The short-term loans market confirmed “resilience” within the second quarter of this yr, with a progress in software volumes and a lower in rates of interest.
Application volumes lifted 11% to 460 from a yr in the past and up 2% on the primary three months of 2025, in line with the quarterly Bridging Trends report compiled by lender MT Finance.
The rise “indicated sustained market exercise and borrower confidence in bridging finance options,” the examine says.
Average month-to-month rate of interest for bridging loans fell 5 foundation factors to 0.81% within the second quarter from three months in the past.
The report provides: “This discount in borrowing prices could be immediately linked to the lower in base and swap charges and diminished weighted common LTV.
“The downward trajectory continued the development from the earlier yr, demonstrating the sector’s rising competitiveness and improved price of capital.”
However, complete gross lending slipped 1% to £199.7m within the interval, from each the earlier quarter and a yr in the past.
“This stability underscores the sector’s resilience and the constant demand for bridging finance throughout numerous market situations,” the examine provides.
The report famous “a big” rise in refinance exercise, with regulated refinance leaping by 76% to 81 purposes within the interval from the earlier three months.
Unregulated refinancing lifted 63% to 49 purposes within the second quarter from the primary three months of the yr.
“Regulated refinance now accounts for the biggest proportion of loans by goal at 18% within the second quarter, up from 10% within the first quarter of 2025,” the survey provides.
First cost loans made up 10% of loans within the second quarter, whereas second cost loans continued to dominate, accounting for 90% of the market.
The common loan-to-value remained constant at 54% and the typical mortgage time period stayed constant at roughly 12 months.
“The discount in rates of interest, mixed with constant software volumes, suggests a wholesome urge for food for bridging finance.
“We are additionally seeing a transparent shift in mortgage functions, with refinance and public sale purchases enjoying an more and more vital function.
“We count on continued sector stability and beneficial market situations all through 2025 as lenders proceed to enhance operational effectivity on all fronts.”
Impact Specialist Finance managing director Dale Jannels provides: “We’re seeing a number of new brokers inserting shoppers within the bridging market.
“Every day is a studying day, however now extra brokers are exploring and educating themselves on the numerous advantages that bridging can convey to their consumer banks.”
