According to recent figures from the CML, the number of top-LTV products available on the high street fell by 43% in the six months to August.
Having eased off slightly at the start of the year, credit conditions have worsened. What’s worse, high street lenders aren’t just experiencing renewed shortage of credit, but have become risk-averse. They lack the capacity to help all but the most credit-worthy of borrowers.
Bridging LTVs fell slightly, too. The latest West One Bridging Index shows an average LTV of 48%, down three percentage points on Q1. But year on year, bridging LTVs are up 2% – this reflects an especially good start to the year, rather than a particularly bad Q2.
A lower LTV means less risk for investors, which only serves to encourage the steady expansion of the bridging industry. Having said that, bridgers who work on a more peer-to-peer lending model like we do are less afraid of doing business in the first place. We don’t rely on the money markets like banks do. At West One, we have a pool of 180 high net worth individuals, who fund our loans. This means we don’t rely on only one funding line.
When traditional business is sparse, the success of bridging is good for brokers, too. This is clearest in our recent figures on buy-to-let bridging. The West One Broker Sentiment Survey found 98% of brokers reported growth in BTL bridging over the last six months, up from an already very encouraging 73% in February.
This latest data on LTVs only highlights further the advantages of bridging over bank-based lending.
