The latest findings from the Castle Trust Bank Pulse survey have painted an optimistic picture for the future of bridging loans in the UK. According to the survey, a significant 68% of brokers anticipate they will handle more bridging loans in 2024 than they did in 2023. This promising data indicates that the demand for quick, short-term financing solutions is on the rise among property investors.

Brokers are not just expecting a marginal increase in their bridging loan business; a considerable portion of them are preparing for substantial growth. Specifically, 25% of the brokers surveyed are predicting a ‘good increase’ in their bridging business for the upcoming year. Additionally, 43% expect the business to be ‘slightly higher’ than the current levels. This collective optimism suggests that the bridging loan market is becoming increasingly attractive and accessible.

Steady Demand Amongst Some

Despite the overall positive trend, there remains a segment of brokers who believe the market will stabilise rather than expand. About 21% of the brokers surveyed anticipate that the demand for bridging loans will remain consistent with this year’s figures. This perspective highlights the cautious optimism that still permeates parts of the financial sector.

Minor Concerns About Decline

While the majority of brokers are optimistic, a small group — 11% — express concerns about a potential decrease in the volume of bridging loan business. These concerns likely stem from the inherent uncertainties in the property and finance markets.

Driving Factors Behind the Demand

The survey revealed that more experienced property investors are primarily driving the increased demand for bridging loans. In 2023, 42% of brokers reported arranging more bridging loans than in the previous year. This contrasts with 38% of brokers who observed a decline in such arrangements for first-time investors, suggesting that seasoned investors are more actively leveraging these financial tools.

Response to Growing Demand

In reaction to the burgeoning demand for bridging finance, brokerage firms have been actively expanding their teams. 42% of respondents indicated that their team size increased over the past year, which not only reflects the growing market but also boosts the capacity to handle more business efficiently.

Perceived Risks to Future Growth

Despite the positive forecast, brokers identified several risks that could potentially hinder the growth of the bridging loan market. High on the list of concerns are high interest rates and political uncertainty. These factors are closely followed by concerns about property prices and a deteriorating economic environment, which could negatively impact the market dynamics.