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Bridging activity rising thanks to tricky market

Bridging Finance

Difficult market conditions have driven the short-term lending markets, as the bridging sector surged by 67.6% to £278.8 million in the first quarter of 2023.

Bridging tends to come into its own when property transactions drag on for months, increasing the probability of a fall-through or chain break.

As these conditions are likely to persist for some time loan agency Apex Bridging predicted that activity will rise to £281.2 per quarter throughout 2024.

Chris Hodgkinson, managing director of Apex Bridging, said: “While we may have seen an uplift in bridging market activity during the pandemic, this was largely driven by increased volume, not volatility.

“However, in current cooling market conditions, the reliance on bridging is arguably greater due to the higher propensity for sales to drag on for some months, increasing the probability of a fall through and chain break.

“Although we’re yet to see any signs of a significant market decline, we do expect these trickier conditions to persist and, as a result, the reliance on bridging finance to become all the more pronounced as the year plays out.”

Bridging lending has increased by 21.8% per quarter since the market started to cool in Q3 of last year.