Bridging applications hit record levels and completions bounce back in Q3

Bridging applications hit their highest ever level in Q3 2020, and completions rose by more than 40% as the market bounced back from the impact of the first lockdown.

This is according to the latest figures compiled by auditors from data provided by members of the Association of Short-Term Lenders. 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 £680 million, which is an increase of 44.8% on Q2, although still down by 27.6% on the same period last year, reflecting the influence of the first national lockdown on the previous quarter’s originations activity.

Loan books showed a small increase of 0.6% on the previous quarter and 5% on the same period last year – remaining at around £4.5bn. While average LTVs increased slightly since Q2, but continue to remain at sub-60%

The value of loans in default showed a small increase of 3.3% over Q2 2020 but were 23.1% higher than the same period last year, as borrowers continued to feel the financial impact of the pandemic.

Vic Jannels, CEO of the ASTL says: “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.”

Published: 01 December 2020