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Bridging loan volumes at a record high

Posted: May 10, 2018

Bridging loans to the value of £154.02 million were arranged in the first quarter of 2018. This is nearly a third up compared to the same period in 2017, and the highest recorded quarter total since the Bridging Trends data was first published in 2015.

In the first quarter of 2015, there were bridging loans to the value of

£50.47 million, which means that, at £150.02 million, bridging finance activity has almost doubled.

The top reason for bridging loans was because of mortgage delays, and these accounted for 24% of the total lent. The second reason, at 20% was to complete the purchase of property bought at auctions.

The interest rates of bridging loans have remained steady at an average of 0.83%. Regulated bridging loans accounted for 43.7% of loans in the first quarter of 2018, compared to 42.6% in the first quarter of 29017.

First charge lending rose to 83.7% of the total lending in the first quarter of 2018, compared to 80.3% in the same period of 2017. Second charge loans were 16.3% of the total, compared to 13.4% in the first quarter of 2017.

A few years ago, bridging lending was seen as a niche lending tool, but the latest figures show that bridging finance is now regarded as a mainstream lending platform. Part of the 2018 increase in lending could be because of the many lenders who specialise in sections of the bridging market such as auction property finance, commercial bridging finance and redevelopment finance.