Finance

Predicting the Future of Regulated Bridges Lending as It Continues to Decreases

What Is Regulated Bridge Lending?

Regulated bridge lending refers to a type of loan which is typically short-term in nature, property-backed, and secured against the property of the borrowing party. There are many possible permutations to this, but these three aspects are the main points.

Reasons for Obtaining a Regulated Bridge Loan

There are several reasons which are speculated to have been responsible for the recent decline of this form of lending, not the least of which being the rise of other forms of loans. Legal charge lending has gained by as much as 84% throughout Q3 of 2018. By comparison, second charge loans have decreased in that time by as much as 16%.

Adding Value

The most popular reason to seek out a bridging loan has long been refurbishment of one’s home. Even with changes to the industry as a whole, that particular trend has remained strong. The past few quarters have seen refurbishment remain the #1 cause of individuals seeing out a regulated bridge loan. While the precise cause and nature of those refurbishment projects naturally vary, the fact that this trend has remained strong despite the other changes in the industry is noteworthy.

Declining Interest Rates

Finally, it’s worth noting that the interest rates for regulated bridge loans have dropped to around 0.5% in this time frame. Likewise, the amount of time taken to complete an application for a regulated bridge loan has jumped to around 46 days.

One possible explanation for this slowdown in regulated bridge lending? Brexit. Industry experts have speculated that consumers may be waiting to see how Brexit ultimately sorts itself out before committing to financial moves as significant as a regulated bridge loan.

And when it comes to Brexit, as with regulated loans and all speculations about the future, “to look into the seeds of time and know which will grow and which.