You are here: Home - Specialist Lending - Bridging -

Brokers demand higher LTVs amid strong Q1 bridging growth

  • 10/04/2018
  • 0
Brokers demand higher LTVs amid strong Q1 bridging growth
Bridging loan volume rose by almost a third in the first quarter of 2018 as demand for short-term finance remained strong, according to the latest Broker Sentiment Survey conducted by MTF.

The lender surveyed 119 brokers with 30% seeing a rise in bridging loan volume, with the biggest demand coming from the South East at 50%, up from 47% in the last quarter of 2017.

The most popular reason for taking out a bridging loan was to fund a development project at 27%, up from 19% in the fourth quarter of 2017.

Purchasing an investment property was the second most popular reason at 24%, followed by refurbishment at 21%.

This growth in development funding echoes figures from the Association of Short Term Lenders which showed lenders were increasingly servicing this market.


Higher LTVs

While reasons for choosing a lender were split, the key issue for lenders to enhance their offering was clear – 42% of brokers wanted to see higher loan-to-values (LTVs) available.

Around one in four respondents wanted greater flexibility on commercial lending, or faster turnaround times respectively.

None of the brokers surveyed felt the need for lower rates or further transparency.


Sector competition

The bridging sector has grown noticeably over the last six months with new lenders entering the market and rates falling as demand for short-term finance grows.

As a result, several lenders and brokers have reported record months, while competition was also the key issue cited as facing the sector by 37% of brokers.

The reasons cited for choosing a lender and what lenders could do to evolve their offerings also reflected the changing dynamics within the market.

Interest rates and pricing were the most important reason when choosing a bridging lender at 39%, with 33% of respondents saying flexibility was a key issue.

A quarter (26%) cited speed of completion as paramount but just 2% said an existing relationship with a lender was the most important factor.

MTF head of new business James Anderson said: “The feedback from brokers points to a strong need for specialist lending.

“Bridging finance is increasingly being used as a viable financial tool to provide real time funding to plug any gap before longer term finance can be put in place.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in


Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.


Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions
Read previous post:
Benson Hersch, Association of Short Term Lenders
‘Difficult and frustrating’ high street lending turning SME builders to bridging – Hersch

The UK Government has decided that it’s time to “fix our broken housing market” and the latest response to the...