Take a look at the infographic below to see the trends that shaped the Bridging Finance Market in Q1 2015.
- Gross lending reached £80.5m
- Average term 11 months
- Average monthly interest rate was 0.95%
- Average LTV was 50%
- Property refurbishment was most popular use for bridging loans
- 69% of bridging loans were unregulated
Joshua Elash, managing director of mtf comments on the Q1 2015 trends:
However, the most significant result involves duration. An 11 month average term signifies how the bridging loan market has changed over time from being a short term fix to a longer-term facility, providing extra breathing space to the rising number of borrowers struggling to secure mainstream funding. These results suggest ‘bridging finance’ is no longer a broadly appropriate phrase and poses the question, ‘is this the new breed of specialist lending’?
Kit Thompson, Director of Bridging at Brightstar Financial – Your Specialist Finance Partner, said:
The split of 1st and 2nd charge business was as I would expect, as was the Regulated Vs Non-regulated business split. The real stand-out trends for me were the average LTV, which was surprisingly low (at 50%). The average monthly rate, which at 0.95% was higher than I expected and also the 11 month average term, which once and for all should put to bed the misconception that bridging loans are typically repaid in less than 6 months.
Here at Brightstar we always encourage our brokers and borrowers, to take more time than they consider they need, just to safe-guard them against defaulting. With exit fees generally being a thing of the past, clients can always redeem early, but failing to repay by the end of the term can be extremely costly. This is where borrowers need to seek advice from bridging experts.
Chris Whitney, Head of Commercial Finance at Enness Private Clients said: