Annual bridging lending jumps 56% in Q1

A new survey has found that annual bridging lending increased by 56% (£80.47 million) in Q1 2016, reaching £125.35 million, a 3.4% increase on Q4 2015.

The survey also discovered that unregulated bridging loans continue to outperform regulated bridging loans, although there was an increase in regulated loans from 35.9% in Q4 2015 to 42.5% in Q1 2016.

Led by MTF, in conjunction with Brightstar Financial, Enness Private Clients, Positive Lending and SPF, the survey has revealed that mortgages delays are the most popular reason for accessing a bridging loan, with bridging finance accounting for 42% of all lending in Q1 2016, a slight drop from 44% in Q4 2015.

The data points to a rise in second legal charge lending, from 9.56% during Q4 2015 to 17.5% in Q1 2016.

A rise was also seen in average loan-to-value (LTV) levels, from 49.9% in Q4 2015 to 52.8% in Q1 2016, and average monthly interest rates rose 0.02% on the previous quarter to hit 0.89%.

The average completion time on a bridging loan application decreased by four days and for the third consecutive quarter, the average term of a bridging loan was 10 months.

Joshua Elash, director of bridging finance lender, MTF, said:

“It is positive to see an increase in the gross lending volumes and although there has been upward movement on both the weighted average interest rates and LTVs, both continue to suggest that the market is healthy for consumers and is behaving responsibly.”

 

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