Property refurbishment was most popular use for bridging loans and some 69% of loans were unregulated.
Bridging Trends compiles data from lender MTF and packagers Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance (SPF) and is the first time any regular and wide-ranging measurement of the UK’s bridging finance industry has been recorded is such a way, ie, combining specific and unique distribution data from such a wide pool with that of MTF.
Bridging Trends will be updated quarterly and will measure key indicators such as average monthly interest rate, typical loan purpose and average completion time.
Joshua Elash, director of MTF, said: “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.
“Bridging Trends will be a useful tool for financial market players as it will deliver a more realistic representation on the specialist lending market.”
And he added: “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.
“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’?”
