The Intermediary – November 2025 - Flipbook - Page 89
SPECIALIST FINANCE
Opinion
Investment assets
fuel demand for
bridging finance
T
he Autumn Budget
has long been casting
its shadow over the
financial services sector.
Since the Chancellor
confirmed November’s
date in early September, speculation
has swirled around what it will mean
for borrowers and the property sector.
With the release of Q3’s Bridging
Trends data, we are now seeing the
impact of this.
Investing in property
The latest figures demonstrate
how specialist finance remains a
powerful tool, particularly in times
of uncertainty. What instantly
caught my aention was the fact that
contributors transacted £209.4m in
bridging loans in Q3 – a 4.9% increase
on Q2’s £199.7m. Interestingly, this is
the highest quarterly figure since Q3
2024’s £220.8m as many borrowers
turn to lenders who prioritise speed
and flexibility.
This ability to move quickly has
been key as rumours around the
increase of Stamp Duty persist.
Considering this, I wasn’t surprised
that funding an investment purchase
was the most popular use of bridging
finance in Q3, accounting for 20%
of all transactions and up from
16% in Q2.
Loans which focused on speed also
had a positive impact on the average
completion time, which fell from 48
days in Q2 to 41 days in Q3. Not only
is this great news for borrowers, but
it also highlights how well lenders
and their intermediary partners are
collaborating to achieve the best – and
quickest – possible outcomes.
Aside from pre-Budget jiers, we
have also been feeling the effects of a
somewhat sticky property market.
As buyers retain the upper hand, the
number of re-bridges jumped in Q3,
rising from 7% in Q2 to 12% in Q3.
This suggests that those with a
resale exit strategy are finding it
harder to redeem their bridging loans
within their term. It could also be
why the average monthly interest rate
increased from 0.81% in Q2 to 0.85%
in Q3. It’s worth pointing out that this
is still lower than Q1’s 0.86% and Q4
2024’s 0.87%.
Refinance fluctuations
Another area which experienced
fluctuations was refinance. Regulated
refinance bridging loans fell from
18%in Q2 to 12% in Q3, while
unregulated refinance dipped from
11% in Q2 to 6% in Q3.
As interest rates have been relatively
stable over the past year, it seems
likely that a lot of refinances took
place earlier in the year and borrowers
are now either in fixed terms or are
waiting to see what’s going to happen
to the base rate.
The Monetary Policy Commiee
held the base rate at 4.00% in
November – albeit by a slim majority.
This, coupled with the fact that
unemployment hit 5% between July
and September, means that we could
still see a base rate drop before the end
of the year. I expect many borrowers
are being on this.
Despite the rise in investment
purchases, the proportion of
unregulated bridging loans fell very
slightly from 55% in Q2 to 54% in Q3.
This demand for regulated bridging
was also reflected in data provided
by Knowledge Bank, which revealed
that ‘regulated bridging’ was the top
criteria search made by UK bridging
finance brokers in Q3.
I was encouraged to
see that the average
loan-to-value
RAPHAEL BENGGIO
is bridging director
at MT Finance
Aside from preBudget jitters, we have
also been feeling the
effects of a somewhat
sticky property market”
(LTV) only rose marginally, from
54% in Q2 to 55% in Q3, showing
that borrowers continue to borrow
within their means. The percentage of
second charge bridging loans also rose
slightly in Q3, from 10% in Q2 to 12%,
but I don’t think this represents much
cause for concern. Finally, the average
term stayed static at 12 months.
Overall, the main takeaway from
the Q3 data is that bridging remains
an important resource for borrowers
looking for specialist finance. It’s great
to see how lenders are servicing clients
quickly, and I hope this momentum
can be maintained going into Q4. ●
