Investment property maintains title as no.1 use of bridging finance

Bridging Trends’s latest reports reveal that investment property continues to be the number 1 most popular reason for taking out a bridging loan. Bridging Trends collected its figures from the following lenders and finance brokers within the industry: Brightstar Financial, Clever Lending, Enness, Complete FS, Impact Specialist Finance, MT Finance, Pure Commercial Finance, Positive Lending, UK Property Finance and Y3S.

This is the area’s second quarter for the year as the most popular reason for taking out a bridging loan, contributing 22% of the entire lending sector in Q1 (for 2019) and 25% in Q2 (also for 2019). Following investment property, the second most popular use of a bridging finance loan was a chain-break, contributing 18% of the entire lending sector.

The amount of loans that the contributors of Bridging Trends handled went down to 37.5% in the second quarter for 2019 compared to 38.3% in the first quarter. by Following this reduction in transactions, there was a subsequent decrease of £500,000 from Q1 to Q2 for this year, going down from £185.32 million to £184.82 million respectively. Monthly interest rates increased by 0.05% from the first to the second quarter, being 0.79% in Q2.  

Impact Specialist Finance’s managing director Dale Jannels has commented on these results, stating that “I’m not surprised that chain break finance was the second most popular reason for obtaining bridging finance in the last quarter. We’re in uncertain times and this uncertainty transfers into property transactions also.” 

Jannels furthers their point, reflecting on the fact that “Customers are also being gazumped and looking for short-term finance assistance to speed up the purchase of their dream property. Add in the complexity of many property transactions and the high-street lender will say no, yet short-term finance might get them over the initial line.”

MT Finance was one of the major organisations that Bridging Trends used in their reports. Launched in 2008, MT Finance is a lender in bridging finance that has won numerous awards. Awards received by MT Finance include the following; Business Moneyfacts award for the Best Service from a Bridging Finance Provider (2014), Financial Reporter Awards for the best Short-term/Bridging Lender (2015), and Property Wire Awards for Bridging Lender of the year (2018). It has helped to provide finance to a multitude of different property investors as well as businesses and individuals, helping to further their customer’s growth and success. 

MT Finance’s commercial director Gareth Lewis has made the following comments in relation to the property investment sector, stating “Now that Boris Johnson has been announced as the new PM and has made Brexit top of his to-do list, this should help to give the market the certainty it needs”