‘Bridging Trends’ is a quarterly report that reflects on the UK bridging finance market. Their most recent report has revealed a number of interesting developments in bridging finance, from average rates to a clear shift in industry regulation.
One particularly interesting find in the Bridging Trends report is that the average bridging completion time has increased—which might seem confusing for a market that is generally identified by its speed of movement. The average completion time for bridging loans in the first three months of 2017 has increased to 50 days.
This is likely a result of increased regulation in the bridging market. Of the loans offered in Q1, 50.7% were regulated, meaning that 49.3% were unregulated. This is the first time that the regulated loans have been more common than their unregulated counterparts.
However, this isn’t a cause for concern if you’re looking for quick finance—the average increase may be due to a variety of factors, and an increase in regulation certainly won’t stop Enness from being able to complete cases quickly. Lenders and clients associate bridging finance with speed and efficiency, and rightly so: we are still able to use our extensive panel of specialist lenders to secure you quick finance. Although the average time to completion has increased, this is still much quicker than a normal bank loan.
There are other factors to consider. If you need funding to cover a short period and rate-focused, for example, you may not necessarily need the offer in your hands within a week. On that note, the average term of a bridging loan in the first quarter of the year was 12 months, slightly longer than last quarter’s average of 11 months.
The average monthly rate secured in the first quarter of 2017 was 0.83%, which is slightly higher than the last quarter of 2016.
Finally, ‘mortgage delays’ continued to be cited as the primary purpose (31%) that borrowers were seeking bridging finance. 23% sought a bridging loan for refurbishment, followed by a ‘re-bridge’ at 13%, ‘business purposes’ at 12%, and ‘auction purchase’ at 4%.
How can we help?
Since its founding in 2008, Enness has always been involved in bridging finance. Last September, we launched a specialist bridging finance arm, Enness Bridging, which offers complete market experience and a specialist bridging finance team to assist you on your finance journey. Bridging finance can be extremely complicated—and as the results of the report suggest, is an ever-changing market. If you have any questions, please don’t hesitate to get in touch.