Bridging growth trends slow in September

The Association of Short Term Lenders' latest quarterly figures show that although bridging lending is continuing to grow, the rate of that growth has slowed quite significantly over the last year, potentially as a result of criteria relaxing in the mainstream market and bridging lender becoming a little stricter.

Related topics:  Commercial,  Commercial finance
Amy Loddington
26th November 2015
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According to the new figures submitted by ASTL members, the amount of loans written in September 2015 saw an increase of just 2.7%, compared to an increase of 12.3% in September 2014.

Similarly, the total loan book for the quarter ending September 2015 stood at £2.41 billion, an increase of just 0.8% over the quarter ending June of this year.  This compares to September 2014 where the loan book total was £1.98 billion; which was a 15.3% rise over the June 2014 quarter.

The number of applications this quarter remains consistent however, with a promising quarter-on-quarter increase of 17.1% compared to a rise of 11.6% a year ago, suggesting that demand for bridging loans is strong but that lenders are not completing on the loans.

Benson Hersch, chief executive of the ASTL says:

“The figures released today are significant.  The application figures reflect the continued appetite for bridging loans.  Short term loans continue to be seen as a valued source of finance and are still very much in demand.

“The amount of applications and completions have both continued on an upward trajectory since September 2011 but, despite this, the rate of growth of bridging loan completions is slowing.  Part of the reason could be that with more new lenders entering the market and increased availability of funds to existing lenders, brokers are shopping around so that in fact there aren’t more cases, but each case is being offered to several lenders.

“Although there has been a slowdown in the rate of completions, the demand for bridging finance is up and competition in the bridging sector is strong, however I do not expect to see runaway growth, but a sensible and steady expansion of the sector.”

These figures are taken from the responses from ASTL members, which include most of the key lenders in the bridging market.

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