial Finance
                                                                                                              • Recent company activity
                                                                                                                • Financial information
                                                                                                                  • Figure 23: Financial analysis of Together Commercial Lending, 2013-17, (£ 000)
                                                                                                                • United Trust Bank
                                                                                                                  • Recent company activity
                                                                                                                    • Financial information
                                                                                                                      • Figure 24: Financial analysis of United Trust Bank, 2013-17, (£000)
                                                                                                                    • West One Loans
                                                                                                                      • Recent company activity
                                                                                                                        • Financial information
                                                                                                                          • Figure 25: Financial analysis of West One Loan, 2012-16, (£000)
                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                          • Abbreviations
                                                                                                                            • Methodology
                                                                                                                            • Further Sources and Contacts

                                                                                                                              • Trade associations
                                                                                                                                • Association of Short Term Lenders
                                                                                                                                  • Financial Intermediary & Broker Association (FIBA)
                                                                                                                                    • National Association of Commercial Finance Brokers
                                                                                                                                      • Trade magazines
                                                                                                                                        • Bridging & Commercial
                                                                                                                                          • Business Matters
                                                                                                                                            • Commercial Reporter
                                                                                                                                              • Loans Insider
                                                                                                                                                • Mortgage Finance Gazette
                                                                                                                                                  • Mortgage Introducer
                                                                                                                                                    • Mortgage Strategy
                                                                                                                                                      • Trade events
                                                                                                                                                        • Financial Services Expo London 2018
                                                                                                                                                          • NACFB Commercial Finance Expo 2019
                                                                                                                                                            • The Finance Professional Show

                                                                                                                                                            Bridging Loans - UK - July 2018

                                                                                                                                                            US $1,343.55 (Excl.Tax)