Growth in alternative finance outstrips mortgage lending 50 times over

Gross mortgage lending, as measured by the Council of Mortgage Lenders, was outstripped 51 times over by the growth of bridging loans in 2012, reveal figures from the latest West One Bridging Index.

The CML estimated a 1.4% annual growth in gross mortgage lending between 2011 and 2012, putting gross mortgage lending at £143bn in 2012.

However, according to the latest West One Bridging Index, the bridging industry saw annual gross lending of £1.57bn in 2012, with gross lending expanding by £653m in a year, from £912m in 2011.

The size of the average bridging loan increased by 36% in 2012 and the number of loans granted rose by 23%.

On a quarterly basis, gross bridging lending expanded by 10% since Q3 2012, when this stood at £399m. Gross bridging in the final quarter was £439m, 49% more than the equivalent period in 2011.

Duncan Kreeger says, “In the autumn, I predicted bridging would break the £1.5 billion mark by the start of 2013. That looks too conservative now. Bridging will smash the £2 billion mark by the end of the year – at an absolute minimum.

“In the twelve months to September, the bridging industry had lent £1.42 billion. Just three months on, it’s 10% bigger. This is being reflected in the size of loans, too. The average bridging loan size rose by 14% to over £450,000 in Q4.”

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