BRIDGING TRENDS: MCD drives growth spurt for bridging industry
Annual gross bridging lending jumped by 56% in the first quarter 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), and a 3.4% increase on Q4 2015 (£121.21 million).
Bridging Trends is a quarterly publication conducted by MTF, and specialist finance brokers: Brightstar Financial, Enness Private Clients, Positive Lending, and SPF, to monitor the general trends in bridging finance.
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 42% of all lending in Q1 2016, dropping slightly from 44% during Q4 2015. Refurbishment was the second most popular reason for getting a bridging loan, contributing to 21% of all lending.
First charge lending remained solid, while second legal charge lending for the quarter rose to 17.5%, from 9.56% during Q4 2015.
Average LTV levels climbed from 49.9% in Q4 2015, to 52.8% in Q1 2016, and average monthly interest rates hit 0.89%, an increase of 0.02% on the previous quarter.
The average completion time on a bridging loan application decreased by 4 days.
For the third consecutive quarter, the average term of a bridging loan remained at 10 months
Key data points from Bridging Trends in Q1 of 2016 are as follows:
– Total contributor lending reached £125.35 million- up 56% on Q1 2015
– Average completion time decreased to 37 days in Q1 2016, from 41 days in Q4 2015
– Average LTV increased to 52.8%- the highest recorded by Bridging Trends
– 42.5% of bridging loans were regulated in Q1 2016, up from 35.89% on the previous quarter