Aldermore to stop offering bridging loans

Aldermore Group has decided to stop offering short-term bridging loans from next month as the challenger bank focuses on its residential and commercial mortgage business.

Aldermore said it will stop accepting new bridging loan applications from 1 September, having only launched the short-term lending offer in 2014.

A spokesperson said the bank wanted to "focus on our core mortgage proposition in, residential mortgages, buy-to-Let, commercial mortgages and property development".

Aldermore, which will honour all existing applications made up to and including 31 August, said the changes will apply nationwide.

Last year Aldermore loosened its requirements for bridging loans, reduced the minimum age for those qualifying from 25 to 21, and in April this year described bridging as a “vital segment" of the housing market as it expanded its bridging offer into Scotland due to the renewed confidence in the housing market there.

The bank launched its bridging offer two years ago to allow greater flexibility for customers looking to bridge the gap between purchase and sale or borrowers looking to raise capital, meet tight deadlines for auctions purchases or where other finance has failed to materialise in time.

Analysts at broker Numis said recently that as the UK heads towards recession, it expects loan growth to slow substantially and for impairments at Aldermore to increase from their current exceptionally low levels.

"Recession and rising unemployment are expected to expand the scale of the specialist lending space as more customers will have credit problems and because the clearing banks are expected to tighten their lending criteria," they wrote, cutting their 2017 forecast earnings per share by 15% to 24.5p.