Small Fall In Gross Bridging Lending In Q2
According to the recently produced Bridging Trends report there has been a small reduction in the total gross lending amount when comparing Q2 2019 with Q1 2019 here in the UK. The report is produced with data provided by mtf, Brightstar, Impact Specialist Finance, Clever Lending, Positive Lending, Complety, Pure Commercial Finance, Y3S Bridging and Commercial, Enness and UK Property Finance.
In the second quarter of 2019, the total gross lending amount was £184.82 million compared to £185.32 million in the first quarter of 2019. This is a small drop of £500,000.
The average term for a bridging loan has remained at 12 months. As we have previously mentioned, this does seem rather a long period of time for a bridging loan to be in place for.
The average Loan to Valuation (LTV) in the second quarter of 2019 was 52.9% whereas in the first quarter of 2019 it was 51.3%. Obviously, a lender would like the loan to valuation percentage to be as low as possible thus reducing its exposure to risk but with LTVs at these levels a lenders risk is very low.
The average monthly interest rate charged on such lending in the second quarter of 2019 was 0.79%. This is a small increase of 0.05% when compared to Q1 of 2019 when the figure was 0.74%. This will please lenders but disappoint borrowers.
The average period taken to complete on a bridging loan in Q2 of 2019 was 44 days with this being 4 days longer than the average time taken in the first quarter of 2019 when it was 40 days.
The percentage of bridging loans secured by a first charge in Q2 2019 was 81.2% compared to 81.7% in Q1 2019. The percentage of bridging loans secured by a second charge was 18.8% in Q2 of 2019 compared to 18.3% in Q1 2019.
Looking at the purpose people take on a bridging loan for, 25% of people borrowed to buy an investment property, 18% use the funds relating to a chain break, 12% utilise the monies for business purposes, 12% borrow for heavy refurbishment, 11% use the funds for re-bridging, 7% borrow for auction purposes, 7% use the monies for unregulated finance, 5% for regulated finance and 3% take on a bridging loan for other purposes.
We hope that you found the above statistics to be of interest. If you are looking for bridging finance then why not get in touch with us and we will introduce you to a broker who has considerable experience in this field of specialist lending.