Development finance 'hotter' than bridging market, brokers say

The short-term property finance lender polled the views of brokers in the industry at an event to mark the opening of their new HQ in Hertfordshire.

While two in every five brokers (38%) told TAB they thought the bridging loan market was still hotter, nearly half (46%) told the lender that the development finance market was hotter. One in seven (15%) of the bridging introducers polled weren’t sure.

A record number of planning applications for extensions and home improvements were approved last year. According to the latest official planning statistics, in the 12 months to the end of last September, 247,500 consents were granted in England, 36% higher than the number signed off in the year before - and a fifth above the pre-pandemic norm.

TAB says its lending data supports what brokers are saying. In 2021, bridging loans represented 80% of the value of the lending enquiries. In 2022, this has dropped to 64%. Similarly, development finance accounted for 13% of the enquiries in 2021 - compared to 31% since the start of 2022.

Duncan Kreeger, founder and CEO of TAB, said: “The bridging market has been buoyant since 2005 but it took off in the wake of the credit crunch in 2007/8. Since then it’s been white hot. We’re now just beginning to see the development finance space take over. We are seeing more and more interest from brokers looking for fast, short to medium term access to capital on behalf of clients who need to finance the construction, conversion and refurbishments of property projects.”