The annual EY UK Bridging Market Survey, in collaboration with Bridging & Commercial, offers a fascinating, in-depth, analysis of this ever-evolving sector and always serves to uncover plenty of statistical gems to focus on, and this year is certainly no different.

Continued bridging growth

Working my way through this 2024 survey, it was a huge positive to see 67% of participants expecting the bridging market to grow.

There are always contrasting figures being bandied around when it comes to house prices, figures which can fluctuate depending on which headline you read on any given day. However, the past 12 to 18 months have demonstrated the highly robust nature of the UK housing market and a slow but steady rise in confidence levels as a range of borrowers adjust to a new interest rate environment.

This confidence certainly appears more evident in those property professionals who remain ahead of the curve and are positioned to take advantage of property-related opportunities as they arise. Many of whom are maximising the benefits of alternative forms of finance beyond the high street to tap into the potential on offer. And I expect the reliance on bridging finance to grow even further over the course of 2024 as mainstream lenders struggle to shake off affordability and criteria constraints.

Lengthening completion times

Lengthening completion times are still concerning but there are a large number of factors involved and it’s difficult to read too much into these figures as lender participants may use different timescales to measure this journey. Although, it remains prudent to point out the importance of the role played by packagers in speeding up these times. Specifically when considering our average of 29.3 days from enquiry to funds over the past 12 months.

A rise in the number of auction purchases

The rise in auction purchases is also noteworthy. This was reported to be the second most popular reason for obtaining a bridging loan after being cited by 19% of respondents, compared to 7% the previous year.

The increased presence and profile of online auctions has bolstered its appeal and made the buying process less daunting as more buyers are experiencing first-hand the value of auction as an alternative method of sale and benefitting from the speed, security and certainty on offer.

This follows a record-breaking quarter of sales, with capital value raised for vendors surpassing £450m for the first time. This figure comes from iamproperty, which reported the most active auction market seen to date within its Q1 Online Auction Index.

Between January and March, the Index showed that the PropTech firm supported estate agents in selling 2,588 properties via auction, an increase of 14% compared to the same period last year. Heightened activity across the quarter also saw its Partner Agent network benefit from over £9.5m in auction fees, which represented an increase of 23% vs Q1 2023.

The importance of speed of execution, lender reputation and relationship management

In addition, it was also interesting to see that speed of execution, lender reputation and relationship management continued to be the top three most important qualities to a customer or broker when choosing a bridging lender.

These certainly resonate with us as a business and our 20 years plus operating in the short-term lending arena. Experience, the strength of relationships and understanding which lender suits which type of project/bridging loan are key to getting deals successfully placed and supported through to completion. There is always more to bridging than rate. It’s about knowing the lenders sweet spot in terms of the type of application they will accept and then delivering a fully packaged case which allows them to make a quick decision and meet even the tightest of deadlines. And this is why advisers will continue to turn to their trusted specialist packaging partners time and time again.

Donna Francis, Managing Director at Envelop