Bridging Loans
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Brokers have reported a jump in bridging loans volume, as borrowers struggle to secure mortgages from mainstream lenders, according to research.

Almost two-thirds of brokers reported a rise in bridging volumes in the third quarter of 2017, up from under half in the three months previously, a survey by lender MTF showed.

It comes as borrowers are hit by tougher restrictions from mainstream lenders, MTF said.

The regional spread of demand for bridging loans has also widened, with more demand in Scotland and Northern Ireland, according to the survey.

Overall, the South East was found to have the biggest demand for bridging loans, followed by London.

Development projects and business purposes are the most popular reasons for taking out bridging loans, accounting for 30% and 17% respectively.

The bridging loan process took longer than it did 12 months ago, according to two-thirds of brokers surveyed.

More than half said completion took more than three weeks and fewer than one in five reported the process as between one and two weeks.

Speed is of the essence

Almost three-quarters of brokers surveyed blamed solicitors as the main reason for delay, with the value also causing problems for around one in ten.

James Anderson, head of new business at MTF, said: “Bridging loans remain an important financial tool for borrowers and demand continues to grow.

“Speed has always been a vital element in bridging finance and it is important that solicitors understand what is required, so that bridging finance requests can be completed as quickly and accurately as possible.

“There are some excellent firms of solicitors to choose from and many bridging loan lenders, like MTF, use a panel of pre-approved firms to help speed up a bridging loan transaction for the applicant.”

Source: Mortgage Solutions

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