Demand for BTL bridging finance on the rise

Demand for BTL bridging finance on the rise

New data shows there is a growing demand for bridging loans from buy-to-let investors, with a 25% increase in bridging loans taken out in 2013, to fund property acquisition and refurbishment.

The research from Positive Bridging Finance reveals that the average bridging loan now stands at £220,000, up 5% year on year and that the average term is six months. The findings also indicate that buy-to-let investors are using bridging products to acquire terraces and town houses (36%), flats (29%) semi-detached (9%) and detached properties (5%).

Gross bridging reached £1.79 billion in year to August 2013, totalling £364 million July and August alone. According to John Waddicker, director of Positive Bridging Finance, more and more buy-to-let investors are realising the benefits of bridging finance to acquire and refurbish properties. 

He said: “While the availability of buy-to-let mortgages is improving, bridging provides fast, short term loans that are ideal for turning round properties quickly.

“With property prices increasing across the UK, many buy-to-let landlords are looking for below market value properties which will give them greater yields on rental income. Landlords are using bridging loans to finance the development of properties which they may be unable to secure mortgages for.  We have seen buy-to-let demand for bridging loans leap this year and we believe this will be a continuing trend throughout 2014.”