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Bridging Loans - UK - August 2015

Published By :

Mintel

Published Date : Aug 2015

Category :

Banking

No. of Pages : N/A

Although the bridging loans industry has traditionally been largely unregulated, stricter regulation in the wider lending market has led to many bridging lenders becoming wary of their operations, though they are still taking full advantage of opportunities presented.

Executive Summary

Market size
Figure 1: UK bridging loans market value, in aggregated loan balances, 2011-2015, (£ billion)
Figure 2: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2011-2015, (£ billion)
Market trends
Market factors
Regulation changes yet to affect large proportion of market
Continued struggles by mainstream lenders to provide finance to SMEs and legislative changes have peaked bridging lenders’ interest
Property market continues offer greatest opportunity for industry growth
Industry structure
Forecast
Aggregated loan balances are forecast to increase by 82% to 2020, albeit at a diminishing annual growth rate
Figure 3: Forecast UK bridging loans market value, in aggregated loan balances, 2016-2020, (£ billion)
A stable business environment and a gradual slowdown in the property market will support commercial and development loans
Figure 4: Forecast UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2016-2020, (£ billion)
What we think

Key Insights

Which factors have led to the industry emerging as a serious competitor to mainstream lenders?
How have changes in lending regulation affected the bridging industry?
Are P2P lenders a credible threat to industry development?
What will be the key market drivers?

Introduction

Definitions
Methodology
Abbreviations
Market positioning

UK Economy

Key points
Overview
Figure 5: UK GDP, 2004-2015 Q1, (% quarterly growth and GDP in £ billion)
Figure 6: Quarters after GDP peak, 1979, 1990 and 2008, (Number of quarters and GDP as % of pre-downturn peak)
Inflation
Interest rates
House prices
Consumer spending
Manufacturing
Business investment
Figure 7: UK GFCF 2003-15, (£ million)
Imports
Exports

Market Factors

Key points
Output growth slows at the start of 2015
Figure 8: GDP growth rate, 2012-15, (% change on previous quarter)
Figure 9: GDP growth rate, 2012-2015, (% change on previous quarter)
Property market continues to offer greatest opportunity for industry growth
Figure 10: Number of residential property transactions, 2010-14, (seasonally adjusted)
Figure 11: Number of residential property transactions, 2010-2014, (Number, seasonally adjusted)
Figure 12: Number of non-residential property transactions, 2010-14, (Number, seasonally adjusted)
Figure 13: Number of non-residential property transactions, 2010-2014, (Number, seasonally adjusted)
Misconceptions about bridging finance continue to restrict development
Continued struggles by mainstream lenders to provide finance to SMEs and legislative changes have peaked bridging lenders’ interest
Figure 14: Company insolvencies in England and Wales, 2010-14, (Number)
Figure 15: Company insolvencies in England and Wales, 2010-2014, (Number)
Associations have helped promote the industry’s position in the alternative finance market
Regulation
The EU Mortgage Credit Directive
Buy-to-let mortgages

Market Size

Key points
Figure 16: UK bridging loans market value, in aggregated loan balances, 2011-2015, (£ billion and % annual change)
Figure 17: UK bridging loans market value, in aggregated loan balances, 2011-2015, (£ billion)
Market segmentation
Figure 18: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2011-2015, (£ billion)
Figure 19: UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2011-2015, (£ billion)
Figure 20: UK bridging loans market value segmentation, in aggregated loan balances and by loan purpose, 2015, (£ billion, % of bridging loans)
Figure 21: UK bridging loans market value segmentation, by loan purpose, 2015, (% of bridging loans)
Figure 22: AOBP market report, by lender and loan business volume, November-December 2012, (% of total cases, % of total completions and £000)
Figure 23: AOBP market report, by lender and loan business volume, November-December 2012, (£000)

Market Trends

Key points
Regulation
Threat of other emerging alternative lenders
Technology advances
Property boom drives growth
Figure 24: Halifax and Nationwide House Price Index, by annual change per quarter, Q1 2007-Q2 2015, (%)
Figure 25: Halifax and Nationwide House Price Indices, by annual change per quarter, Q1 2007-Q2 2015, (%)
Other trends
Figure 26: AOBP bridging market trend report, by sector, average loan-to-value, June 2013-June 2015, (%)
Figure 27: AOBP bridging market trend report, average loan-to-value, June 2013-June 2015, (%)
Figure 28: AOBP bridging market trend report, average interest rate, June 2013-June 2015, (%)
Figure 29: AOBP bridging market trend report, average interest rate, June 2013-June 2015, (%)
Figure 30: ASTL gross mortgage lending estimates, 2012-2015, (£ million and %)
Figure 31: ASTL gross mortgage lending estimates, 2012-2015, (£ million and %)

Industry Structure

Key points
Industry development

Company Profiles

Alternative Bridging Corporation

Figure 32: Financial analysis of alternative bridging corporation limited, 2010-2014, (£ 000)
Company outlook

Amicus Finance (formerly Capital Bridging Finance)

Figure 33: Financial analysis of Amicus (formerly Capital Bridging Finance), 2010-2014, (£ 000)
Company outlook

Boost Capital (formerly Business Financial Services (UK))

Figure 34: Financial analysis of Boost Capital (formerly Business Financial Services (UK)), 2012-2013, (£ 000)
Company outlook

Commercial Acceptances

Figure 35: Financial analysis of Commercial Acceptances, 2010-2014, (£ 000)
Company outlook

Dragonfly Property Finance

Figure 36: Financial analysis of Bridgeco Ltd, 2009-2013, (£ 000)
Figure 37: Financial analysis of Fern Trading Ltd, 2011-2014, (£ 000)
Figure 38: Financial Analysis of Rednel, 2013-2014, (£ 000)
Company outlook

Goldentree Financial Services

Figure 39: Financial analysis of Goldentree Financial Services, 2010-2014, (£ 000)
Company outlook

Hope Capital

Company outlook

Lancashire Mortgage Corporation

Figure 40: Financial analysis of Lancashire Mortgage Corporation , 2010-2014, (£ 000)
Company outlook

MTF Finance

Company outlook

United Trust Bank

Figure 41: Financial analysis of United Trust Bank, 2010-2014, (£ 000)
Company outlook

West One Loans

Figure 42: Financial analysis of West One Loans, 2009-2013, (£ 000)
Company outlook
Figure 43: Profiled companies’ combined turnover, 2010-2014, (£ million)

Forecast

Key points
Figure 44: Forecast UK bridging loans market value, in aggregated loan balances, 2016-2020, (£ billion and % annual change)
Figure 45: Forecast UK bridging loans market value, in aggregated loan balances, 2016-2020, (£ billion)
Figure 46: Forecast UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2016-2020, (£ billion)
Figure 47: Forecast UK bridging loans market value segmentation, in aggregated loan balances, by sector, 2016-2020, (£ billion)
Mixed prospects in property market for lenders
Favourable conditions for rival alternative lenders threaten potential industry development

Further Sources and Contacts

Trade associations
Trade magazines
Trade exhibitions

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