Rise In Gross Bridging Lending In Q3 2021
According to the Bridging Trends infographic, there was a large increase in gross bridging lending in the third quarter of 2021 when compared with the previous quarter here in the UK.
In the third quarter of 2021, total gross bridging lending amounted to £190.24 million compared to £146.52 million in the second quarter of 2021. Perhaps one of the reasons for this may be due to borrowers being more confident about the pandemic feeling that we are gradually coming out of it.
The average loan to valuation (LTV) in Q3 of 2021 amounted to 60.2% compared to 54.9% in Q2 of 2021. This statistic may concern some lenders as it means that there security margin has deteriorated by quite a lot.
The average term for a bridging loan in Q3 2021 reduced to 11 months when compared with Q2 of 2021 when it was 12 months. This still seems a long period of time for a bridging loan to be in place for.
The average period for a completion to take place in Q3 of 2021 was 53 days whereas in Q2 of 2021 the figure was 47 days. This statistic may concern some borrowers who may have wanted to complete sooner.
The average monthly interest rate was 0.72% in Q3 of 2021 compared to 0.79% in Q2 of 2021. This reduction will no doubt please many borrowers.
The main reason why borrowers took on a bridging loan in Q3 of 2021 was for investment purchase – 28%.
It will be interesting to see what happens in the final quarter of 2021 as far as bridging finance is concerned. Will we see a drop off in lending as we approach the festive period?
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