Gross bridging lending totals £156.8m in Q1

Total gross lending hit £156.8m in the UK bridging finance market during Q1 2022, new data published by Bridging Trends has shown.

This is an increase on £145.4m for Q4 2021.

Bridging Trends revealed that 56% of transactions for Q1 2022 were in the regulated bridging market, with 44% in the unregulated. These figures differ from the previous quarter when the split was 36% regulated and 64% in the unregulated bridging market.

The average monthly interest rate for the first quarter was 0.71%, a figure down from the 0.77% in Q4 2021. Figures also showed that the average LTV for a bridging fell slightly to 54.5%, in comparison to the previous quarter when the average LTV was 57.3%.

Furthermore, the average completion time for a bridging loan in Q1 2022 was 53 days, which was slightly quicker than the previous quarter when the average stood at 56 days.

Contributors to the latest Bridging Trends data included Adapt Finance, Brightstar Financial, Capital B, Clever Lending, Clifton Private Finance, Complete FS, Enness Global, Impact Specialist Finance, LDNfinance, Optimum Commercial, Sirius Group, and UK Property Finance.

Head of corporate partnerships at Sirius Property Finance, Kimberley Gates, commented: “It comes as no surprise that bridging loan transactions have increased again from the previous quarter – the property market continues to be turbulent for a variety of well publicised reasons so borrowers are looking for increasingly innovative ways to structure their debt.

“The stigma surrounding bridging also continues to subside as more investors, developers and homeowners are starting to see it as a useful tool for realising their real estate goals and no longer as a last resort.”

Head of bridging at Clifton Private Finance, Sam O’Neill, said: “The increase in chain break transactions and regulated bridging is another positive sign. An increasing number of homeowners are seeing bridging finance as something they can confidently rely on and trust it as a viable financial product. When looking for reassurance that the industry is going in the right direction, we can’t ask for more positive feedback than that.

“We have seen some lenders capitalise on the ever-decreasing USP’s available in the market but smaller loan amounts at decent rates have been snapped up so I think the minimum loan amount criteria search might see some traction over the next quarter. I don’t see this hugely boosting lending volumes but perhaps this may be reflected in transaction volumes.”

Impact Specialist Finance managing director, Dale Jannels, added: “This latest Bridging Trends highlights more than ever that cash is king. This applies to homeowners wishing to get their offer accepted before they have sold their own property, as well as investors wanting to raise funds quickly to invest in stock or refurbish existing to achieve better yields for example.

“The shortage of suitable housing stock will undoubtedly drive increased volumes in the bridging sector for the foreseeable future.”

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