The bridging market showed strong performance in the third quarter, with faster completions and increased lending.
This is reflected in the latest figures from the Bridging Trends report, which show that lending volumes have increased and gross contributor lending is £220.8 million.
The data shows that lead times fell to 46 days in the third quarter of 2024, compared to 52 days in the second quarter. This is the fastest average turnaround time since the second quarter of 2019.
This is a positive sign pointing to an improvement in operational efficiency, accompanied by a 9% increase in total gross lending, with contributors recording an increase from £201.8 million in the second quarter of 2024 to £ 220.8 million in the third quarter of 2024, continuing the positive upward trend observed throughout the period. year and shows the resilience of the market during traditionally quieter periods.
The majority of bridging loans taken out in the third quarter were used to purchase investments – an increase from 18% in the second quarter to 24% in the third quarter. This increase indicates growing investor confidence in the market, despite the fact that the third quarter is the summer period.
Demand for regulated and non-regulated refinancing saw the largest increase, from 6 to 14% and 6 to 13% respectively. The decrease in the number of continuous loans indicates a more stable market with fewer disruptions.
Knowledge Bank data shows that regulated bridging continued to be the top search criteria for UK bridging finance brokers in the third quarter.
The share of first-line loans rose from 88.4% to 91% in the third quarter, while second-line loans fell from 11.6% to 8%.
The average Loan-to-Value also fell fractionally, from 59.3% in the second quarter to 56.8% this quarter. Elsewhere, the average term remained at twelve months for the twelfth consecutive quarter.
Commenting on the recent figures, Chris Oatway, CEO of LDN Finance, said:
“Over the past quarter we have seen a notable improvement in the bridge finance sector, with average turnaround times significantly reduced, indicating a more efficient market.”
He added: “Looking ahead to the fourth quarter of 2024, we expect continued momentum, with further growth in credit activity as confidence in the market strengthens. With economic pressures easing and a stable real estate environment in place, we expect more investors to turn to bridge financing to secure profitable opportunities, suggesting the market will continue to improve as we close out the year.”