Last Year Sees Big Improvement In Gross Bridging Lending
According to the most recent Bridging Trends infographic there was a big increase in the total gross bridging lending in 2021 when compared with 2020. This is perhaps not surprising as, for a time last year, we saw an improvement as the pandemic eased somewhat.
In 2021, the total gross bridging lending amounted to £626.69 million as recorded by the financial institutions taking part in the above infographic. In 2020, the figure was £455 million so a significant increase was seen last year.
The average term for a bridging loan in 2021 was 12 months with this being the same as in the previous year. As we have said on a number of occasions in the past, this does seem to be quite a long period of time for bridging finance to be in place as it used to be viewed as very short term finance.
The average loan to valuation was 56.9% in 2021 compared to 51% in 2020. Lenders would of course prefer that the loan to valuation is as low as possible as this provides them with a greater security margin and increased peace of mind should they need to re-possess a property for which they provided bridging finance.
The average period taken for a lender to complete on a bridging loan in 2021 was 52 days whereas in 2020 it was 50 days. Borrowers would obviously prefer for the finance to be arranged as quickly as possible as there is often some urgency to arrange such finance.
The average monthly interest rate for bridging finance in 2021 was 0.76% whereas in 2020 it was an average of 0.79%. This will please borrowers as they would prefer interest rates to be as low as possible thus reducing the amount of interest they pay.
It is going to be interesting to see what happens this year with regard to bridging finance. We will continue to provide you with relevant data in this respect.