Bridging loans exceed GBP 2 billion this year

The figures from the Association of Short Term Lenders for Q3 2014 have shown record levels of bridging finance, and loans written by members of the ASTL in the year ended September 2014 have now exceeded £2 billion.

The ASTL’s latest quarterly figures on the size of the bridging market reveals that in Q3 this year, the value of the overall loan book increased by 49.8 per cent compared to the same quarter in 2013 and by 15.3 per cent compared to Q2 this year.

The number of loans written increased by 18.2 per cent in the quarter ending September 2014 compared to Q2 (ending in June 2014) and by 7 per cent for the year ending September 2014, compared to the year ended September 2013.

There has been an 11.6 per cent increase in the value of applications for bridging loans in Q3 2014 compared to Q2 2014. This reverses the trend in the previous quarter where there was a 19 per cent decrease, but is still less than the spectacular figures for Q1 2014 where the value of applications increased by 83 per cent quarter on quarter. The value of applications does tend to be volatile on a quarter by quarter basis but the long-term trend continues to be positive.

Benson Hersch, chief executive of the ASTL, says: “This was yet another bumper quarter for our members, who have written £1.98 billion worth of loans in the past year.

“Bridging continues to play an important role in the alternative finance market, and our members provide a responsible and reliable service for both SMEs and homeowners. Members are positive about the prospects for the current quarter and the year ahead.”

ASTL members include most of the key lenders in the bridging market, and hence their data can be seen as an accurate estimate of the total bridging finance market.

Bridging finance has become significantly more mainstream over the last 2-3 years, with the most prominent bridging loan lenders being backed by leading financial institutions across asset management, private equity, and hedge funds. As a result, interest rates have fallen dramatically, and bridging loans are now seen as an important part of the lending market for property developers. If you would like to receive more information about bridging loans, please email or call 0207 206 2500