Bridging Finance – What Happened In 2017?
For quite some time, we have been providing periodic updates about certain statistics relating to the bridging loan sector. This information was originally produced on the Bridging Trends website with the lenders contributing being mtf, Brightstar, Short Term Finance, Positive Lending and Enness.
There is now some bridging finance data relating to the whole of 2017 here in the UK in comparison with the previous year some of which we thought we would share with you below.
The total gross amount lent by the above mentioned businesses by way of bridging finance in 2017 was £534.1 million. You may be interested to read that this figure is in excess of £51 million more than the amount lent in this way in 2016.
The interest rate charged by lenders was an average of 0.83% per month that is the same percentage as it was in 2016. This may surprise some people when you consider that we have seen a 0.25% increase in the base rate a few months ago.
The average term in 2017 was the same as over the same period as 2016 with a bridging loan being in place for circa 12 months. We are sure you will agree this is a considerable period of time for what is supposed to be short term finance.
The average loan to valuation (LTV) remained constant when comparing 2016 with 2017 at a figure of circa 45%. This may be a reflection of lenders taking a conservative attitude in relation to security margins when providing bridging finance.
In 2016, the average period taken to complete on a bridging loan amounted to 45 days with this being a couple of days longer when compared with 2017 when the average completion period stood at 43 days.
In Q1 of 2017, it was mortgage delays that were the main reason for someone requiring a bridging loan with 31% of borrowers seeking bridging finance for this purpose. By the end of 2017, it was still mortgage delays that were the main reason why someone required a bridging loan but at a lower percentage of 28%.
We do hope that you find the above bridging finance statistics to be of interest when comparing 2016 with 2017.