Preventing a property chain break drives record growth in Q2 bridging lending: MT Finance
According to MT Finance's latest Bridging Trends survey, demand for bridging finance is at an all-time high.
Contributors to the Bridging Trends report arranged £201.8 million in bridging loans in Q2 2024, a 2.9% increase on Q1’s £196.2 million and the highest Q2 figure since Bridging Trends records began in 2015.
Bridging loans are mainly used when homebuyers lack the funds to complete their purchase on time, or the sale of their property will not happen quickly enough to complete an onward purchase.
MT Finance's research of the specialist bridging finance market confirms the most popular use of a bridging loan in Q2 2024 was to prevent chain breaks, increasing from 19% in Q1 to 23% of bridging transactions.
Other popular reasons to take bridging finance include funding investment property purchases followed by auction property purchases. They were also taken to carry out heavy property refurbishments and for general business purposes.
The average bridging loan rate was 0.86% per month
MT Finance's report shows the average monthly interest rate borrowers paid for bridging loans was 0.86%. The average loan-to-value was 59%, and the typical completion time was 52 days. These loans typically lasted for one year.
Aaron Strutt, product director at Trinity Financial, says: "Bridging loans are generally considered to be one of the main ways to get cash quickly and "bridge the gap" between buying a property while waiting to secure a mortgage or funds generated from a property sale.”
"One large provider offers bridging rates between 0.69% and 0.85% per month up to 75% loan-to-value. It has a 2% completion fee and is available for loans between £100,000 and £5,000,000. The price gets marginally more expensive if you have a smaller deposit."
How Trinity Financial can help
Many lenders offer bridging loans, and the rates and setup fees vary greatly. Trinity Financial's brokers can access a private bank offering bridging loans linked to the Bank of England base rate and relatively low arrangement fees.
Article source: MT Finance and bridgingtrends.com
Trinity Specialist Finance, our sister company, also has access to a wide range of bridging, commercial, and development finance funding options. The firm works with lenders offering competitive rates and a number of exclusive deals in all these areas.
Trinity Specialist Finance has the experience and expertise to secure a specialist mortgage for your specific needs. Call the team on 020 7016 6151.
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