2016 has been a busy year of notable industry highlights for the bridging market. Amid political elections and defining economic announcements, the UK bridging market has continued to perform strongly by offering the market a rapid form of funding that overcomes the liquidity shortfalls of traditional lending institutions.
In Q3 of this year, the UK’s bridging loan volume peaked at an impressive £140.49 million – a 54% increase on Q2’s figure of £91.11 million. Not only does this increase in loan volume demonstrate the growing popularity of bridging as an alternative to traditional bank lending; it also revealed that despite the Brexit announcement investors and developers are still eager to take advantage of the investment and property opportunities on offer across the nation.
The Brexit announcement, coupled with the Bank of England’s decision to set interest rates to a record low of 0.25%, has opened Britain to a range of new exciting opportunities in established and emerging sectors and industries. The bridging market is no exception.
MFS research recently revealed that the ability to acquire credit from traditional institutions has become incredibly difficult for all segments of society, ranging from high-net-worth individuals (HNWIs) to prospective property buyers. For instance, our research found that 17% of HNWIs have been denied a credit card, bank loan, commercial loan or overdraft in the past five years alone.
MFS CEO Paresh Raja was recently quoted in the Financial Times discussing how British consumers and investors are being let down by the banks’ stringent lending system: “The current processes adopted by the UK high street’s big-name lenders are clearly restricted in their effectiveness due to excessive red tape that is putting property purchases at risk, and inhibiting borrowers from fulfilling their intentions, both in business and in their personal lives.”
To ensure Britons are able to take advantage of new opportunities in 2017, it is important that they have access to fast and efficient credit.
Next week, MFS will be releasing a new report rounding up the momentous events of 2016, and offering some insight into the future direction of MFS and the bridging market in general. In the meantime, be sure to visit MFS’s ‘Investor’ page for our latest reports and infographics.