Bridging lending was 40.9% higher in the second half of the year compared to the first, MT Finance’s Bridging Trends data has revealed.
In the first half bridging lending totalled £181.6m and in the second it reached £252.9m – meaning £432.5m was lent in the whole year.
A mortgage delay was the most popular reason to take out a bridge in 2015, with the general election and pressure imposed on banks from regulation resulting in delays. Refurbishment was the second most popular reason.
The data was conducted with specialist finance brokers Brightstar Financial, Enness Private Clients, Positive Lending and SPF Short Term Finance.
Joshua Elash, director of bridging finance lender MTF, said: “A larger volume of completions in the second half possibly reflects a rebound from an earlier slowdown in the build up to the general election and the quieter summer months.
“Interest rates were under consistent downward pressure throughout the year as the bridging sector continued to be highly competitive, whilst at the same time displaying high levels of liquidity.
“The average term of a bridging loan suggests that bridging finance has become more affordable, making it more financially viable to use this type of funding over a longer period of time.”
The average bridging interest rate fell to an average of 0.87% in the fourth quarter, down from 0.95% in the first quarter.
First charge loans accounted for over 80% of the market in all four quarters, while the majority of bridging loans completed throughout the year were unregulated.
Kit Thompson, director of bridging loans at Brightstar said: “With only a small handful of bridging lenders left in the second charge market, I’m not surprised that first charge bridging continued to dominate. For the same reason, no surprise that Q4 saw a drop in the number of second charge bridging loans being written, as looming MCD regulation approaches, more and more second charge lenders will stop offering this service- unless they wish to get regulated for second charge consumer loans.
“Rates have continued to fall slowly over the year, as increased competition pushes down margins and lenders compete aggressively, primarily in the regulated space, for the cheapest rate. Generally, bridging is considered by many to be a sub 1% per month market now.”