The data comes from Bridging Trends

Bridging Trends data shows steady market for Q1 2024




Contributor gross bridging lending was at £196.2m in Q1 2024, according to the latest figures from Bridging Trends — a rise from £195.5m in Q4 2023.

Borrowers utilised bridging finance mostly to purchase investment assets in Q1, accounting for 21% of loans, down from 24% in Q4 2023.

Preventing a chain break was the second most popular purpose for obtaining bridging finance in Q1, rising to 19% from 16% in the previous quarter.

Business funding saw the largest increase, with a jump from 8% in Q4 2023 to 15% in Q1 2024, the highest number since Q4 2021 — the rise could have potentially been down to business owners seeking market certainty to grow their companies, according to Bridging Trends.

Second-charge loans hit a three-year high at 21.3% in Q1 compared with 11.6% in Q4 2023.

The number of regulated bridging loans increased from 44.2% in Q4 2023 to 51% in Q1 2024 — the highest it’s been since Q3 2020’s 53%.

According to this latest Bridging Trends report, the increase in regulated bridging also likely influenced the drop in the average monthly interest rate, which dropped from 0.91% in Q4 2023 to 0.89% in Q1 2024.

The average LTV was at 60% in Q1, rising fractionally from 59.3% in Q4 2023, while the average completion time for a bridging loan remained at 58 days in Q1.

For the tenth consecutive quarter, the average term was 12 months.

Gareth Lewis, managing director at MT Finance, said: “With momentum maintained in the first quarter, it’s clear that borrowers are continuing to turn to bridging lenders thanks to the certainty, speed, and flexibility we are offering them.

“Second charge bridges in particular have come to the forefront and show how brokers are working with their clients to maximise the equity in their properties without disturbing their current mortgages. I would not be surprised if this jump in second charges is also linked to the rise in regulated bridging, allowing homeowners to take out a cross charge and secure their dream home.

“What happens in the next quarter in the run-up to the election is hard to guess but regardless of what happens, I know I speak for everyone in the specialist finance industry when I say we remain committed to our clients and delivering the best outcome as quickly as possible.”

William Lloyd-Hayward, group COO and managing director at Sirius Finance commented: “The latest Bridging Trends data is yet another reminder of the resilience and versatility of the bridging sector.

“Overall lending continues to grow, and the diversity of this growth is striking. Demand from businesses for short-term property funding, for example, has doubled, while homeowners are increasingly turning to bridging, with the regulated part of the market jumping to pre-pandemic levels.

“At the same time, second charge bridging loans have hit a three-year high.

"The overall picture demonstrates that more brokers and borrowers are recognising bridging as a flexible solution to meet a wide variety of capital challenges — and this is a positive sign for the future growth of the sector.”

 

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