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2019 Bridging Trends Revealed

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2019 Bridging Trends Revealed

Despite 2019’s political uncertainty, demand for bridging finance remained remarkably stable, according to the latest Bridging Trends data.

  • Average monthly interest rates continue to fall year-on-year
  • Regulated bridging loans increased market share
  • 2nd charge loans saw highest market volume in 2019
  • Average LTV levels fell to an average of 53%

Whilst a significant portion of bridging loan activity was unregulated in 2019, at an average of 64% of all transactions, regulated bridging loans increased market share to an average of 39% in 2019, compared to 36% in 2018.

Average monthly interest rates continue to fall year-on-year, highlighting the large levels of liquidity in a continually competitive space. The average monthly interest rate in 2019 was 0.76%, lower than in 2018 (0.81%), 2017 (0.83%) and 2016 (0.85%).

Gareth Lewis, commercial director at MT Finance comments: “Despite a disruptive year for the property market owing to the political uncertainty, the figures provided for 2019 were encouraging. Property professionals have continued to utilise bridging finance as a tool to support their investment. We have also seen heavy refurbishment continue to grow as investors and developers look to maximise their capital returns.

Why use impact for Bridging?

  • We can immediately identify lenders who can assist with specific circumstances – bridging is not one size fits all
  • We have access to bridging lenders who operate on a limited distribution basis
  • We have Lenders on-site to support us
  • We can deal with the day to day processing of the application giving you more time to generate further new business
  • You may receive a higher procuration fee then if you went directly to the lender

A recent Bridging example:

It’s that time of the year – the tax return has gone in – does your client have enough funds set aside to cover your tax bill or is there a shortfall?

Did you know that non regulated bridging lenders will allow a second charge mortgage against your clients residential home for business purposes. Our friendly, helpful and professional bridging team are here to help and assist you further with this.

The case – we were approached by an introducer whose client had a cash flow issue which meant that he had insufficient funds to pay his impending tax bill.

The applicant was a residential homeowner with a first charge mortgage from a high street lender. We ascertained that the business was not financially vulnerable and there was sufficient evidence to satisfy us that the business would recover from this blip within the next 6 months.

A second charge bridging loan was agreed on a non regulated basis secured against the residential home and funds released in time to avoid the client incurring any additional interest penalties. The bridging loan was repaid in full within the next 3 months.

Submit your bridging DIP via our Portal system or email any enquiries to bridging@impactsf.co.uk.