Increase In Bridging Lending In 2018
According to the Bridging Trends report recently produced, those contributing to the report lent £766.9 million by way of bridging finance in 2018. This was an increase of £232.8 million when compared with the previous year.
Those contributors are mtf, Brightstar, Enness, Positive Lending, Clever Lending, Complete FS, Y3S Bridging & Commercial and Pure Commercial Finance.
The average loan to valuation in the 4th quarter of 2018 was 57% with this being an increase on the previous quarter when it was 55.4%. This is a statistic that will no doubt please lenders as it provides them with an increased security margin.
The average term for a bridging loan increased to 12 months up from 11 months in the other 3 quarters in 2018. We have said it before, but this does seem rather a long period of time to have a bridging loan in place.
The average monthly interest rate in the 4th quarter of 2018 was 0.8% whereas in the 3rd quarter it was 0.78%, in the 2nd and 1st quarters it was 0.83%. So, as you can see, the rate fell in the last 6 months of 2018 with this no doubt pleasing borrowers.
The average period to complete on a bridging loan rose from 43 days in 2017 to 45 days in 2018. This statistic may have been disappointing to some borrowers if some had been looking for a very quick completion.
In the 4th quarter of 2018, the main reason for someone taking out a bridging loan was property refurbishment at 25%, business purposes and mortgage delays at 18%, re-bridging at 17%, other at 16% and auction purchase at 6%. There may be some people who would have thought that a lot of people applied for bridging finance as he or she was looking to purchase a property at auction but, as can be seen, this is not the case.
There are so many providers of bridging finance including the likes of the major high street banks as well as specialist lenders so it may be to your advantage to shop around to try to get a competitive deal. This could take up quite a bit of your time that may be better used in running your business. Instead, why not get in touch with us here at Commercial Mortgage Link and we will look to introduce you to a broker that has many years experience in placing bridging finance with a suitable lender.