South East

London and South East lending tops bridging report

Demand for bridging finance in the South East (excluding London) grew in Q3 2018, compared with the previous quarter, according to a new report.

The latest broker sentiment survey by mtf found that the South East had the biggest demand for bridging loans in the UK (48%), up from 30% in Q2.

Demand in London rose significantly growing from 16% in Q2 to 41% in Q3 and overtaking the Midlands as the second highest area for demand. 

However, brokers reported that the geographical spread of bridging loan demand narrowed during Q3, with demand in the North West, South West and Scotland dropping off compared with Q2.

The report also showed that overall demand for bridging finance grew in Q3, with 48% of brokers experiencing a rise in bridging loan volume, up from 38% in Q2.

For the third consecutive quarter, funding development projects was the most popular reason for taking out a bridging loan (31%), while business purposes was the second highest (21%), up from 16% in the previous quarter.

The report also found that 66% of brokers felt that the bridging loan process was longer than it was 12 months ago. 

Some 48% of respondents suggested that three to four weeks was the average length of time to complete a bridging loan, with 61% of the 113 brokers surveyed citing solicitors as the main reason for delays.

“The bridging finance industry is in promising shape and demand continues to grow, particularly from property investors looking to fund development projects in London and the South East,” said Gareth Lewis, commercial director at mtf. 

“However, speed has always been a vital element in bridging finance and it is essential we don't lose sight of this. 

“It is important that all parties involved – the lender, lawyer, valuer and the broker – move swiftly to complete to the borrower's schedule.

“It is important we stay true to the fundamentals of bridging: providing borrowers with fast access to the capital they need in a responsible and sustainable way and not fall into the more traditional computer banking model.”

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