Bridging lending increases by a third

Bridging finance saw a 33% jump in lending activity during the third quarter of 2015, according to MTF.

Figures from its Bridging Trends publication showed that lending activity climbed to £131.7m from £99.1m in the second quarter as demand for short term lending soared.

It found that alternative lenders have continued to fill the funding gap left by mainstream lenders who have implemented tougher affordability restrictions.

The study discovered that mortgage delays were the most popular reason for accessing a bridging loan, representing 37% of all lending, while refurbishment was the second most popular reason at 21%.

Elsewhere, the average completion time for a bridging loan application increased to 46 days from 39 in the second quarter, while the average term fell by a month to 10 months.

Chris Fairfax, Managing Director of Positive Lending, said: “The bridging market continues to gather pace as a consequence of reduced pricing.

“These figures clearly demonstrate that bridging finance is being used for a number of purposes but mortgage delays remain most popular, our data would certainly agree with this.

“I was slightly surprised to see average completions taking 46 days, otherwise the statistics are broadly representative of our bridging business.”

Kit Thompson, Director of Bridging at Brightstar, also highlighted the increase in the amount of time it take to complete a bridging loan.

He said: “The biggest and most disappointing variance has been in the average completion time, which has increased quarter on quarter with the average now at 46 days.

“This is not a surprise as bridging cases still tend to experience two bottle-necks, which have plagued the industry for some time, namely valuation delays and legal delays, with the latter being the largest contributor to delayed completions.”