Record high for bridging finance
According to the latest West One Bridging Index total gross bridging lending reached £1.79 billion in the year to August 2013.
July and August marked a record high for bridging loans with £194 million in gross advances representing an estimated 36% of total lending.
Over the last year buy-to-let landlords have used £640 million in short-term secured loans.
Duncan Kreeger, director at West One Loans said: “Landlords don’t just need mortgages.
"To expand portfolios, landlords are increasingly converting properties from other uses or from a dilapidated state.
“That’s vital for a growing rental market and it’s a huge economic opportunity. But this type of lending is not supported by most mortgage lenders. There’s a serious gap in the financial system.
“The trouble is that standard mortgages were never really set up for that sort of loan, and the financial crisis has made lending criteria even stricter. For example, it’s practically impossible to get a high street mortgage on an ex-office — or a flat with no bathroom.”
The size of the average bridging loan was £450,199 in July and August, up from £408,214 in the previous two months.