Bridging demand increases despite longer completion times: mtf

48% of brokers experienced a rise in bridging loan volume in Q3, up from 38% in the second quarter, and just 17% saw no rise.

The South East saw the biggest demand for bridging loans in the UK, followed by London, while demand in the North West, South West and Scotland all declined compared to the previous quarter.

For the third consecutive quarter, funding development projects was the most popular reason for taking out a bridging loan at 31%. Business purposes was the second most popular reason at 21%, up from 16% in Q2.

However, two thirds (66%) of brokers said the bridging loan process is longer than it was 12 months ago, with the majority (48%) suggesting 3-4 weeks was the average length to complete a bridging loan.

61% of the 113 brokers surveyed blamed solicitors as the main reason for delays, followed by the valuer at 16%.

Gareth Lewis, commercial director at mtf, commented: “The bridging finance industry is in promising shape and demand continues to grow, particularly from property investors looking to fund development projects in London and the South East.

“However, speed has always been a vital element in bridging finance and it is essential we don't lose sight of this. It is important that all parties involved - the lender, lawyer, valuer and the broker, move swiftly to complete to the borrower's schedule.

“It is important we stay true to the fundamentals of bridging: providing borrowers with fast access to the capital they need in a responsible and sustainable way and not fall in to the more traditional computer banking model.”