Annual gross bridging lending was up by 56% during the quarter of 2016, the latest Bridging Trends survey has found.
The firms contributing to the survey lent £125.35m in Q1 which represents a 3.4% increase on Q4 2015 (£121.21m).
Joshua Elash, director of bridging finance lender MTF, said: “It is positive to see an increase in the gross lending volumes and although there has been upward movement on both the weighted average interest rates and LTVs, both continue to suggest that the market is healthy for consumers and is behaving responsibly.”
Kit Thompson, director of Bridging Loans at Brightstar, added: “Once again the biggest reason for someone taking out a bridging loan is because of delays with their long term mortgage. This is shocking and causes unnecessary costs for borrowers.
“It is always a surprise to me that a mainstream mortgage takes such a long time to complete given that so much of the process is now automated at so many lenders, whereas a bridging loan which is underwritten individually on a case by case basis can be completed in under 40 days.
“While it is full credit to the bridging industry that they can rise to the challenge to ensure that people do not lose the opportunity to buy their new home, it is surely time that mainstream mortgage lenders did likewise.”
Unregulated bridging loans continued to outperform regulated bridging loans although the number of regulated loans transacted by contributors increased from 35.9% in Q4 2015, to 42.5% in Q1 2016.
Mortgage delays continued to be the most popular reason for getting a bridging loan (42%) whilst refurbishment was the second most popular reason accounting for 21% of all lending.
Average LTV levels were up from 49.9% in Q4 2015 to 52.8% in Q1 2016 and average monthly interest rates increase 0.02%to 0.89%.
Bridging Trends is a quarterly publication from bridging lender MTF and partners including Brightstar Financial, Enness Private Clients, Positive Lending and SPF.