Gross bridging lending fell by 5.5% on a quarterly basis in Q1 of this year, according to the latest figures.
The latest Bridging Trends Data report has revealed that contributor gross lending has fallen from £125.66 million in the last quarter of 2016 to £118.79 million in the first quarter of 2017. This figure is also below the £125.35m recorded in Q1 2016.
However, the number of regulated bridging loans transacted by contributors rose from 37.3% in Q4 2016 to 50.7% in Q1 2017, outperforming unregulated bridging loans for the first time since the Bridging Trends Data report was first published in April 2015.
Mortgage delays and refurbishment were the most common reasons for the use of a bridging loan. Mortgage delays accounted for 31% of all lending, falling from 35% in Q4 2016, while refurbishment contributed to 23% of all lending.
The report also found that first charge lending rose to 86.6% in Q1, up from 82.6% in Q4. Second charge lending fell however, from 17.4% in Q4 2016 to 13.4% in Q1 this year.
Loan-to-value (LTV) levels fell to 46.2%, on an average basis, but at 0.83%, the average monthly interest rates were up by 0.05% on Q4 2016.
On average, bridging loan applications took 50 days complete, an increase of two days on Q4 2016 and the average term of a bridging loan was 12 months.
Bridging Trends is a quarterly publication, conducted by bridging lender MTF and a variety of specialist brokers, designed to monitor the general trends in the bridging finance market.
Joshua Elash, director of bridging finance lender MTF, said:
“The significant swing towards regulated lending marks an interesting shift which, in turn, we consider has impacted the average time it takes to complete a bridging loan. Also, whilst the level of regulated activity is up it is interesting to see rates increase for the first time in five reporting cycles.
“Whilst it is too early in the year to draw any firm conclusions from this first quarter of data, it is these key parameters we are most keenly observing as we move forward in the year.”
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