H2B overshadowed by alternative finance

Sam Cordon

November 29, 2013

Lending through the Help to Buy equity loan scheme has so far provided £208m in gross lending compared to £878m in gross lending supplied by short-term secured loans over the same five month period.

Duncan Kreeger, director at West One Loans, said: “So far the first phase of Help to Buy has only helped a few thousand cases of first-time buyers struggling to get onto the property ladder.

“The real elephant in the room is the sheer lack of homes available on the market.

“It’s becoming increasingly obvious that heating up the pressure cooker of consumer demand will do little to ease the worsening bottleneck of supply.”

And the overall growth in short-term secured lending has continued on an upward trajectory.

In the twelve months to 1 November industry gross bridging lending totalled £1.93bn up 5.5% since standing at £1.83bn two months ago.

On an annual basis lending has grown 29% compared to the previous 12 months to November 2012 when gross bridging lending was £1.49bn.

Kreeger said: “This industry provides vital support for some of the most central pillars of economic recovery.

“By doing things differently we can expand the supply of homes to let and to buy. We can provide the liquidity for large firms to get million-pound deals done.

“And critically we can support SMEs too – forgotten and left out in the cold by so many high street lenders.”

And he added: “Most importantly bridging finance is about collaboration. Short-term secured finance can get things moving.

“Often mainstream finance will step in once the ball’s rolling – but more often than not bridging lenders are the ones taking the difficult free kick.”

Sign up to our daily email