Gareth Lewis

Investment property purchases remain most popular use of bridging loans

For the second consecutive quarter, the most popular use of a bridging loan was to purchase investment property, according to the latest research.

Bridging Trends revealed that investment property purchases contributed to 25% of all lending in Q2 2019, up from the 22% recorded during Q1 2019.

Other highlights from the data included:

  • a traditional chain-break was the second most popular use for bridging finance in Q2 2019, contributing to 18% of all lending
  • bridging loans for business finance increased to 12% (Q1 2019: 8%)
  • bridging growth stabilised in Q2 2019, with bridging loan volume transacted by contributors hitting £184.82m (Q1 2019: £185.32m)
  • average LTV levels increased by 1.55 percentage points in Q2 2019 to 52.85%
  • the number of regulated loans transacted by Bridging Trends’ contributors fell from 38.3% in Q1 2019, to 37.5% in Q2 2019

The latest Bridging Trends grouped together figures from lender MT Finance and specialist finance brokers Brightstar Financial, Clever Lending, Complete FS, Enness, Impact Specialist Finance, Positive Lending, Pure Commercial Finance, Y3S, and UK Property Finance.

“Now that Boris Johnson has been announced as the new PM and has made Brexit top of his to-do list, this should help to give the market the certainty it needs,” said Gareth Lewis, commercial director at MT Finance (pictured above).

Dale Jannels, managing director at Impact Specialist Finance, added: “I’m not surprised that chain-break finance was the second most popular reason for obtaining bridging finance in the last quarter.

“We’re in uncertain times and this uncertainty transfers into property transactions also.” 

Kit Thompson, director of short-term lending and development at Brightstar Financial, concluded that bridging finance was a trend Brightstar expected to see continuing “well into the future”.

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