Just over 18 per cent of people taking out bridging loans are now owner-occupiers, a record high according to West One Loans.
“The problem is that the mainstream mortgage market isn’t doing its job properly," said Duncan Kreeger, chairman of West One Loans. "Five years into the credit crunch, residential lending is still a fraction of what it was during the boom as banks desperately shore up their capital reserves.
"Households can’t get the credit they need from the high street banks and as a result, more owner-occupiers than ever are turning to bridging. And if banks are forced to redouble their efforts to raise capital, the squeeze on high street lenders will tighten further. While a bridging loan is a very different beast to a long-term mortgage, in the right circumstances it can get things off the ground.”
The rise in the number of owner occupiers turning to bridging lenders for finance is reflected in the number or loans being taken out to refurbish properties. In February 8 per cent of brokers listed purchase and refurbishment as the most popular use for bridging. This has now risen to 15 per cent.
Meanwhile, figures from Ascot Mortgages on their new mortgage applications, show that 80 per cent of all new applications are from 'Single-Let' and small scale landlords, just under double the proportion from last year
“The number of first time landlords and accidental landlords has increased dramatically over the last few months," said Kevin Gibson, of Ascot Mortgages, "with now more than one in three buy to let mortgage applications coming from first time investors.”