Investor demand rising in bridging market

Investor demand is increasing in the bridging market, according to research by MT Finance.

The lender’s latest Bridging Trends data shows that for the second consecutive quarter the most popular use of a bridging loan was to purchase an investment property, equating to 25 per cent of all lending in Q2 2019.

This figure increased from 22 per cent seen in Q1 of this year.

Breaking a property chain was the second most popular use of a bridging loan for 18 per cent of cases.

The use of bridging loans for business purposes rose from 8 per cent of all loans in Q1 2019 to 12 per cent in Q2.

Looking at bridging loan volumes, the total figure fell by £500,000 to £184.8m between Q1 and Q2.

Within the same time frame the average LTV in this sector rose by 1.55 per cent to 52.8 per cent and the average monthly interest rate also increase by five basis points to 0.79 per cent.

From the first quarter of the year to the second the number of regulated loan transactions fell from 38.3 per cent to 37.5 per cent.

However, second charge loan transactions increased between Q1 and Q2, from 18.3 per cent to 18.7 per cent.

The average term of a bridging loan remained at 12 months for the third consecutive month and the average time taken to complete the application process rose by four days to 44, the research shows.

The data is calculated by collecting information from MT Finance, Brightstar Financial, Clever Lending, Complete FS, Enness, Impact Specialist Finance, Positive Lending, Pure Commercial Finance, Y3S, and UK Property Finance.

MT Finance commercial director Gareth Lewis says: “Now that Boris Johnson has been announced as the new PM and has made Brexit top of his to-do list, this should help give the market the certainty it needs.

“If the rumours of a stamp duty overhaul are true- we expect the change to ease the pressures of regulation and excessive taxation on UK property investors.”

Impact Specialist Finance managing director Dale Jannels adds: “I am not surprised that chain break finance was the second most popular reason for obtaining bridging finance in the last quarter. We are in uncertain times and this uncertainty transfers into property transactions.

“Customers are also being gazumped and looking for short-term finance assistance to speed up the purchase of their dream property.

“Add in the complexity of many property transactions and the high-street lender will say no, yet short-term finance might get them over the initial line.”


Professional landlords call for manual underwriting process: MT Finance

More than a third of investors want buy-to-let lenders to apply a manual underwriting process for professional landlords, according to a survey by MT Finance. The lender’s Property Investor Survey shows that four in 10 (42 per cent) property investors said they had struggled to secure a mainstream buy-to-let mortgage in the past 12 months. […]


UK property investors remain positive: MT Finance

The majority of UK property professionals are set to expand their portfolios in 2019, remaining resilient despite a backdrop of uncertainty and squeeze on affordability. MT Finance polled property professionals as part of its research into the future performance of the UK property sector. It found 80 per cent of investors plan to increase their […]

Health - thumbnail

Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.


News and expert analysis straight to your inbox

Sign up

Why register with Mortgage Strategy?

Mortgage Strategy continues to be the market-leading B2B mortgage publication in the UK, and provides trusted, independent insight with the aim of helping, promoting and analysing the latest developments for mortgage professionals.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Mortgage Strategy Events
Be the first to hear about our industry leading conferences, awards, webinars and more.

Research and insight
Take part in and see the results of Mortgage Strategy's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now