Bridging finance reached almost £5bn in 2019, and despite the current economic climate, it’s continued to grow year on year, with a staggering 46% rise in Bridging loan volumes in Q3 2020*.
Why is this?
There has been a shift in the way people live their lives, no longer does the average customer work 9-5, is employed, has one income or one home.
The average life expectancy has increased, people are experiencing the successes of being self-employed, and how it can work around their lives and family. The average age of first-time buyers has risen to age 34** and individuals who are self-employed in the UK reached 5 million earlier this year, up from 3.2 million in 2000***. And investing in property is now either a full source of income to some, or used as a side hustle alongside full time work. How many people do we know who have a full time employed job and side hustle as a landlord?
Enter Bridging Finance
Short term finance has becoming an increasingly viable and appealing option for businesses and investors. Once a very specialist and niche area, it’s now increasingly being used for investment purposes, and small businesses are seeing the benefit of this.
Here at SoMo we are seeing the demand for short term finance, we’ve had a steady increase over the last 8 years, especially in second charge bridging loans, for example customers who would like to purchase a property abroad, securing against their first charge residential property within the UK. This is slightly contradictory to the latest Bridging Trends report, which states that only 18% of bridging loans were for a second charge purpose. We however feel there’s a real opportunity in this space. There’s still a need to support the industry in educating the market around the opportunity short term finance can bring, and how Bridging as a short term solution can be a viable option to so many, who may have been rejected by the mainstream lenders.
*Bridging Trends, Q3 2020
**Finder.com
***ons.gov.uk
Categories: Broker News, Borrower News, Investor News, SoMo News
