Over the course of the past year, there has been a noticeable upswing in interest for bridging loans. Research indicates that there has been an increase of approximately 18% in searches for the term ‘bridging loans’ compared to the preceding year. Moreover, according to data from John Charcol, in the month of February, the average monthly search volume for this term reached a staggering 5,200 - a notable peak that represents the highest monthly search volume that has been recorded in five years.

As this trend has continued to gain momentum, it is worth noting that the number of searches for ‘bridging loan calculator’ has also risen. This is a clear indication of the growing interest in this form of high-interest emergency loan. Indeed, it seems that more and more people are considering this option as a viable alternative to traditional loan options.

Nicholas Mendes, who serves as technical manager at John Charcol, notes that the demand for specialist loan products has increased significantly in recent years. This is due in part to the pandemic, but it also reflects a broader trend in which clients have become more familiar with different types of lenders and forms of borrowing than they were in the past. As a result, it seems likely that this trend will continue in the coming years.

Mendes goes on to suggest that the growth in the bridging loan market is likely to persist as homeowners find themselves in the challenging position of being locked into long-term, low fixed rates while simultaneously facing tighter lender affordability requirements. This combination of factors has made it increasingly difficult for some homeowners to access traditional forms of lending. Bridging loans, on the other hand, offer a flexible and appealing alternative.

At John Charcol, we have seen a notable uptick in the number of regulated bridging loans that we are processing. Homeowners are seeking out this option in order to avoid costly chain breaks or downsize while their property is on the market. As the market continues to evolve and shift, we believe that bridging loans will become an increasingly valuable option for sellers.

Currently, many buyers are looking to place bids below the selling price in anticipation of a property price dip of 8-10%. This shift from a sellers’ market to a buyers’ market only underscores the value of bridging loans for sellers. These loans offer homeowners the opportunity to release equity from their property in order to secure an onward purchase while they try to sell their house.