The value of bridging loans written by members increased 26% in the final quarter of the year, compared to the quarter ending September 2016. The ASTL attributed some of this to Brexit bounce back.
Across 2016, the ASTL said growth was more modest, with the value of loans written 9.4% higher than in 2015. Total lending for the year rose to £2.83bn from £2.59bn. However, the overall loan book increased by 29.7% on 2015, reaching £3.3bn.
The value of applications increased 27.5% quarter-on-quarter, compared to a fall of 5% the previous quarter and a fall of 14% in Q4 2015. The improvement translates to an increase in value of applications of 71% compared to Q4 2015.
However, while applications for the year increased 34% over 2015, the value of loans written increased by just 9.4%. The ASTL said this indicates that not all applications reach completion, and that brokers tend to submit applications to several lenders at a time.
Benson Hersch (pictured), ASTL chief executive, said: “After a dip in volumes almost across the board in Q3 last year following the referendum, the size of the increase both in the quarter and across the year has overshot even my most optimistic expectations.
“I do expect volumes to rise again in the first quarter of this year, however, I expect the percentage increase to be lower compared to Q4, as this quarter’s figures very much contrast with the Brexit blues that affected people looking for bridging loans between July and September last year.”
He added that the market is larger than the figures indicate. “While lending by ASTL members didn’t quite hit £3bn, there are a number of bridging loans that fall under the radar, made by lenders that many people do not know exist, as well as those lenders who are not members.”