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Bridging sees post-Brexit confidence bounce – ASTL

by: Carmen Reichman
  • 20/09/2016
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Bridging sees post-Brexit confidence bounce – ASTL
Sentiment amongst bridging lenders has bounced back “considerably” since the Brexit referendum in June, the Association of Short Term Lenders (ASTL) has said.

ASTL’s latest member survey, conducted in August, showed 30% were positive about the long term future for the UK economy. In contrast, two months earlier, in the week following the UK’s vote to leave the EU on 23 June, a mere 6% of respondents said they had a positive outlook.

While negative sentiment still presided with 33% of ASTL members, this was just half the number of people who said they were not confident about the economy in June.

Overall 24% of lenders are more confident now than immediately after the referendum result, while an additional 10% have changed from negative to neutral, the organisation said.

However, back in April, following Chancellor George Osborne’s last Budget, as many as 81% said they felt confident or neutral about economic prospects.

Chief executive Benson Hersch said: “Optimists will take heart from these results as there has been a definite positive swing in the feelings of bridging lenders, reflected by a jump in the ASTL positivity index.

“Today’s results show more of a sense of normality and highlight the sense of shock that was rippling through the industry in the days immediately following the referendum result.”

Bridging lenders were also confident about prospects for their own businesses, with 71% telling the trade body they felt their business volumes would grow over the next six months, up from 31% in June.

ASTL bridging figures for Q2 – the pre-Brexit months to the end of June – showed bridging completions up 19% on Q2 2015, while loan applications increased 61%, and loans written in the year reached £2.85bn, an increase of 17%.

“While only a few days of this was in the post Brexit period it clearly displays that the bridging industry is in a strong place at the moment,” Hersch said.

However, ASTL’s survey painted a slightly more troublesome picture for the bridging industry as a whole. About 45% of respondents said the bridging market would grow over the next six months, while 55% thought it would shrink or stay the same.

Looking at the wider market, nobody thought house prices were going to rise over the next six months. A significant 43% however, felt house prices would drop, although this was lower than the 68% who thought this in June.

Hersch said: “It is clear that despite a bounce, many respondents are still sitting on the fence, uncertain as to which way the wind may yet blow.”

ASTL has 36 full members and 25 associate members from the short term lending community. The organisation is due to hold its annual conference entitled ‘Lending in an Uncertain World’ in London on 22 September.

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