Bridging Lending Trends In Q4 2015

A number of specialist providers of bridging finance put together the Bridging Trends document on a quarterly basis. Those contributors are mtf, Brightstar, Enness Private Clients, Positive Lending and SPF Short Term Finance. Below we provide some of the highlights of it that we trust you find of interest.

A delay in selling a property may lead to a request for a bridging loan
You may require a bridging loan if there is a delay in the sale of a property going through.

There was £121.21 million lent by those contributors mentioned above in the 4th quarter of 2015. This was a reduction of £10.51 million when compared with the 3rd quarter of 2015. This was probably not surprising as the property market does tend to slow down in the period leading up to Christmas.

It was pleasing to see a small reduction in the average monthly interest rate to 0.87% with this being a reduction of 0.05% when compared with quarter 3’s figure of 0.92%. Nevertheless, any reduction in interest rates has got to be positive from the customer’s point of view.

The average term for somebody having a bridging loan in place remained the same as in quarter 3 at 10 months. For obvious reasons, a customer would prefer to be taking on such finance over as short a period as possible.

The average loan to valuation (LTV) saw a small drop to 49.9% in comparison to quarter 3’s figure of 50.9%. This could be due to an overall average increase in property prices.

The average period taken to complete on a bridging loan fell to 41 days when compared to quarter 3 in 2015 when it averaged 46 days.

When looking at the reasons people take out bridging finance, 44% of people did so due to delays in their mortgage application being processed in the final quarter of last year. This was the same main reason why people arranged bridging loans in quarter 3 of 2015 when 37% stated this was why. The next most popular reason was for refurbishment with 27% doing so. 11% of people took out a bridging loan to re-bridge. 7% did so for business purposes. 6% did so for purchasing at auction and 5% did so for other reasons.

We will continue to keep you updated about bridging finance statistics as and when another quarterly document is produced by Bridging Trends.

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