The rise is the highest Q2 increase since the report began in 2015.

According to the bridging trends report, the main purpose for utilising bridging finance was to prevent chain break (23%), which according to Bridging Trends came from continued conveyancing delays in the mainstream mortgage market.

Investment purchase came in at second at 18%, falling from 21% in Q1 2024, which the research said came from the backdrop of uncertainty caused by sustained high interest rates and an early general election.

Auction purchase was the third most prevalent reason at 14%, jumping from 9% in Q1 — according to the report, this could be due to buyers taking advantage of undervalue sales as the property market remained relatively flat.

Unregulated bridging loans increased from 49% to 54.2% quarterly “as landlords and investors adapted to the new normal”, said the report, while regulated bridging decreased from 51% to 45.8%.

The amount of second charge bridging loans fell from 21.3% to 11.6% in Q2 as borrowers prioritised purchasing a property instead of releasing equity, said the report, while first charges rose from 78.7% to 88.4%.

Monthly average interest rate fell to 0.86%, while average completion time decreased from 58 to 52 days.

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Meanwhile the average LTV reduced only slightly from 60% to 59.3% while the average term remained at 12 months.

William Lloyd-Hayward, group COO and managing director, at Sirius Finance commented: “The latest Bridging Trends research confirms the continued growth and resilience in this sector of the market, but also the diverse ways in which bridging can be used.

“We often talk about short-term property finance as a tool for investors who may want to embark on a refurbishment project or buy a property at auction, for example, but the most popular use of bridging this quarter was amongst homebuyers who wanted to save their purchase in a chain break.“

Gareth Lewis, managing director at MT Finance, added: “With the property market relatively stagnant in Q2, specialist lending continued to offer a flexible approach to underwriting that further increased bridging’s attractiveness.

“This can be seen in the fact that this quarter’s contributor gross lending was a record high and is testament to the sector’s versatility.

“I am encouraged to see the uptick in unregulated lending and am hopeful that this marks a turning point for landlords and investors who have been hit so hard in recent years. That completion time dropped by six days from 58 to 52 indicates how hard everyone is working to get these deals over the line.”