Bridging applications reach record levels
Bridging applications reached the highest ever levels in Q3 2020, according to the Association of Short Term Lenders (ASTL).
In addition, completions rose by more than 40% as the market bounced back from the impact of the first lockdown.
The data shows that applications totalled £7.6bn in Q3 2020, representing an increase of 39.1% over the previous quarter and an increase of 25.7% on the same period in 2019.
Completions in Q3 2020 were noted at £680m, which is an increase of 44.8% on Q2, although still down by 27.6% on the same period last year.
Looking to loan books, there was a 0.6% rise quarter-on-quarter, and a 5% uplift annually, remaining at around £4.5bn.
Meanwhile average LTVs increased slightly since Q2, but continue to remain at sub-60%
Furthermore, the value of loans in default noted an increase of 3.3% on Q2 2020, but were up 23.1% on the same period last year.
Vic Jannels, CEO of the ASTL, said: “The Q3 lending figures from the ASTL reflect feedback from the market demonstrating that this has been a hugely busy period for bridging lending.
“Applications over the quarter totalled £7.6bn, which is the highest figure we have ever recorded.
“Completions also bounced back on the previous quarter, but remain down on last year as an overhang of the first national lockdown.
“We’re unlikely to see this overhang again as the market remained open during the second lockdown – but we must still remain cautious about the future, as the road ahead remains full of economic uncertainty.
“That said, if the recent positive news about vaccines come to fruition and lenders continue to underwrite loans sensibly, whilst taking a proactive and collaborative approach to customers in default, then there is no reason why this quarter’s figures should not prove a strong foundation for a robust and sustainable recovery.”