Bridging Lending Rises In Q2 of 2018

You may be interested to read that the gross amount lent by way of bridging finance increased significantly in the 2nd quarter of 2018 when comparing the figures with the 1st quarter of this year. However, one of the reasons for this may be that the number of packagers providing figures to Bridging Trends has gone up.

Data produced by Bridging Trends is now provided by the following packagers: – mtf, Brightstar, Finance 4 Business, Complete FS, Positive Lending, Enness and and Pure Commercial Finance.

The total gross amount lent in the 2nd quarter of this year was £197.94 million with this being a rise of £43.9 million when compared with the 1st quarter of 2018.

The average monthly interest rate charged by lenders has stayed the same at 0.83% and it is interesting to note that this rate has remained at this level for the last 3 quarters. Following the recent increase in the Base Rate it will be interesting to see what impact, if any, it has on bridging loan rates in the coming months.

Another statistic that has stayed the same is the average term for a bridging loan at 11 months. We have said it before, but this does seem rather a long period of time for a bridging loan to be in place for.

Lenders will be very pleased to read that the average LTV (Loan to Valuation) has gone up from 49.1% in the 1st quarter of 2018 to 56.9% in the 2nd quarter of 2018 thus providing lenders with extra peace of mind.

The average period to complete on a bridging loan dropped by 5 days to 43 days when comparing the above 2 quarters. This will have come as good news to those people requiring a bridging loan.

The main reason why someone took out a bridging loan in the 2nd quarter of this year was for refurbishment with 34% of finance requests being for this purpose. In the 1st quarter of 2018 only 18% sought bridging finance for that purpose. 20% of bridging loans were to cover mortgage delays down from 24%. 17% were for other purposes up from 8%. 12% were for re-bridging purposes down from 14%. 10% were for business purposes down from 16%. 7% were for auction purchases – a big drop from the 1st quarter of 2018 when 20% were for that purpose.

It will be interesting to see what happens in the third quarter of 2018 with regard to the data for bridging finance. We will continue to keep you updated periodically.

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