Alan Cleary, managing director of Precise Mortgages, said a normal buy-to-let market was around the £20bn gross mark annually, a volume he believes the market will reach by 2015, and bridging lenders had the capacity to lend this money to investors.
He said: “We think the buy-to-let market is around £12bn now. The size of the market was £44bn when the credit crunch occurred, so that figure is a bubble. Halfway towards that seems like a sustainable number.
“That strip of growth could fuel quite significant growth in the bridging market over the next few years. There are of course other areas that could come alongside to help the bridging market grow, but we certainly see this as a growth story for this market for the next five years.”
Cleary said underlying factors including government cuts to social housing and the continued lack of wholesale funding for mortgage lending would mean the private rented sector would grow in the coming years, creating demand for buy-to-let loans.
“The buy-to-let market and private rented sector looks like it’s going to gain some strength over the next cycle,” he said. “Consumer demand for rented property is already apparent and I think bridging lenders are in the market offering products that cater to landlords’ demand. This is the most obvious part of the mortgage market that will help bridging and short-term lenders grow.”
Though there are no official figures available, industry consensus suggests the bridging market - including short-term buy-to-let, commercial and residential bridging and short-term loans - is around £750m gross annually.
