The latest broker sentiment survey from mtf revealed that 27% of respondents said that refurbishment was the most popular reason for taking out a bridging loan (Q2 2017: 19%).

More than one in four of respondents (26%) cited buy-to-let lending restrictions as the biggest challenge facing UK finance brokers, while 24% said it was the government’s continued changes to buy-to-let legislations.

Due to these challenges, overall demand for bridging finance increased in Q2 2018, with 38% of brokers noticing a rise in bridging loan volume, up from 30% in Q1 2018.

The biggest demand for bridging loans during Q2 2018 came from the South East (30%), followed by the Midlands (19%).

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“With mainstream lenders implementing tougher affordability restrictions, it has been harder for investors to access funds and the feedback from our brokers suggests that more are turning to bridging finance as a result,” said Gareth Lewis, commercial director at mtf (pictured above).

“In particular, investors are looking to add value to a property rather than purchase a property as a straightforward portfolio investment.

“This trend is evidently not just limited to light and decorative refurbishment, but also property conversion, extensions, reconfiguration and smaller-scale, ground-up developments.

“We believe we will continue to see a substantial rise in the demand for development and refurbishment products throughout the rest of the year.”