Drop In Gross Bridging Advances In Q1 Of 2017
The Bridging Trends infographic covering the first quarter of 2017 has recently been published and it makes for interesting reading. The lenders providing the data for the infographic are MTF, Brightstar, Enness Private Clients, Positive Lending and SPF Short Term Finance.
The total amount of gross bridging lending in Q1 of 2017 by the above contributors was £118.79 million. That is a fall of £6.87 million when compared with the last quarter of 2016.
The average loan to valuation (LTV) was 46.2% whereas in the last quarter of 2016 it was higher at 50.6%. This potential increased security margin would give lenders greater peace of mind.
The average term of bridging loans increased to 12 months. In the last quarter of 2016 the term was 11 months. It is interesting that bridging finance is in place for this length of time.
The average monthly interest rate rose to 0.83% when compared with Q4 of last year when it stood at 0.78%. From a borrowers perspective, this increase will have been a disappointment. This was the first rise since the third quarter of 2015.
First charge bridging lending in the first quarter of 2017 was 86.6% whereas in the last quarter of 2016 it was 82.6%. Second charge bridging lending in Q1 of 2017 was 13.4% whereas in Q4 of 2016 it was 17.4%.
The time taken to process a bridging loan was 50 days which is slightly longer than in Q4 of 2016 when it was 48 days.
The major reason why someone took out a bridging loan was due to delays in their mortgage with this accounting for 31% of completions. Next was for property refurbishment at 23%. In third place was “Other” at 17%. Next was re-bridging at 13% with business purposes following close behind at 12% and finally auction purchase at 4%.
For those of you with any interest in bridging finance we trust that you find the above of benefit. If you require a bridging loan then feel free to get in touch to discuss the matter further.