Total Gross Bridging Lending Remains Stable In Q2 2021
According to the Bridging Trends infographic that is produced every quarter here in the UK, the gross amount lent by way of bridging finance in the second quarter of 2021 was similar to that of the first quarter of this year. In Q2 of 2021 gross bridging lending totalled £146.52 million whereas in Q1 of 2021 the figure was £144.51 million for those contributing to the above document.
It is interesting to read that the average monthly interest rate in the second quarter of 2021 was 0.79% compared to 0.74% in the first quarter of 2021. Although only a small increase it is one that borrowers would have preferred not to have seen for obvious reasons.
The average period taken to complete on a bridging advance in the second quarter of 2021 was 47 days whereas in the first quarter of 2021 it was 53 days. Borrowers will no doubt have been pleased to see completions going through quicker. Perhaps this was due in part to people wanting to beat the stamp duty deadline date.
The average loan to valuation (LTV) percentage was 54.9% in the second quarter of 2021 whereas the figure was 55.2% in the first quarter of 2021. Lenders will no doubt have been pleased to see this as it means that they had a greater security margin.
The average term of a bridging loan remained the same in both quarters – 12 months.
The major reason why someone took out a bridging loan in the second quarter of 2021 was for investment purchase at 24%. In next place was chain break at 21%. This was followed by refurbishment (heavy) at 15% and then by business purposes at 13%. Next was re-bridge finance at 9% followed by unregulated finance at 6%. Then there was regulated finance at 5% followed by auction purchase at 4%. Lastly there was other finance at 3%.
We will endeavor to continue to keep our readers updated on a quarterly basis with the above statistics relating to bridging finance in the UK.