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Bridging lender sentiment plummets following Brexit vote

by: Fiona Nicolson
  • 12/07/2016
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Bridging lender sentiment plummets following Brexit vote
Confidence among bridging lenders dropped significantly in the week following the EU referendum, according to an industry survey.

The survey by the Association of Short Term Lenders (ASTL) revealed that only 24% of those polled felt more positive about the long-term future of the UK economy since the vote, compared to 38% immediately after April’s budget.  More than two thirds said they were not confident about the prospects of the UK economy in the short term: double the number taking this view in April.

Sentiment was more positive about business growth with 75% of lenders expecting business to either increase or stay the same in the next six months, but they were less upbeat about the growth of the bridging market as a whole.  In April, 71% thought that the total bridging market would grow over the next year, but this sank to only 20% following the vote.

Benson Hersch, ASTL chief executive said: “It is clear that there was a general sense of shock immediately following the referendum which led to some dramatic results in the sentiment survey, but this negativity has now been tempered in many quarters.”

Hersch also said that several member lenders were now expressing the view that the market was experiencing a correction which would have happened anyway.

He said on potential action by high street lenders, adding: “I’ve heard that some banks are considering withdrawing funding, and are just treading water at the moment.

“It might be a worry for some lenders, particularly those who are fairly new to lending, because they are reliant on bank funding.  However, most of our members are well-established and have a wide range of funding lines,” he concluded.

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