The latest figures from ASTL indicate strong quarterly performance for the bridging sector in Q2 this year; up an impressive 23.2%, total completions for the three-month period came out at £1.1 billion.
The high number of completions during this period meant that bridging loan books increased to more than £4.7bn, up from £4.4bn in the first quarter.
Commenting on the figures, ASTL CEO Vic Jannels said the increase in completions was reflective of a significant reduction in completions during the first quarter of the year, with the market having subsequently corrected itself.
Despite the higher number of completions and growth in overall market value, bridging finance applications were down in Q2 compared to Q1. Total application volumes were down 1.7% to reach a total of £7.36 billion.
Compared to the same period last year, total bridging applications at the end of June were up approximately 27% from 2020.
The outlook is therefore seen as generally positive for the sector, with around 90% of lenders saying they expect their businesses to grow over the remainder of the year.
Bridging loan default value down
ASTL’s figures also suggest that the total value of bridging loans in default is still on the decline since the start of the year. Compared to Q1, the value of bridging loans in default was down 7.6% in Q2.
Consequently, repossessions were also down over the past three months compared to the start of the year, indicating that the gradual return to normality after 18 months spent in lockdown could be having a positive effect.
ASTL also reported that the average bridging loan LTV currently stands at fewer than 60%, a fractional increase on the figure reported in Q1.
“The falling value of loans in default and the number of repossessions reflect the quality of lending and show that the market is continuing to grow sustainably and enhance its ever-improving reputation,” commented Vic.
“In this growing market, ASTL lenders continue to represent a benchmark of quality and customer focus, providing brokers with a source of flexible short-term finance that they can trust.”