Increasing demand for bridging finance

There has been a 33% increase in bridging finance lending activity during the third quarter, despise of the slowdown in summer.

When compared with £99.1m from the second quarter the lending activity has climbed up to £131.7m in third quarter showing the demand for the short term lending.

There has been a consistent growth in the interest rates, averabridging-finance-demandge terms and LTV data in first three quarter reports gives a reliable insight to the bridging finance market. The demand for bridging finance is getting stronger especially to cap the funding gap left by mainstream lenders implementing tougher affordability restrictions. Refurbishment was the second most popular reason for getting a bridging loan. Meanwhile, mortgage delays are the most popular reason for getting a bridging loan.

Bridging Trends in third quarter of 2015 includes total provider lending reaching £131.72m – an increase of 32.9%; average term falling by a month to 10 months; average monthly interest rate increased by 0.01% and average LTV increased in the third quarter to 50.9%.

Expert says: “The bridging market is continuing to rise as a consequence of reduced pricing. The Bridging loan market has recently been seeing increase in volume and increase in loan size as well. This proves bridging is no more small business as it used to be; now it is being used by sophisticated real estate professionals and businesses. However the average LTV in bridging remains low. Apart from the increase in lending, the third quarter prediction shows that the bridging market will continue to increase. The most unsatisfactory conflict is the average completion time, which has increased from the previous quarters with the average now of 45 days. This may be reduced on lenders increasing number of surveyors on their panel.”

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