A record number of bridging loans were taken out in the third quarter of this year, with both applications and completions showing strong growth over the period.
Figures from the Association of Short Term Lenders (ASTL) show that while the mortgage market as a whole remains subdued, the upward trend in seen in the bridging sector this year has continued. Members’ loan books grew by 2% from July to September this year, to total £7.3bn — a record figure. This is the second consecutive quarter ASTL members’ loan books have exceeded £7bn.
The ASTL says the figure is 18% higher than the size of bridging loan books ua year ago.
Applications rose to £9.7bn — an increase of 5.6% compared to the three months to June 2023. Completions were £1.4bn, an increase of 5.8% on the previous quarter.
Compared to the same period last year application volumes have risen by more than 8%, while companions have grown by almost 11%.
Figures show that average LTVs remained largely unchanged, at 57.7% of the property’s value, a marginal decrease from the 57.8% recorded in the previous quarter.
ASTL CEO Vic Jannels says: “Bridging lending has again bucked the trend of the wider market to record a period of strong growth in the third quarter of 2023.
“This growth can be attributed to several factors. The versatility of bridging finance is being recognised by a growing number of customers and brokers who are realising the vital role it has to play in financing a period of transition, particularly in an uncertain economic environment.”
He said the sector was becoming more professional and building a strong reputation for both customer service and a robust approach to risk management. “We still have work to do but there remains opportunity to grow the sector to its full potential, through greater education amongst customers.”
