New data reveals that the value of bridging loans written in the fourth quarter was up by 26%, overshooting even the most optimistic predictions from lenders.
The report published by the Association of Short Term Lenders (ASTL) found that growth over the year as a whole was less extreme, with the value of loans written in 2016 rising 9.4% compared to 2015.
The press release noted that, lending in the year still fell shy of the elusive £3billion, finishing the year at £2.83billion, up from £2.59billion last year; although the overall loan book at the end of 2016 increased by 29.7% compared to the end of 2016 to reach £3.3billion.
The value of applications were up by 27.5% quarter-on-quarter, compared to a fall of 3% in the third quarter and a fall of 14% quarter-on-quarter in Q4 2015. The figure recorded in Q4 2016 represents a striking increase of 71% on that of Q4 2015.
Over 2015, although applications for the year increased 34%, the value of loans written rose by only 9.4%. This disparity has been explained by the fact that not all applications reach completion and that brokers often submit applications to several lenders at one time.
Benson Hersch, CEO of the ASTL, said:
“After a dip in volumes almost across the board in Q3 last year following the referendum, the size of the increase both in the quarter and across the year has overshot even my most optimistic expectations. I do expect volumes to rise again in the first quarter of this year, however I expect the percentage increase to be lower compared to Q4, as this quarter’s figures very much contrast with the Brexit blues that affected people looking for bridging loans between July and September last year.
“While lending by ASTL members didn’t quite hit £3billion, there are a number of bridging loans that fall under the radar, made by lenders that many people do not know exist, as well as those lenders who are not members, so the actual size of the bridging market is far larger.”