"2017 has proven to be a strong year for bridging finance, with a clear return to form after the post-Referendum turbulence this time last year."
Gross annual bridging lending reached a new high of £4.7bn in September, eclipsing the pre-Brexit high of £4.4bn, according to research from West One Loans.
Gross annualized lending increased from £4.3bn in June and was 10% above the same period in 2016.
Within this recovery, there do appear to be some changes to market dynamics however, with a higher volume of smaller-sized transactions characterizing recent months.
Average loan sizes dipped under £600,000 vs averages in excess of £900,000 at the same time last year, flattening-out the longer-run trend in the last two years that had previously seen significant growth.
There have been fewer large transactions coming to market, reflecting the relatively depressed market for high-end properties with values over £1m, especially in London.
Marie Grundy, Sales Director of West One, said: “2017 has proven to be a strong year for bridging finance, with a clear return to form after the post-Referendum turbulence this time last year. Seeing further robust new business performance in a quarter that includes the typically-quieter summer holiday period is very encouraging.
"The wider property and property finance markets have flattened against continued political uncertainty due to slow progress negotiating Brexit, and the prospect of interest base rate rises finally arriving. This new market high therefore reflects the underlying strength of bridging.
At West One, we’ve seen robust growth in our bridging this year, to reach around £450m of total lending and experiencing monthly lending records exceeding £60m. As we discussed in Q2, a major driver for that continued growth is demand from property professionals for smaller projects that are better suited to bridging funding than to full-blown development finance.
"We believe there is still that slack in the market and expect that the bridging market will continue to this pattern of solid growth, despite some slowing in the housing market. With pockets of growth outside London and the South East, we anticipate seeing more of that growth regionally.”