In the last 12 months, it has been reported by the Association of Shirt Term Lending (ASTL) that the bridging loans industry has collectively lent a whopping £3.98bn.
This figure is 21% over the last year. However, the second has seen a slight contraction in the third quarter of 2018 compared the three months preceding that. The value of the loans written and applicants were down 0.6% and 3.3% respectively.
When you compare this to the same quarter of last years, the value of loans written in the quarter increased by 12.6%. Speaking in annual terms, applications were also up by 8.9% compared to the year which ended in September of 2017 – this totals up to £20.5bn.
It was noted by the ASTL that although applications did tend to be unreliable indicators and were dependent on how many lenders were offered the same deals, it did actually highlight how large the sector had become.
Loan books up
If you total up the loan book value, it appears to have continued to climb with a rise of 2.1% compared to Q2 and an increase of 16.6% at the same point, but last year.
The CEO of ASTL, Benson Hersch, said Figures for Q3 2018 show an ongoing year-on-year upward trend. Our members continue to provide flexible and useful services to customers who require finance for a whole range of purposes. Despite current political and economic uncertainties, lenders are very much doing business as usual.”
What is a bridging loan?
Bridging Loans are short-term loans which are designed to ‘bridge’ the gap found between a debt coming due and the main line of credit becoming available. In addition, they can also be used to simply act as a more general short-term loan in certain, pressing circumstances.
Bridging loans may be invaluable in helping an individual to make a property purchase that they would other not be able to be possible. For example, if someone cannot get a mortgage in place and they need to purchase the property now, a bridging loan would help to facilitate this.
The loans are essentially designed to help people complete a purchase of a property before they sell their existing home by offering the people access in the short-term to money at a high rate of interest.
Some people have started viewing bridging loans as a simple alternative to mainstream lending. While a bridging loan may sound like a tempting option in this capacity, before you take one out you should think about your strategy. If you are treating bridging loans in a traditional way, this might be, for example, getting a mainstream mortgage or a buy to let mortgage, or selling the property altogether.
Who are bridging loans aimed at?
Typically, bridging loans London and UK are aimed at landlords and amateur property developers. This includes those who are purchasing at auction where a mortgage is needed quickly.
They are often aimed at wealthy or asset-rich borrowers who want a straightforward lending method for residential properties.
Who are Octagon Capital?
Here at Octagon Capital, we are a licensed broker which aims to help you to compare bridging loans in the UK. These loans can range from £50,000 to £25 million.
In terms of your application, we have partnered with SPF Short Term Finance, a team of bridging loan brokers, in order to process any application you submit. You can apply online and an advisor from the SPF Short Term Finance team will be directly in touch with you shortly about the status of your application. If you please, you can call us for a quote today on 0333 414 1491. We are open Monday-Friday from 9am to 6pm.
