bridging trends

Second-charge bridging loans hit highest market volume

Second charge loans experienced the highest market volume last year, according to the latest research.

The 2019 Bridging Trends reported that the split between first and second legal charge bridging loans remained consistent in the first three quarters of 2019.

However, in Q4 2019, second charge loans rose to their highest level of 23% (Q3 2019: 18.4%).

Second charge bridging loans accounted for an average of 20% of total market volume in 2019, up from 17% in both 2018 and 2017.

The latest Bridging Trends data also revealed a drop in average monthly interest rates for the third consecutive year in 2019 to 0.76%, lower than in 2018 (0.81%), 2017 (0.83%) and 2016 (0.85%).

Average LTV levels also decreased to an average of 53% from 55% in 2018.

Chris Whitney, head of specialist lending at Enness, said: “I think these figures show how robust the short-term finance market now is.

“I believe we have already seen a shift in valuer sentiment post-election, and I think 2020 will be a big year for this industry.”

Kit Thompson, director of short-term lending and development finance at Brightstar, commented: “Bridging demand remains high and with plenty of competition out there among lenders all flush with liquidity, there is pressure on rates to remain low — all good news for borrowers.”

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