Third Quarter Sees Rise In Amount Lent By Way Of Bridging Finance
On a quarterly basis, the Bridging Trends report is produced by a number of providers of bridging finance here in the UK. Those providers are mtf, Brightstar Financial, Enness Private Clients, Positive Lending and SPF (Short Term Finance). Below we highlight some of the figures contained in the report produced covering the third quarter of 2016.
It is interesting to see that there was an increase in the amount lent by way of bridging loan by the above providers when compared with the second quarter of this year. In Q3, £140.49 million was advanced with this being an increase of £49.38 million in comparison to Q2 of 2016. It would appear that the BREXIT vote did not dampen peoples’ enthusiasm for this type of borrowing.
It was pleasing to see that the average monthly interest rate fell to 0.85% from the 0.88% seen in the second quarter of this year. Apparently, that is the lowest rate since the Bridging Trends report started to be produced. Obviously, borrowers will welcome being able to obtain such finance for as low an interest rate as possible.
There was also a slight drop in the average loan to valuation (LTV) that in Q3 of this year was 46.9%. In the second quarter of this year it was 47.4%. This reduction would no doubt have been welcomed by lenders as it reduced their risk exposure.
It was perhaps a little disappointing to see that the average time to complete on a bridging loan rose from 46 days in Q2 of 2016 to 49 days in Q3 of this year.
The main reason why someone borrowed money on a bridging loan was due to delays in mortgages being processed. 30% of borrowers were in this situation. The second most popular reason why bridging finance was arranged was for property refurbishments. 20% of people borrowed on a bridging loan for business purposes. 9% or bridging loans were for buying a property at auction, 9% for re-bridging and 9% for some other purpose.
The average period that someone had a bridging loan in place was for 11 months that was the same length of time in the second quarter of 2016.
We trust that you have found the above information about bridging lending in the third quarter of 2016 in the UK to be of interest.