A new survey reveals that despite a fall in value of bridging loans written in the third quarter, the overall amount written during 2016 is so far significantly higher than last year.
The results from a survey carried out by the Association of Short Term Lenders (ASTL) reveal that the value of loans written in Q3, ending 30th September, were down by 4% when compared to Q3 2015. The figures also show a 17.4% drop on Q2 this year.
However, the total value of loans written by ASTL members, for the year ended 30th September, has risen by 15% when compared to the year before.
This is said to be a positive indication as to how 2016 will fare overall, although experts have said that figures are unlikely to reach original predictions.
A decline in the value of applications was also recorded quarter on quarter, but this follows an unusually steep increase of 61.5% in the previous quarter.
Figures for bridging loan applications tend to be prone to dramatic fluctuations, due to the fact that borrowers often shop around, submitting applications to more than one lender.
Therefore, the value of applications is generally not hugely indicative of the value of completions.
Benson Hersch, chief executive of the ASTL said:
“This was the first full quarter after the referendum. Brexit blues, increased stamp duties and impending tax changes all seem to have had an effect. My doubts regarding the record level of applications in the June quarter being reflected in completions in the September quarter proved correct and I predict the same for the forthcoming quarter.
“Bridging figures have been on something of a rollercoaster ride over the past year, having alternatively risen and then dropped, however the size of the total loan book is still well up on the previous year.
“Anecdotal feedback from members in respect of Q4 remains positive, but whilst many are positive about their firm’s performance, the market is definitely showing signs of becoming more difficult. I therefore think that we will end the year well up on last year’s total of £2.4 billion loans written, but we are unlikely to make the £3billion that many were predicting last year.”
You mkay also be interested in: