In Q1 2018, members of the ASTL lent £386.1 million worth of development loans, of which £242.2 million were categorised as bridging.
Property development bridging loans are a method of obtaining short term finance in order to either secure a property or refurbish with the intention of adding value. These development loans exclude what is generally termed “light refurbishment”, such as the addition or renovation of bathrooms, kitchens and conservatories as these generally do not require planning permission or extensive structural changes.
Q1 2018 revealed a 22% increase in bridging development loans since the previous quarter, highlighting the growing trend for property developers to rely on short term lending solutions.
Benson Hersch, CEO of the ASTL, said: “The role of small and medium building firms are seen as crucial in helping solve the housing crisis but access to finance still remains their toughest barrier to overcome. Whilst SME building firms continue to be locked out of mainstream channels, they will increasingly rely on different sources of finance such as short-term funding solutions.
“These alternative forms of finance are providing a solution and allowing small developers to play their part in housing delivery.”