Annual bridging lending stood just shy of £2.5bn annually to December, meaning £9.7m worth of lending is being conducted every day by homebuyers, developers and businesses.
Duncan Kreeger, director of West One Loans, said: “You only have to go back to the summer of 2011 when the daily figure was less than a third (£3.2m) of what it is today to see how much the bridging market has grown and how much more business lenders and brokers are handling on a day-to-day basis.
“This expansion has been the result of sterling work by key stakeholders to raise the profile of the bridging sector and highlight its usefulness, but has also coincided with high street lenders showing a reluctance to consider short-term or slightly unusual cases which is where bridging loans often ride to the rescue.”
From the end of 2013 gross lending has increased by 24%, while average loan sizes have risen by 18%.
The typical transaction in November and December 2014 was valued at £459,679, 18.2% higher than the same month last year but 12.8% lower than in September and October.
Kreeger added: “Loan volumes witnessed something of a seasonal slowdown in December, but a solid November meant that the two-month comparison was still favourable.
“Cross-referencing this annually – a less volatile indicator – shows this was a blip and that volumes are heading in the right direction, with nothing to suggest any slowdown into 2015.
“Average loan sizes have cooled from the large typical transactions seen last summer, but at more than half a million pounds for 2014 as a whole, bridging loans are still substantial transactions in the main.
“This is put in clearer context when you consider that the average value of a mortgage for house purchase is £165,000 according to the British Bankers’ Association, meaning that the average bridging loan is more than three times larger.”