Lenders expect bridging surge as sector could ‘grow substantially’

The Association of Short Term Lenders (ASTL) noted that if this forecast turned into reality, “then in turn the whole bridging sector will grow substantially”.

The survey results echoed sentiments from lender West One Loans and brokers about the potential growth in the sector. The government’s intervention in the market could  prove a boost, with 48% of members believing Budget measures could have a significant impact, but they remained sceptical until it delivered.

However, other factors such as nationwide property trends and the impending changes to energy performance certificate rules mean landlords and developers may be in search of more finance.

According to the latest sentiment survey from the ASTL, overall positivity in the UK economy from bridging lenders has also risen significantly while the worry surrounding the outcome of Brexit negotiations has eased.

Lenders were particularly positive about the outlook for their own businesses, with 75% believing volumes will grow over the next six months while none expected business to fall off.

Half of members expected growth in the sector to increase, a significant rise from the post Brexit results in 2016 when just 19% of lenders forecast growth.

Additionally, 50% predicted an increase in competition in the sector, the lowest figure seen since November 2016.

Government intervention

Brexit concerns were still significant for 46% of lenders, although this was significantly lower than the 64% in June. And 29% said they were not worried about the outcome, up from 21% in June.

ASTL CEO Benson Hersch said: “While there is of course still some caution around Brexit, lenders’ confidence for their businesses and the UK economy continues to grow significantly.

“In addition, the measures announced in the Budget are likely to have a positive impact on the housing market, although it remains to be seen whether they will actually be implemented in 2018. “We hope to see this positive attitude and potential growth in the sector remaining high while worry over political uncertainty and its impact continues to decline,” he added.