Property market and bridging industry enjoy booming start to 2021

Just like that, we are at the halfway point of the year. And what a six-months it has been for both the property market and the bridging loans industry. There are number of interesting trends to reflect on from 2021 so far:

  • The rise in property prices due to increased demand
  • The desire for larger properties with a garden or being close to a green space
  • Increases in the use of short-term finance due to mortgage delays
  • The rising popularity of buy-to-let properties

House prices have risen sharply, as has demand for residential investments. But, with the stamp duty holiday only in play for a limited time, there has been a rush to complete property transactions, with many buyers turning to fast bridging loans. We’ll explore these trends in greater detail and assess what the second half of 2021 could have in store.

Read more about the recent boom of buy-to-let sales and the changes you need to know.

booming property market and bridging industry

House prices rise sharply

The standout development over the past 12 months, and particularly the first six months of 2021, has been the pace of house price growth. According to Halifax, average UK house prices rose by 9.5% in the year to May 2021. This represents the biggest annual increase recorded since June 2014.

Source: Halifax House Price Index


House prices have risen sharply in the face of unprecedented levels of buyer demand. This demand is the result of three notable developments.

  1. The stamp duty holiday

    This offered buyers tax savings of up to £15,000 if they completed purchases before 30 June 2021.

  2. Pent-up demand that formed during the early stage of the pandemic

    Indeed, the first national lockdown made it nearly impossible to buy or move property, with the market grinding to a halt for several months. Since reopening, there has been a spike in the number of buyers and sellers once again looking to transact.

  3. Record low interest rates set down by the Bank of England

    The base rate is currently 0.1%; the lowest ever recorded.

Combined, these trends have resulted in homebuyers and property investors flocking to the market. According to government data, there were 114,940 UK residential transactions in May 2021, which is 138.2% higher than a year earlier.

Source: HMRC

house prices rise sharply

Mortgage woes and bridging demand

However, not all news coming from the property market has been positive. In the face of such high demand, as well as ongoing economic uncertainty, many mortgage lenders have either taken longer to approve applications or have removed products from the market. These delays and tighter lending criteria have led to a greater number of people, particularly investors, considering bridging finance to buy property.
We’ve seen record levels of enquiries in 2021 so far. Indeed, in the opening four months of the year, we undertook a recruitment drive, expanding our team by 40%, allowing us to meet the increase in demand for bridging loans.

Why would property buyers consider a bridging loan?

The most important reason is often the speed of delivery that bridging finance provides. Whereas mortgage providers can take several months to assess an application, bridging lenders can issue a short-term loan in a matter of days.

Q3 Outlook

Fast finance has been key in 2021. It enables buyers to navigate complications with property chains and push ahead with potential transactions in advance of the stamp duty holiday deadline. Even when the stamp duty holiday begins to taper down from 1 July, we still expect the property market to remain a hive of activity. Demand for bricks and mortar is very high in the current climate, with its ability to deliver long-term capital growth demonstrated clearly during the pandemic.

Importantly, favourable stamp duty rates remain in place from July through to the end of September. Property buyers will therefore be keen to find and complete on deals during the summer months, and we’re here to support through bespoke, fast bridging loans.

If you’re in need of a bespoke bridging loan, contact us today by clicking here.

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