Despite its value to the economy the bridging industry is currently unregulated by the Financial Conduct Authority (FCA) and as a result the government does not produce any official statistics on the industry – unlike all other sectors of UK financial services.
To mitigate this West One Loans regularly examines industry activity in its quarterly West One Bridging Index.
The Index analyses net lending figures, average loan size, interest rate fluctuation and market predictions to plot trends across the industry as a whole.
First established in 2011 the Index uses West One Loans management data as well as statistics published by the Association of Bridging Professionals and other leading UK bridging loan lenders.
This data is mapped against public sources of mainstream business lending data from sources including the Bank of England, British Bankers Association and the Council of Mortgage Lenders to explore how rapidly the bridging industry is expanding to fill gaps left by traditional high-street lenders as they have retreated from the mortgage market since the credit crunch began.
Duncan Kreeger, director at West One Loans, said: “The Bridging Index paints an illuminating picture of how the bridging industry is booming in contrast to the deterioration of business lending by mainstream banks.
“Mortgage lending has suffered a 60% drop since the pre-crisis peak and even the most optimistic predictions don’t expect mainstream banks to take up that slack for perhaps a decade, if ever.
“Against this black hole the bridging industry is shining light into business lending and bringing to life many projects which would otherwise struggle to get off the ground.”
A separate West One Loans research survey revealed that many borrowers are still insure as to how bridging finance can help them to attain short-term funding.
Four out of five mortgage brokers believe that borrowers are missing out on opportunities because they do not understand the process involved in alternative finance.
Mark Abrahams, director at West One Loans, said: “Traditional finance is undergoing a process of disintermediation.
“We are cutting out the mainstream bank ‘middle man’ and putting lenders directly in touch with borrowers.
“This could be terminal for certain old ways of doing things, but also gives the opportunity to build a more solid foundation for the future of finance.”
The West One Loans Bridging Index has also been recognised by Wikipedia as a key measurement tool of the UK Bridging industry.
Kreeger added: “Wikipedia has become the world’s largest and most popular general reference source, ranking sixth globally among all websites and with an estimated 365 million readers worldwide. We are thrilled that the West One Bridging Index is being brought to the attention of such a large audience, particularly as Wikipedia entries are now subject to such stringent quality checks by moderators.”
