Bridging returns lure investors

Ryan Bembridge

January 5, 2016

Bridging loans have provided investors higher annual returns than other alternative investments such as fine wine and art, research from West One Loans claims.

In the 12 months to September 2015, private investors in short-term secured loans have seen a total annual return of 10.5%.

This is over three times more than the 3.1% return from collectible art, and compares with negative returns for both gold and the FTSE All Share.

Wine investments are worth just 2.3% more than a year ago and are only just recovering from a two year slump, while investors in gold have suffered losses of 4.7% over the year to 1 September 2015.

Those who invested £500,000 in bridging loans on 1 September 2014 would now see their investment worth almost £553,000, while the same investment in fine art would have received significantly less value – about £515,000.

Meanwhile a £500,000 investment in fine wine would be worth just £511,000 as of 1 September 2015.  If invested in gold, investors would have made a loss; £500,000 invested in 1 September 2014 would be worth just £490,000 as of 1st September 2015.

Duncan Kreeger, director at West One Loans, said: “The growing popularity of alternative investments is not without reason.

“Savers have lost patience with the rates on offer from banks and see greater potential returns from alternative investments.

“Investors are waking up to the full potential of alternative investments and bridging loans in particular, which consistently offer investors greater returns and stability than the likes of gold, wine and art.

“We expect this trend to endure as we continue to work closely with intermediaries to make sure that they are aware of the potential of the bridging market.”

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