Short-term lender West One Loans has predicted that bridging lenders will be making gross loans to the tune of £1 billion by the summer of 2013.

The privately funded bridging lender, which is hiring staff to deal with extra work, says the growth will be driven by the housing shortage, the demand from property investors and buy-to-let investors and the lack of alternative funding on the high street – as well as the booming private rented sector and the professionalization of the industry.

West One Loans says the bridging market was worth about £700 million a year in 2010, and that by the end of the first half of 2011, it was being valued at about £750 millio a year.

Duncan Kreeger, chairman of West One Loans, said: “The amount the industry is lending has grown significantly amount over the last six months. Conservative estimates suggest lenders are writing £750 million worth of business every year at the moment