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Two-thirds of brokers report bridging rise

65% of brokers saw an increase in bridging loan volume in the third quarter of 2017, a rise on 48% in the second quarter, according to the latest Broker Sentiment Survey from bridging lender, mtf.

The geographical spread of bridging loan demand also broadened in the third quarter and for the first time 9% of the 96 brokers surveyed cited an increase in demand in Scotland and Northern Ireland, respectively.

For the fourth consecutive quarter, the South East saw the biggest demand for bridging loans in the UK at 48%, although this represented a drop from 62% in Q2. The second highest area of demand was London, at 25%.

Also for the fourth consecutive quarter, funding development projects was the most popular reason for taking out a bridging loan at 30%, followed by business purposes at 17%.

However, some 69% of brokers said the bridging loan process took longer than it was 12 months ago. While 45% said it took under three weeks to complete a bridging loan, and 18% cited a mere one to two weeks, some 55% said it took in excess of three weeks.

34% suggested three to four weeks was the average length to complete a bridging loan, while 21% indicated that bridging loan cases generally took more than four weeks to complete.

Almost three-quarters of brokers surveyed blamed solicitors as the main reason for delay, followed by the valuer at 13%.

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.

“At mtf, we take a fast, non-status based approach to lending going back to the traditional roots of bridging finance. Our approach is streamlined; no application forms, no upfront fees, offers in principal within 12 hours of enquiry and valuations within 48 hours.”

Source: Best Advice

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Brokers confident for 2018

Brokers are confident about the state of business and the wider economy in 2018, two pieces of research indicate.

Bridging lender mtf found that 68% of brokers believe overall market conditions will improve in 2018, compared to 31% in the same period the year before.

Meanwhile Shawbrook Bank found that 78% of brokers are fairly or very confident about the lending environment as a whole and 69% are fairly or very confident about their business growth

Furthermore, about half (49%) are about the UK economy post Brexit.

James Anderson, head of new business at mtf, said: “After the challenges faced in 2017, it is encouraging to see that brokers’ confidence is strong as we enter the New Year.

“I’m delighted that brokers see the demand for a growth in bridging finance in 2018 and the reasons are simple.

“Bridging loans provide a real-time solution to the funding gap that has developed as high street lenders come to terms with increased regulation. We can continue to expect to see a substantial rise in the demand for bridging finance throughout the rest of the year.”

The brokers surveyed said macroeconomic uncertainty will be the main challenge for UK financial services firms in 2018, while 28% cited the impact of Brexit negotiations, mtf research shows.

Some 13% said the level of market competition would be the biggest challenge. Only 6% of brokers thought regulation would prove a challenge.

Most (84%) brokers are preparing for a further rise in bridging finance volume in 2018, after 73% of those questioned reported an actual rise in bridging loan volumes in 2017.

However Shawbrook found brokers see lending restrictions, regulatory change and valuation issues as the biggest challenges their businesses.

Some 61% of brokers surveyed believe that their portfolio landlord clients are aware of the PRA rule changes but do not understand all the changes.

They said the knock on effect of the PRA/FCA regulations was likely to be the biggest issue facing their clients in 2018.

In addition, 59% of brokers surveyed believe that their HMO landlord clients are not aware of new licensing laws that may come into effect next Spring.

Source: Mortgage Introducer

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65% of brokers report bridging loan volume increase

Almost two-thirds of brokers (65%) have noticed an increase in bridging loan volume in Q3 2017, a rise on the 48% who reported growth during Q2 2017, according to recent research.

The latest broker sentiment survey conducted by bridging lender MTF has revealed that bridging finance continues to assist borrowers who are struggling to obtain loans from mainstream lenders which have introduced tougher lending restrictions.

The geographical spread of bridging loan demand has also expanded in the third quarter, and for the first time 9% of the 96 brokers surveyed highlighted an increase in demand in Scotland and Northern Ireland.

The South East witnessed the biggest demand for bridging loans in the UK (48%) for the fourth consecutive quarter, although this represented a decline from the 62% registered in Q2.

The second highest area for demand was London at 25%.

Funding development projects was the most popular reason for obtaining a bridging loan (30%) for the fourth consecutive quarter, followed by business purposes (17%).

Some 69% of brokers claimed the bridging loan process took longer than it did 12 months ago, while 45% said it took less than three weeks to complete such a loan.

Almost a fifth (18%) cited a duration period of just one to two weeks, while 55% said it took in excess of three weeks.

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: Bridging and Commercial