Bridging lending close to £500m

Bridging lending close to £500m




Bridging loans worth £432.5m were completed in 2015 and this figure is expected to rise in 2016, according to MTF's Bridging Trends data..

 Bridging loans worth £432.5m were completed in 2015 and this figure is expected to rise in 2016, according to MTF’s Bridging Trends data.


The quarterly publication, conducted by lender MTF and a number of brokers – Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance - shows that £80.5m of bridging loans were completed in Q1 2015, and rose to £99.1m in Q2 and £131.7m in Q3, before slipping to £121.2 in the fourth quarter due to the Christmas slowdown.

Mortgage delays (44%) followed by refurbishment were the most popular reasons for accessing a bridging loan and average loan times remained consistent at 10-11 months throughout the year. 

Average monthly interest rates came under consistent downward pressure during 2015, falling to an average of 0.87% in Q4 down from 0.95% at the start of the year.

Joshua Elash, Director at MTF, said: “The final figures for 2015 show strong demand for bridging loans.

“A larger volume of completions in the second half possibly reflects a rebound from an earlier slowdown in the build up to the general election and the quieter summer months.

“The average term of a bridging loan suggests that bridging finance has become more affordable, making it more financially viable to use this type of funding over a longer period of time.” 

First charge loans accounted for over 80% of the market in all four quarters, while the majority of bridging loans completed throughout the year were unregulated.

Kit Thompson, Director of Bridging Loans at Brightstar, said the introduction of the Mortgage Credit Directive (MCD) had definitely impacted on the sector.

He said: “With only a small handful of bridging lenders left in the second charge market, I’m not surprised that first charge bridging continued to dominate.

“For the same reason, no surprise that Q4 saw a drop in the number of second charge bridging loans being written, as looming MCD regulation approaches, more and more second charge lenders will stop offering this service, unless they wish to get regulated for second charge consumer loans.”
 

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