Half (51%) of brokers saw rising demand for bridging finance during the pandemic and only 3% saw a decrease, a survey from Masthaven Bank has revealed.
Despite having high interest rates bridging finance has numerous uses, as it can be used to buy properties before they are mortgageable.
Seven in 10 (71%) brokers said that awareness of bridging finance is growing across the market
Richard Deacon, sales director at Masthaven, said: “The pandemic has proved uniquely stressful and disruptive for the UK housing market, even while property prices and transaction levels have climbed to new highs.
“Bridging finance has always been a useful tool, but in the current market it has really come into its own, growing in popularity as both brokers and borrowers look for flexible short-term finance solutions.
“Increasingly, these solutions have come from the specialist sector, which has worked hard to innovate and provide customers with the right tools to navigate this busy period.
“The factors pushing borrowers towards bridging may have been boosted by the pandemic, but they’re not going away any time soon. Bridging finance is no longer just an emergency option for borrowers, it has become truly mainstream.
“As awareness of the power and utility of bridging continues to grow, it will be increasingly important that lenders work hard to make their products competitive and accessible.”
When asked about what is currently fuelling this boom in bridging finance, brokers cited a number of key factors.
The pandemic has caused notable disruption to the housing market and 41% of brokers said that chain breaks and mortgage delays were the most important reasons that drove customers to look for bridging finance.
There’s also been a boom in DIY and refurbishments, which just over a third (34%) of brokers cited as the main reason. These were followed by: borrowers buying at auction (28%), borrowers looking to raise capital (19%), and borrowers looking to re-bridge (11%).