The past 12 months have been another period of unpredictability in the market as we navigate our way through further waves of the pandemic.
Despite this, the bridging market has experienced a very successful 2021 and here at West One, as well as in the wider market, there is continued demand for short-term finance; so I expect 2022 will also be strong.
The popularity of the sector and this increase in demand has brought new bridging lenders to the market and there are likely to be more new players in 2022.
By example, West One's bridging division has had its best year to date with gross completions up to 32% to £485m in H1 2021. In November gross completions were up 52% so we're set for a record year as we enter our 15th year of trading.
With the housing market as in demand as ever, there is an appetite for property development and refurbishment, particularly conversion from commercial and semi-commercial to residential. I think this will continue during the year with an increase in demand for large bridging loans over £1m.
We are also seeing an increase in multi-product cases where a client requires a number of different types of loan across one project. For example, a development loan to purchase land and build flats, then refinancing onto a bridging loan to sell some of the units to repay the development loan. If the remaining units are to be let out, the loan can move onto a buy-to-let mortgage.
The labour and materials shortages experienced in 2021 are still having an impact but things are slowly improving. We have supported some of our clients by restricting their loans due to delays and rises in the build cost and this will probably continue in 2022 but to a much lesser extent - unless Covis brings more lockdowns.
House prices will soften during 2022 and the continued demand for housing should see new build and refurbished property selling well or being let quickly as rental demand continues to rise.
The ability to travel abroad has been made so difficult, even impossible at times, that people are holidaying in the UK instead. So, another growth area which is set to continue into 2022 is the use of bridging loans to convert or extend holiday lets into larger premises.
We will be further growing our team in 2022 in anticipation of a busy year, not just in terms of business but product development too. Hopefully, we can continue face-to-face meetings with brokers without the interference of Covid and increase our distribution channels to reach a larger audience.
From everyone in West One, good luck in 2022 and we hope to catch up with broker friends old and new.
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