Demand for bridging loans increased in the third quarter of 2018, according to bridging lender mtf.
Its latest Broker Sentiment Survey found that almost half (48%) of brokers experienced a rise in bridging loan volume, up from 38% in the second quarter of 2018.
Just 17% of the 113 brokers surveyed did not experience a rise in bridging loan volume in Q3 2018.
The results show the geographical spread of bridging loan demand narrowed in the same time period, with demand in the North West, South West and Scotland dropping from the previous quarter.
The biggest demand for bridging loans in the UK was recorded in the South East with 48%, up from 30% in Q2 2018. London followed closely behind at 41%.
Funding development projects was the most popular reason for taking out a bridging loan for the third consecutive quarter at 31%, with business purposes being the second most popular reason at 21% - up from 16% in Q2 2018.
However, 66% of brokers said the bridging loan process is longer than it was 12 months ago. Some 48% suggested that 3-4 weeks was the average length to complete a bridging loan, compared with 21% who indicated that bridging loan cases generally took 2-3 weeks to complete.
When it came to the main reason for delays, 61% blamed solicitors, followed by the valuer at 16%.
“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,” said Gareth Lewis, commercial director of mtf.
He said that as speed has always been a vital element in bridging finance, all parties involved in the process – the lender, lawyer, valuer and broker – should 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 into the more traditional computer banking model.”