Second Quarter Sees Increase In Bridging Lending

According to the Bridging Trends infographic there was a significant increase in the amount lent by way of bridging loans during the second quarter of this year. It was pleasing to see that the figure rose from £118.79 million in quarter one of 2017 to £150.07 million.

For around two years, the main reason why someone arranged a bridging loan was due to the delays in arranging a mortgage. However, in Q2 of 2017 the main reason was due to people having refurbishment work carried out. This accounted for 27% of bridging advances compared to 23% in the first quarter. Mortgage delays made up 25% of such borrowing with this being a fall when compared with Q1 of 2017 when delays in mortgage completions accounted for 31% of bridging advances. Other purposes made up for 15% of advances – down from 17% in the first quarter. Re –bridging made up for 13% of such advances with this being the same as in Q1 of this year. Business purposes accounted for 11% of bridging loans – a 1% drop when compared with the first quarter. Auction purposes made up 9% of bridging advances compared to 4% in the first quarter of 2017.

The average term of a bridging loan dropped slightly to 11 months when compared with the first quarter of 2017 when the average term was 12 months.

The average loan to valuation (LTV) dropped to 45.4% in comparison to the first quarter when the average LTV was 46.2%.

The average time taken to complete on a bridging loan dropped by a huge number of days to 39 whereas in the first quarter it was an average of 50 days.

The average monthly interest rate rose marginally to 0.84% in the second quarter of 2017 in comparison to the average of 0.83% per month in the second quarter of this year.

The lenders contributing in the production of the above information are MTF, SPF Short Term Finance, Brightstar Financial, Enness Private Clients and Positive Lending.

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