2021
9
UK Bridging Loans Market Report 2021
2021-09-10T04:17:41+01:00
OX1050033
1495
142299
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Report
en_GB
“With the end of the coronavirus business support schemes on the horizon, it is expected that more borrowers, developers and businesses alike, will turn to bridging to provide them with…

UK Bridging Loans Market Report 2021

£ 1,495 (Excl.Tax)

Description

The UK Bridging Loans market report identifies consumer attitudes towards bridging loans, lenders, borrowers, and individual segments in the financial services market. This market report covers the market size, market forecast, market segmentation and industry trends for the Bridging Loans market in the UK. 

Current Market Landscape 

The COVID-19 pandemic put bridging lenders to the test, with underwriters and legal professionals having to quickly deal with enquiries even when working remotely, whilst at the same time, having to ensure there were strong, stable funding lines in place so loans could be issued without delay.

  • Despite a 10% fall in value in 2020, the bridging loans market value has risen by 24% over the last five years.
  • Excluding the 2020 decline, annual growth has averaged almost 15% since 2017, highlighting the continued significant development of the industry.

The circumstances surrounding the need for bridging loans has changed in the current economic climate. Deadlines are tight, and demand for residential real estate rising in the current economic climate. This means the ability to quickly turn around loans from application to deployment has become even more important for borrowers.

Future Market Trends in Skincare Ingredients and Format Trends

With the end of the coronavirus business support schemes on the horizon, it is expected that more borrowers, developers and businesses alike, will turn to bridging to provide them with the means to complete projects and to boost cash flow levels.

According to both the ASTL and MT Finance, the industry was significantly hit by the coronavirus pandemic shutdown in Q2 and Q3 2020 but still managed to complete some significant deals even through lockdown.

Read on to discover more details or take a look at all of our UK Household, Finances market research.

Quickly understand

  • The impact of COVID-19 on bridging loans and how lenders and borrowers will react to the new market conditions.
  • How the bridging loans market will adapt to the post-COVID-19 environment?
  • The value of individual segments in the market in 2020.
  • Small business owner attitudes towards and interest in bridging loans.
  • UK bridging loan market size.

The 2021 Bridging Loans Report Covers

Loan Types: Closed bridge, open bridge, residential, commercial, development, second charge.

Brands: Shawbrook Bank, Propp, Loans Warehouse, Brightstar Financial, Nivo, Glenhawk, Hope Capital, Enra, Pitch 4 Finance, Aspen Bridging, Octopus Real Estate, West One Loans, Together Commercial Finance, United Trust Bank

Expert analysis from a specialist in the field

This report, written by Lewis Cone, a leading analyst in the Finances sector, delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

With the end of the coronavirus business support schemes on the horizon, it is expected that more borrowers, developers and businesses alike, will turn to bridging to provide them with the means to complete projects and to boost cash flow levels.

Lewis Cone
Senior B2B Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: Market context
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • COVID-19 and bridging loans
      • Figure 1: Short-, medium-, and long-term impact of COVID-19 on Bridging Loans, 2020-25
    • The market
    • Aggregated loan balances forecast to rise by 53% to 2026 although annual growth will remain subdued
      • Figure 2: UK bridging loans market value, in aggregated loan balances and by sector, 2022-26, (£ billion)
    • Bridging declines in 2020 due to economic shutdown but rebounds in 2021
      • Figure 3: UK bridging loans market value, in aggregated loan balances, 2017-21, (£ billion)
    • Residential loans now dominant as commercial sector affected by current market
      • Figure 4: UK bridging loans market value segmentation, in aggregated loan balances and by sector, 2017-21, (£ billion)
    • Investment purchases will be the most common use of loans by the end of 2021
      • Figure 5: UK bridging loans market value segmentation, by loan purpose and in aggregated loan balances, 2020 and 2021, (% of bridging loans)
  3. Issues and Insights

    • SME housebuilding boom will provide opportunities but bridging lenders must tackle the competition to reap the rewards
    • Bridging remains behind others in respect of professional qualifications
  4. The Market – Key Takeaways

    • Bridging declines in 2020 due to economic shutdown but rebounds in 2021
    • Residential loans now dominant as commercial loans affected by current market
    • Aggregated loan balances forecast to rise by 53% to 2026 although annual growth will remain subdued compared to previous years
  5. Market Size

    • Bridging declines in 2020 due to economic shutdown but rebounds in 2021
      • Figure 6: UK bridging loans market value, in aggregated loan balances, 2017-21, (£ billion)
  6. Market Segmentation

    • Residential loans now dominant as commercial loans affected by current market
      • Figure 7: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2017-21, (£ billion)
    • Loan purpose
      • Figure 8: UK bridging loans market value segmentation, by loan purpose and in aggregated loan balances, 2020 and 2021, (% of bridging loans)
  7. Market Forecast

    • Short-, medium- and long-term impact on the industry
      • Figure 9: Short-, medium-, and long-term impact of COVID-19 on Bridging Loans, 2020-25
    • Market drivers and assumptions
      • Figure 10: Key drivers affecting Mintel’s market forecast, 2016-25, (in % annual change, % rate, and £ million)
    • Learnings from the last recession
      • Figure 11: Industry performance following the last recession, 2010-15, (£ billion)
    • Aggregated loan balances forecast to rise by 53% to 2026 although annual growth will remain subdued in comparison to previous years
      • Figure 12: Forecast UK bridging loans market value, in aggregated loan balances, 2022-26, (£ billion)
    • Development and refurb to drive growth as residential property boom ends and commercial market continues to struggle
      • Figure 13: Forecast UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2022-26, (£ billion)
  8. The Impact of the Economy

    • UK economy contracts by record 9.8% in 2020 due to COVID-enforced economic shutdowns
      • Figure 14: Annual GDP growth rate, 2016-21*, (%)
    • Bank rate remains at a record low of 0.1%
      • Figure 15: Bank rate, 2008-20, by date of adjustment, (%)
  9. Market Trends

    • Boom in residential house prices leads to demand for larger loans…
      • Figure 16: Halifax and Nationwide House Price Index, by annual change per quarter, Q1 2013 – Q2 2021, (%)
    • … but delays in completion are impacting industry development
    • Impact of pandemic offsets tightening mainstream mortgage lending criteria to reduce bridging’s share of total mortgage lending
      • Figure 17: ASTL gross mortgage lending estimates, 2017-21, (£ million and %)
    • Other trends
    • Regulated and unregulated loans
    • Average LTVs and split between first and second charge loans
    • Average interest rate
    • Average loan term
  10. Market Drivers

    • Last stamp duty holiday transaction surge, more positive non-residential property outlook, and rising house prices boost bridging’s appeal
    • Stamp Duty changes
    • House prices
    • Residential property transactions
      • Figure 18: Number of residential property transactions, 2016-17 to 2020-21, (seasonally adjusted)
    • Non-residential property transactions
      • Figure 19: Number of non-residential property transactions, 2016-17 to 2020-21, (seasonally adjusted)
    • Potential flood of insolvencies expected by year-end as government measures end, but lenders still have attractive entry points
      • Figure 20: Company insolvencies in England and Wales, 2016-20, (number)
    • More SMEs seeking external finance than ever before
  11. Companies and Brands – Key Takeaways

    • Bridging comparison site launched
    • Shawbrook Bank launches E-signatures
  12. Industry Structure

    • Industry development
    • Bridging comparison site launched
    • Several lenders form partnerships to help expand offerings
    • Major industry movements
    • Lender overview
      • Figure 21: Bridging lenders’ activity and product detail, by lender, 2021/22
  13. Competitive Strategies

    • First 4 Bridging teams up with Roma Finance to offer semi-exclusive loan
    • Shawbrook Bank launches E-Signatures
    • Fortwell Capital increases its lending capacity
    • Together partners with Legal & General to offer short-term finance through its digital platform
  14. Company Profiles

    • Aspen Bridging
    • Recent company activity
    • Financial information
      • Figure 22: Financial analysis of Aspen Bridging Limited, 2018-21, (£ 000)
    • Fortwell Capital
    • Recent company activity
    • Financial information
      • Figure 23: Financial analysis of Fortwell Capital, 2018*-20, (£ 000)
    • Octopus Real Estate
    • Recent company activity
    • Financial information
      • Figure 24: Financial analysis of Bridgeco Ltd, 2015-19, (£ 000)
      • Figure 25: Financial analysis of Fern Trading Ltd, 2016-20, (£ million)
      • Figure 26: Financial analysis of Nino Limited, 2016-20, (£ 000)
      • Figure 27: Financial Analysis of Octopus Co-Lend Limited, 2016*-20, (£000)
      • Figure 28: Financial Analysis of Octopus Healthcare Development Limited, 2016-20, (£000)
      • Figure 29: Financial Analysis of Octopus Investments Limited, 2016-20, (£000)
    • Shawbrook Bank
    • Recent company activity
    • Financial information
      • Figure 30: Financial analysis of Shawbrook, 2016-20, (£ million)
    • Together Commercial Finance
    • Recent company activity
    • Financial information
      • Figure 31: Financial analysis of Together Commercial Lending, 2016-20, (£ 000)
    • United Trust Bank
    • Recent company activity
    • Financial information
      • Figure 32: Financial analysis of United Trust Bank, 2016-20, (£ 000)
    • West One Loans
    • Recent company activity
    • Financial information
      • Figure 33: Financial analysis of West One Loan, 2016-20, (£ 000)
  15. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Methodology
  16. 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
    • Mortgage Finance Gazette
    • Mortgage Introducer
    • Mortgage Strategy
    • Trade events
    • Broker Expo
    • NACFB Commercial Finance Expo 2021
    • National Landlord Investment Show (London)
    • National Landlord Investment Show (Manchester)
    • The Finance Professional Show

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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