Regulated Bridge Loan Completion Times Are Slowing Down

There are many factors that are at play when it comes to the successful completion of a loan. A client needs to know what type of loan they are taking out and feel secure in the knowledge that they will be able to pay it back. They need to be able to want that loan in the first place as a source of capital for a project or investment worthy of taking out a loan. They need to be sure that the loan in question is the best possible financial option for their needs. And, of course, they need to be able to actually get the loan in time for it to be of use to them.

That last criteria may seem obvious, and yet, it is an altogether too common refrain among those taking out loans that the process can take too long. While it is important that any lending process be carefully scrutinized by the lending party, it also needs to be undertaken with an eye towards completing it in a timely fashion, so as to allow the borrowing party to get the funds when they need them.

It is thus a source of concern for some that the average time to complete regulated bridge loans rose over the course of 2018 from 43 days to 46 days.

Why Is This Happening?

There are several potential reasons that this may be happening, not the least of which being:

  • Changes within the logistics of the industry itself which have resulted in slowdowns
  • Changes to the manner in which these loans are approved
  • Concerns over Brexit causing consumers to be more wary of taking out a loan

Reasons for Taking out a Loan

There reasons for taking out regulated bridge loans, meanwhile, have remained constant. Refurbishing one’s home has long been the top reason that this type of loan is pursued, and that remains the case today. Mortgage delays likewise remain the second-most popular reason for pursuing a bridging loan, with that accounting for 19% of loans. Even so, that figure is down by as much as 20% in Q2 of 2018.

The Brexit Effect

As noted above, this may be due in part to concerns over Brexit. It looms large over much of the finance industry. With radical changes possibly in the offing to the status of the UK’s economic relationship with the EU, its access to the Common Market, and its overall standing in the world, consumers are naturally wary of making large financial decisions in such an uncertain market.

Even so, regulated bridging loans remain an attractive option for borrowers. This is due in no small part to the fact that interest rates for this type of loan have dipped of late, sitting around 0.78% to 0.8% at present. What’s more, the short-term nature of this loan remains attractive to many borrowers.

Ultimately, while there is certainly a slowdown occurring at present, regulated bridge loans figure to have a bright future once the dust from Brexit has finally settled.

Leave a Reply

Your email address will not be published. Required fields are marked *