Annual gross bridging lending increased by 56% during the first three months of 2016, according to the latest Bridging Trends data.

Data from Bridging Trends confirmed another strong quarter for bridging volumes, with contributor lending reaching £125.35 million in the first quarter of 2016 – an annual increase of 56% (£80.47 million), and a 3.4% increase on Q4 2015 (£121.21 million).

Bridging Trends is a quarterly publication conducted by bridging lender MTF, and specialist finance brokers Brightstar Financial, Enness Private Clients, Positive Lending, and SPF, to monitor the general trends in bridging finance.

Unregulated bridging loans continued to outperform regulated bridging loans, though the number of regulated loans transacted by contributors increased from 35.9% in Q4 2015, to 42.5% in Q1 2016.

For the fourth consecutive quarter, mortgage delays were the most popular reason for accessing a bridging loan, at 42% of all lending in Q1 2016, dropping slightly from 44% during Q4 2015. Refurbishment was the second most popular reason for getting a bridging loan, contributing to 21% of all lending.

First charge lending remained solid, while second legal charge lending for the quarter rose to 17.5%, from 9.56% during Q4 2015.

Average LTV levels climbed from 49.9% in Q4 2015, to 52.8% in Q1 2016, and average monthly interest rates hit 0.89%, an increase of 0.02% on the previous quarter.

The average completion time on a bridging loan application decreased by four days and for the third consecutive quarter, the average term of a bridging loan remained at 10 months.

Joshua Elash, director of bridging finance lender MTF, said: “It is positive to see an increase in the gross lending volumes and although there has been upward movement on both the weighted average interest rates and LTVs, both continue to suggest that the market is healthy for consumers and is behaving responsibly.”

Kit Thompson, director of Bridging Loans at Brightstar, added: “Once again the biggest reason for someone taking out a bridging loan is because of delays with their long term mortgage. This is shocking and causes unnecessary costs for borrowers.

“It is always a surprise to me that a mainstream mortgage takes such a long time to complete given that so much of the process is now automated at so many lenders, whereas a bridging loan which is underwritten individually on a case by case basis can be completed in under 40 days.

“While it is full credit to the bridging industry that they can rise to the challenge to ensure that people do not lose the opportunity to buy their new home, it is surely time that mainstream mortgage lenders did likewise.”