You are here: Home - Specialist Lending - Bridging -

Regulated bridging lending hits lowest level since 2015 – MTF

by:
  • 31/10/2018
  • 0
Regulated bridging lending hits lowest level since 2015 – MTF
Regulated bridging loans fell to 32% in the third quarter 2018 compared to 37% in the second quarter, research has found.

 

Data from the MTF Bridging Trends showed that this figure hit the lowest level since Q1 2015.

Bridging loan volume transacted by contributors hit £213.35m in Q3 2018, an increase of £15.4m on the previous quarter.

This is the highest figure to date and comes after Clever Lending joined Bridging Trends as a new contributor.

First legal charge lending rose to 84% of all loans during Q3 2018, up from 81% in Q2 2018. Meanwhile, second charge loans decreased to 16% compared to 19% during Q2 2018.

For the second consecutive quarter, refurbishment purposes were the most popular reason for obtaining a bridging loan, as borrowers continued to add value to existing and newly purchased properties.

Mortgage delays were the second most popular reason for obtaining a bridging loan, accounting for 19% of all lending, down from 20% in the previous quarter. Whilst loans for auction purchases and business purposes increased in the third quarter by 3% and 1% respectively.

 

Drop in average monthly interest rate

The average monthly interest rate dropped to 0.8% in Q3, hitting the lowest rate recorded since Q4 2016. This activity translated into lower LTVs, with average LTV levels in Q3 decreasing by 1.5% to 55%.

The average completion time on a bridging loan application jumped to 46 days during the third quarter from 43 during the second quarter, as service and resource levels were impacted by annual leave.

The average term of a bridging loan in the second quarter remained at 11 months.

Commercial director at MTF, Gareth Lewis, said that property investors are seeking attractive opportunities to acquire properties where they can add value, a trend that shows no sign of slowing down.

He added: “Conversely the transaction flow in the regulated space has continued to show signs of slowing down. Is this a direct response to the everyday purchaser taking stock of Brexit and holding fire before looking to commit to the purchase of a new residence?”

Sonny Gosai, head of specialist lending at Clever Lending, said: “Whilst the data suggests that there has been a drop in regulated bridging activity, we have recently set up a team solely to provide regulated bridging advice as we have seen a growth in this area particularly for enquiries.

“It will certainly be interesting to see what the next quarter’s bridging trends results will be.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Bridging

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.

Commercial

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:
Bluestone Mortgages updates IVA criteria for Sapphire Club members

Bluestone Mortgages has updated its Individual Voluntary Arrangement (IVA) criteria for Supphire Club members.

Close