Minimal Drop In Gross Bridging Lending In Q3 2019
According to the latest Bridging Trends infographic produced covering the third quarter of 2019 there has been a small reduction in the amount of gross bridging lending here in the UK. In Q3 the figure was £181.64 million whereas in the previous quarter it was £184.82 million. This is a drop of £3.18 million.
The following contributed to the figures: –
Contributing Lender – mt finance
Contributing packagers- Brightstar, Enness, ImpactY3S, Positive Lending, Clever Lending, Complety, Capital B and UK Property Finance.
The average monthly interest rate fell from 0.79% in the second quarter of 2019 to 0.74% in the third quarter of 2019. This is a fall of 0.05%. Whilst only a small drop it is one that will please borrowers as it may have resulted in customers paying less interest on their bridging loan. Borrowers will no doubt be hoping that further reductions are seen in the coming months.
The average term of a bridging loan remains at 12 months. We have said it before but this does seem rather a long time for people to be borrowing money in this way.
The average loan to valuation (LTV) in Q3 of 2019 was 53.1% compared to 52.9% in Q2 of 2019. This is a minimal reduction of 0.2%. Obviously lenders would prefer as great a security margin as possible to reduce their exposure to risk but it has to be said that the above percentage must surely provide lenders with reasonable peace of mind.
An interesting figure is the number of days that it takes to complete on a bridging loan. This has risen significantly in the third quarter of 2019 to 51 days compared to 44 days in the second quarter of 2019. This is an increase of 7 days. This is not good from a borrowers perspective as there will be some people seeking bridging finance on an urgent basis.
The most popular reason why someone required a bridging loan in Q3 of 2019 was for the purchase of an investment property with 22% of borrowers needing the funds for this reason. This was down from 25% in Q2 of 2019. The next most popular reason was for a chain break at 20% – up from 18% in the previous quarter. In third place was refurbishment (heavy) at 15% – up from 12% in Q2 of 2019. Next was re-bridging at 10% – down from 11% in the previous quarter. Also at 10% was for unregulated finance with this being up from 7% in Q2 of 2019. Auction purchase came in at 7% – that was the same in the previous quarter. Business purpose was at 6% – down from 12% in Q2 of 2019. Regulated finance was also at 6% – up from 5% in Q2 of 2019. Other purposes were 4% in Q3 of 2019 – up from 3% in Q2 of 2019.
We hope that you have found the above figures of interest. If you are looking for a bridging loan then why not get in touch with us and we will introduce you to a broker who will do all that he or she can to assist.