★★★★★

Rated Excellent

UK Property Finance

★★★★★

Rated Excellent

open 7 days

UK Bridging Sector Maintains Momentum Throughout Q2

by | Aug 11, 2021 | Bridging Loans

The UK’s bridging finance sector held steady throughout Q2, achieving modest growth on Q1’s impressive overall performance. According to the latest Bridging Trends report from MT Finance, total bridging activity during the second quarter increased to £146.5 million from £144.5 million in the first quarter.

The report indicated that the vast majority of lending activity taking place during the quarter was made up of first-charge loans. MT Finance revealed that 90% of total market volume was made up by first-charge lending activity, an increase of more than 12% from the previous quarter.

Bridging loans calculator

The period’s impressive performance was credited in part to the number of landlords and investors looking to take advantage of the temporary stamp duty holiday. Investment property purchases remained the number-one application for bridging finance, accounting for almost 25% of all loans issued.

Chain break accounted for around 20% of all transactions, making it the second most popular bridging finance application during the period.

The report also indicated that the average bridging loan terms for Q2 were around 12 months, which is the same as the previous quarter.

The commercial director at MT Finance, Gareth Lewis, indicated no real surprise at the sector’s strong performance this year so far.

“As purchases would have been at the top of people’s minds due to the stamp duty saving, it’s no surprise to see that first charge lending has significantly increased its share of transactional volumes,” he said.

“It will be interesting to see if this percentage decreases in the coming months as consumers look to raise financing out of existing properties to fund further property acquisitions or businesses.”

Evidence of growing confidence in the UK property market

His sentiments were echoed by Chris Whitney, head of specialist lending at Enness, who commented on the generally positive outlook for the sector going forward.

“It looks like we have reached quite a stable platform over the last two quarters. Any previous pandemic worries seem to have been put to one side with the stamp duty holiday deadline, creating a frenzy of activity. The higher level of investment purchases shows confidence in the UK property market is strong,” he said.

“I am slightly surprised that lending volumes weren’t higher. The market certainly felt very busy as we struggled to get values out in a timely manner due to volumes, and many a solicitor had to burn the midnight oil to keep up with demand.”

Meanwhile, bridging and development finance specialist for Brightstar Financial, Stephen Watts, spoke of the significance of lenders and brokers streamlining application processes to reduce loan completion times.

“Some lenders are now offering automated valuation models up to 75 percent loan to value (LTV) in some circumstances, and with the ability for asset managers to benefit from modern technology and carry out virtual client meetings, more loan applications are benefiting from these time-saving factors,” he said.

Bridging loans calculator

Meanwhile, bridging and development finance specialist for Brightstar Financial, Stephen Watts, spoke of the significance of lenders and brokers streamlining application processes to reduce loan completion times.

“Some lenders are now offering automated valuation models up to 75 per cent loan to value (LTV) in some circumstances and with the ability for asset managers to benefit from modern technology and carry out virtual client meetings, more loan applications are benefitting from these time-saving factors,” he said.

 

Recent Posts

Financing Co-Living Spaces: The Next Frontier for UK Property Investors

The UK’s urban landscape is evolving, with young professionals, digital nomads, and transient workers seeking flexible, community-driven living solutions. Co-living, shared accommodation blending private bedrooms with communal spaces like kitchens, coworking areas,...

How Landlords Can Expand Their Portfolios Using Bridging Loans

For landlords looking to grow their property portfolios, bridging loans can be a powerful financial tool. These short-term loans provide quick access to capital, enabling landlords to seize time-sensitive opportunities in the UK property market. This blog post...

Are Bridging Loans Available to Businesses?

For businesses facing cash flow challenges or time-sensitive opportunities, bridging loans can be a game-changer. Property investors and businesses across various industries are increasingly using these short-term, flexible financing options. Can businesses access...

Right-to-Buy Mortgages: Turning Your Council Home Into Your Own

For many council tenants in England, the dream of owning their home is closer than they might think, thanks to the Right-to-Buy scheme. Introduced in the 1980s under the Housing Act, this government initiative allows eligible tenants to purchase their council home at...

Owner-Occupied vs. Investment Properties: Choosing the Right Commercial Finance Option

Are you a business owner looking to purchase commercial property in the UK? Whether you’re planning to occupy the space yourself or invest in a property for rental income, choosing the right financing option is crucial. In this blog post, we’ll explore the key...

Residential vs. Commercial Mortgages: Key Differences Every Borrower Should Know

When it comes to financing property in the UK, whether you’re purchasing your dream home or investing in a business premises, the type of mortgage you get will shape your financial commitments for years to come. In this blog post, we’ll compare residential and...

Using a Secured Loan to Raise a Deposit for Your Next Property Purchase

Purchasing a new property can be an exciting milestone, but one of the biggest hurdles is often coming up with a sufficient deposit. For many, a secured loan offers a viable route to bridge that gap. In this post, we will explore how secured loans work, the benefits...

Understanding Interest Rates and Loan Terms Through Calculators

Navigating the world of loans in the UK can feel overwhelming, especially when faced with various finance options and complex interest calculations. Fortunately, loan calculators are available for different options such as secured loans, bridging loans, development...

Key Housing Market Predictions for 2025

As we step into 2025, the UK housing market is poised for notable changes, particularly concerning mortgage rates. Recent analysis suggests a favourable shift for prospective homeowners and investors. Projected decline in mortgage rates The consumer body Which?...

How a Secured Loan Calculator Can Help You Make Smarter Financial Decisions

When contemplating a secured loan, the financial risks can be significant. Whether you're planning a home renovation, consolidating debt, or purchasing a vehicle, understanding your borrowing power and repayment terms is crucial. A secured loan calculator is a...

Categories