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Bridging volumes flat in Q2 as LTVs and rates rise – MT Finance

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  • 25/07/2019
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Bridging volumes flat in Q2 as LTVs and rates rise – MT Finance
Bridging transactions were flat at £184.82m in Q2 compared to Q1 2019, reported MT Finance's Bridging Trends survey.

 

The average loan to value rose to 52.85 per cent, up by 1.55 per cent and the average monthly interest rate was 0.79 per cent, a raise of 0.05 per cent.

Investment property purchases remained the most popular use of bridging loans for the second consecutive quarter, comprising 25 per cent of lending, up from 22 per cent in Q1.

Bridging Trends collated lending figures from MT Finance and specialist brokers Brightstar Financial, Clever Lending, Complete FS, Impact Specialist Finance, Positive Lending, Pure Commercial Finance, Y3S and UK Property Finance.

Chain-braking was the second most popular use of bridging in Q2, at 18 per cent of lending.

“I’m not surprised that chain-break finance was the second most popular reason for obtaining bridging finance,” said Impact Specialist Finance managing director Dale Jannels.

“We’re in uncertain times and this uncertainty transfers into property transactions, short-term finance might get a deal over the initial line.”

 

Longer to complete

Business purposes comprised 12 per cent of all bridging loans in Q2, up from eight per cent in Q1.

The number of regulated loans fell to 37.5 per cent, down 2 per cent.

Second charge loan transactions grew to 18.7 per cent, up 2 per cent.

The average term of a bridging loan remained at 12 months for the third quarter in a row and the average completion time rose by four days to 44 in Q2.

 

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