Bridging Lending Strong In Q3

It is pleasing to read that, according to the Bridging Trends data produced by a number of specialist lenders, there has been a significant increase in the amount of money lent in respect of bridging loans in the third quarter of 2015. It will be interesting to see what impact the lead up to Christmas has on this sector of the lending market.

the amount advanced for bridging loans rose in Q3 of 2015 when compared with Q2.
There has been an increase in the amount drawn down for bridging loans in Q3 2015 when compared with the previous quarter.

Let us have a look at some of the highlights of the above publication.

Bridging loan drawdowns from those taking part in the Bridging Trends publication rose to £131.72 million in Q3. That was an increase of over £32 million in comparison to the second quarter of 2015 when £99.1 million was lent.

It is interesting that the main reason why people sought bridging finance was due to them encountering delays in arranging a mortgage. These sort of requests accounted for 37% of bridging loan business drawn down in Q3 that was up on the figure of 33% seen in Q2. The second most popular reason for someone wanting a bridging loan was for property refurbishment – 21%. In third place was a requirement for business purposes – 18%. Auction purchases accounted for 7%.

The average period that someone has a bridging loan in place for fell from 11 months in Q2 to 10 months in Q3. However, this does seem rather a long time to have a bridging loan in situ.

The average period taken to complete on a bridging loan rose significantly from 39 days in Q2 to 46 days in Q3. It will not come as a surprise to read that a factor in this will have been due to people taking holidays.

The average LTV rose from 45.9% in Q2 to 50.9% in Q3.

The average monthly rate of interest increased from 0.91% in Q2 to 0.92% in Q3.

We will publish highlights of the final quarterly Bridging Trends figures for 2015 for bridging finance when they become available in the spring of 2015.

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