Gross Bridging Lending In 2016 Exceeds Previous Year
The Bridging Trends report has been produced for the 4th quarter of 2016 with the contributors being lenders MTF, Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance. This reveals some interesting statistics about the bridging loans provided by the above contributors.
For instance, in 2016, the above contributors had total gross lending of £482.61 million with this being an increase of £50.1 million when compared to 2015. In Q1 of 2016 some £125.35 million was advanced, in Q2 the figure was £91.11 million, in Q3 some £140.49 million was advanced and in Q4 the sum of £125.66 million was advanced by way of bridging loan. It is good to see that the amount lent for this type of short-term finance rose.
Borrowers will be pleased to hear that last year the average monthly interest rate reduced each quarter for bridging finance thus saving some borrowers money. For instance, in quarter 1 of 2016 the rate was 0.89% pm, in quarter 2 of 2016 the interest rate had fallen to 0.88% pm, in quarter 3 the rate dropped further to 0.85% pm and in quarter 4 the interest rate fell again to 0.78% pm.
The length of time that people take out a bridging loan for varies on average between 10 and 11 months. In the first quarter of last year it was 10 months and for the next three quarters in 2016 it was 11 months.
In the last quarter of 2016, the most popular reason that someone took out a bridging loan for was due to mortgage delays (35%), in second place was for refurbishment (22%), in third place was for business purposes (17%), in fourth place was to re-bridge (15%), in fifth place was for purchasing at auction (6%) and in sixth place was for some other purpose (5%).
The average time taken to complete on a bridging loan in the 4th quarter was 48 days whereas in the 1st quarter it was only 37 days, in the 2nd quarter it was 46 days and in the 3rd quarter it was 49 days.
The average loan to valuation (LTV) in Q1 was 52.8%, in Q2 it was 47.4%, in Q3 it was 46.9% and in Q4 of 2016 it was 50.6%.
If you have an interest in bridging finance then we trust that you found the above informative. The full report can be found on the bridgingtrends.com website so why not visit their website and take a look at it.