Average bridging completion time marked at 34 days

Average bridging completion time marked at 34 days



A number of representatives from the bridging finance industry have launched a new report titled Bridging Trends which highlights the latest key data….


A number of representatives from the bridging finance industry have launched a new report titled Bridging Trends which highlights the latest key data.

The infographic, which aims to deliver a realistic representation of the bridging market, covers data from bridging lender MTF, as well as a selection of leading financial packagers, such as Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance (SPF).

The report states that in the first quarter of the year gross bridging lending reached just over £80 million with the average LTV resting at 50.1 per cent. Also, the average completion time is charted at 34 days.

“There has been a lack of transparency in the bridging finance sector and we thought it would be beneficial to bring together a number of the UK finance industry’s largest packagers to collect data and present the objective information as a benchmark for the sector,” commented Joshua Elash, Director of bridging finance lender MTF.

“Bridging Trends will be a useful tool for financial market players as it will deliver a more realistic representation on the specialist lending market.”

Key points from the first Bridging Trends report from Q1 of 2015 include:

•    Gross lending reached £80.5 million
•    Average term 11 months
•    Average monthly interest rate was 0.95 per cent
•    Average LTV was 50 per cent
•    Property refurbishment was most popular use for bridging loans
•    69 per cent of bridging loans were unregulated

“In its first quarter, the data has already shed light on some interesting factors in the bridging finance market.  A significant percentage of bridging loans are unregulated, suggesting they are largely being used in a commercial context.  LTV levels remain sensible, notwithstanding some recent entrants offering high LTV loans,” said Joshua Elash.

“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’?”

Chris Whitney, Head of Commercial Finance at Enness Private Clients added: “Typically the first three months of the year can be unpredictable in terms of completions, but the overall loan to value was surprisingly low.  

“The average rate on the other hand was surprisingly high in an environment where pricing is under downward pressure. This can be accredited to the more expensive highly specialist and niche short term financing requirements (like leasehold restaurants) which helped balance the overall figures.”

Kit Thompson, Director of Bridging at Brightstar Financial 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 per cent). The average monthly rate, which at 0.95 per cent 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 six 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."

The Bridging Trends report can be viewed here.



1 Comments

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    Norberto Conradi

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