Growth in demand for bridging finance
Quarter 2 2015 saw a significant increase in applications for bridging loans with loans for mortgage delays increasing from 8% in Quarter 1 up to 33% in Quarter 2. Financial commentators have put this down to the uncertainty in the mortgage market in the period before the general election. The demand for a short term loan was strong, climbing from £80.47M in Quarter 1 up to just under £100M in Quarter 2.
Regulated bridging loans performed best whilst refurbishment was the second best performing area of the industry. Bridging loans for businesses fell from 24% in Quarter 1 to 16% in Quarter 2. The average term for a bridging finance loan was 11 months.
Head of Property Lynne McCaffrey comments:
“Borrowers are continuing to demand bridging finance and indeed the bridging sector is growing. Speed of transaction plays an important part in bridging and the conveyancing process is fundamental to achieving the speed required. We’re finding that borrowers are increasingly turning to specialist conveyancers when taking up bridging finance for a property purchase because they want to deal with property solicitors who have expertise in that sector.
“Buying a property is in most cases a stressful experience, with the speed of bridging finance transactions that stress is often heightened. Using a specialist conveyancer such as ourselves can help not only in speeding up the process but also in ensuring that the conveyancing is conducted to the high standards of quality demanded by the Law Society’s Conveyancing Quality Scheme.”
Content correct at time of publication