Big Increases

Annual gross bridging lending increased by 56% during the first three months of 2016, according to the latest Bridging Trends data.

Data from Bridging Trends confirmed another strong quarter for bridging volumes, with contributor lending reaching £125.35 million in the first quarter of 2016 – an annual increase of 56% (£80.47 million).

Unregulated bridging loans continued to outperform regulated bridging loans, though the number of regulated loans transacted by contributors increased from 35.9% in Q4 2015, to 42.5% in Q1 2016.

For the fourth consecutive quarter, mortgage delays were the most popular reason for accessing a bridging loan, at 48% of all lending in quarter one 2016.

The average completion time on a bridging loan application decreased by 1 day and for the third consecutive quarter, the average term of a bridging loan remained at 10.3 months.

What is a puzzle to the industry is why a mainstream mortgage takes such a long time to complete given that so much of the process is now automated at so many lenders. Whereas a bridging loan which is underwritten individually on a case by case basis can be completed in under10 days if it is a clean cut case.

It is little wonder bridging is becoming more popular as a re-mortgage these days can take up to 3 months to complete. Interest rates on bridging finance have reduced significantly over the last 2 years and are now very cost effective and affordable.

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