What Happened To Bridging Finance In 2019?
According to the most recent Bridging Trends infographic, gross bridging lending in 2019 by the contributing lender and contributing packagers totalled £732.7 million with this being a reduction of £34.2 million when compared with 2018. Whilst this news will come as a disappointment to some, in reality, it could be argued that it is only a small reduction.
Those providing the data for the above infographic were MT Finance that was the contributing lender and the contributing packagers were Brightstar, Enness, Clever Lending, Impact Specialist Finance, Complety, CapitalB Property Finance, Positive Lending, Y3S Bridging & Commercial and UK Property Finance.
The average monthly interest rate for bridging finance was: –
Q1 2019 0.74%
Q2 2019 0.79%
Q3 2019 0.74%
Q4 2019 0.75%
Borrowers will no doubt have been pleased to have seen fairly static interest rates for bridging finance throughout 2019.
The average period that someone took out a bridging loan for in 2019 was 12 months that, as we have said on more than one occasion, seems rather a long period of time.
The average loan to valuation (LTV) in 2019 was 52.9% whereas in 2018 it was slightly higher at 54.6%. Obviously, from a lenders point of view, lenders would rather have seen an increase in this percentage to provide them with a greater security margin.
The average period for a bridging loan to complete in 2019 was 47 days compared to 45 days in 2018.
So, what were the main reasons why people needed a bridging loan in 2019? Well, 23% of borrowers required such finance for investment purchase, 18% needed the funds for a chain break, 14% required bridging finance for refurbishment (heavy), 11% needed the monies for a re-bridge, 9% required a bridging loan for unregulated finance and the same percentage required such finance for business purposes, 7% needed the funds for auction purchase, 6% needed a bridging loan for regulated refinance and 5% required such funding for other purposes.
There is no doubt a significant demand for short-term finance such as bridging finance here in the UK with many providers of such lending. If you are looking for such funding then there are a number of ways you can try to source such funds. You could get in touch with your bank, you could use the Internet where you will find there are an awful lot of providers or you could use a broker to help source a bridging loan who should also be able to help you put together a suitable application. In this respect, why not get in touch with ourselves and we will introduce you to such a broker.