86% of brokers surveyed saw an increase in bridging loan volume during the fourth quarter of 2015, up from 76% in the previous quarter as more borrowers struggled to get mortgages from banks, according to MTF’s quarterly broker sentiment survey.
91% of the 181 brokers surveyed were unable to source mortgages for some of their clients in the fourth quarter, with almost half attributing affordability as the main barrier.
The survey found that 61% of brokers turned to bridging finance as an alternative source of funding in a bid to fill a liquidity shortfall, compared to 26% that opted for secured loans.
Aside from affordability, 27% of brokers said they were unable to get mortgages for clients with poor credit history and 18% blamed property downvalue.
The south-east saw the biggest demand for bridging loans in the UK during Q4 2015 at 50%, followed by London, which grew to 33% in the fourth quarter, up from 28% during the third quarter of 2015.
Bridging finance was seen a useful financial tool by 100% of brokers surveyed during the fourth quarter, up from 93% in the third quarter and 77% during the second quarter, showing its growing prominence as a loan product.
Tomer Aboody, director of MTF, said: “Bridging finance is plugging a funding gap as borrowers find it more difficult to obtain loans from mainstream lenders implementing tougher affordability restrictions.
“At MTF one of our defining characteristics is that we are non-status lenders. We don’t require evidence of trading history, accounts or proof of income. Instead we focus on the property and the client’s future plans. This allows us to take a practical, common sense approach to lending.”