The UK association of Bridging Loan Lenders

Investment Bridging Loans Increase In Q2

The results are in & there's a change at the top of the table!

The latest report from Bridging Trends has revealed the top bridging loan purpose in Q2 2021 was for investment purchases.

24% of bridging loans were used for property investments, an increase from 19% in Q1. During the previous 2 quarters, the most popular use of a bridging loan was to fund a property Chain Break, contributing to 20% of all loans in Q1 2021 (& 20% in Q4 2020). 

The top bridging loan purposes in Q2 2021:

  • Investment Purchase = 24%, up from 19%
  • Chain Break = 21%, up from 20%
  • Refurbishment (Heavy) = 15%, up from 10%

Unregulated Refinance (6%), Regulated Refinance (5%), Auction Purchase (4%) & 'Other' Finance were the purposes with the least briding loan uses in Q2 2021.

Increased Tenant Demand & Stamp Duty Holiday

The latest figures from Bridging Trends contributors highlight how property investors and landlords took advantage of tenant demand and the stamp duty holiday deadline at the end of Q2 to expand their portfolios.

Gareth Lewis, commercial director at MT Finance said, “As purchases would have been at the top of people’s minds due to the stamp duty saving it’s no surprise to see that first charge lending has significantly increase its share of transactional volumes. It will be interesting to see if this percentage decreases in the coming months as consumers look to raise finance out of existing properties to fund further property acquisitions or businesses.”

Steady Market

The bridging loan market held steady in the second quarter at £146.52 million, a nominal percentage rise on the previous quarter (£144.51m), contributors reported.

Head of Specialist Lending at Enness, Chris Whitney,  said, “It looks like we have reached quite a stable platform over the last two quarters. Any previous Pandemic worries seem to have been put to one side with the SDLT holiday deadline creating a frenzy of activity. The higher level of investment purchases shows confidence in the UK property market is strong."

Quickest Average Completion Times Since Q2 2019

The time taken to process a loan application also fell, with average completion times reported at 47 days, down from 53 days in the first quarter. This was the lowest recorded timescale for completions since the second quarter of 2019.

Chris Whitney said, "Nice to see the time it takes to draw a loan heading in the right direction albeit was that again SDLT deadline linked? It will be interesting to see where that is at in the next quarter.”

To discover the full Q2 2021 report, visit Bridging Trends.

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