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|Bridging applications increase by 61% to £3.5bn|
|Thursday, 11 August 2016|
Demand for bridging loans in the quarter ended 30 June 2016 defied expectation, with the value of applications for bridging loans increasing by a remarkable 61.5% quarter-on-quarter. The quarterly data survey was completed by members of the Association of Short Term Lenders (ASTL) which represents 36 bridging and short term lenders.
The value of applications in the June quarter, totalled £3.5bn which even eclipsed the usually frenetic December quarter. This shows that, despite what is happening in the mainstream market, there was little or no slowdown in the bridging and short term lending market in the pre-vote period. This should translate into healthy completions in the post-referendum period which will be revealed in next quarter’s statistics.
The value of loans written increased by 6% quarter-on-quarter, while the total value of members’ loan books increased by 39% over Q1 this year.
ASTL members wrote £2.85bn of bridging loans in the year ended 30 June 2016. This is an increase of 17% compared to the year ended 30 June 2015. Over the year there was an increase in the value of applications by a staggering 23%, although some of this can be ascribed to more “shopping around” by intermediaries.
Benson Hersch, chief executive of the ASTL says, “Bridging finance shrugged off pre-referendum doubts with a brilliant performance in Q2 2016. Members are cautiously positive about their firms’ business prospects, but very concerned about the economy as a whole. There is a strange mixture of positives and negatives in the press, with negatives by and large predominating. The Bank of England’s actions last week show that they feel that the economy requires stimulus, although some commentators are sceptical about the effects of these actions.”
“In my opinion the need for bridging finance is likely to continue to grow, especially if other finance providers tighten criteria.” These figures are taken from the responses from the ASTL’s members, which include most of the key lenders in the bridging market.
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