Bridging lending reaches £150m in Q2

Activity within the bridging loan sector peaked at £150.1m during Q2 2017, a 26% increase on the Q1 gross lending figure and the highest level since Bridging Trends launched.

The second quarter of 2017 saw activity skyrocket as bridging lenders brushed aside Brexit and general election concerns.

Refurbishments proved to be the most popular reason for people deciding to take out a bridging loan during Q2 (27% of all lending), followed by mortgages delays (25%). 

Unregulated bridging loans accounted for 53.9% of lending in Q2 2017, compared with 49.3% in Q1 2017 when regulated loans exceeded unregulated loans.

Aside from Q1 2017, unregulated loans have dominated since Bridging Trends started. 

The average completion time of a bridging loan application decreased by 11 days in Q2 to 39 days, compared with 50 days in Q1, while the average term of a bridging loan was 11 months during Q2, down from 12 months in the previous quarter.

The key data points from Bridging Trends in Q2 2017 were:

contributor lending reached a record high at £150.1m
LTV levels hit a new low of 45.4%
average completion time was quicker
unregulated bridging loans returned to outperform regulated transactions
refurbishment was the most popular reason for accessing a bridging loan.

Joshua Elash, director of bridging finance lender MTF, said: “Demand for specialist finance remains strong. 

“Most interesting, however, [is that] for the first time since reporting began, mortgage delays are not the most popular use of a bridging finance loan, having been replaced by refurbishment.” 

Bridging Trends – a quarterly publication by bridging lender MTF and specialist finance brokers Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance – was first published in 2015 to monitor volume and general trends in the bridging finance market.

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