Marijana No Comments

Bridging market showing encouraging signs of activity

The bridging market is showing encouraging signs of activity as investors look to add value or yield, according to the latest Bridging Market Bulletin from Shawbrook Bank.

The bulletin delivers a snapshot of the latest trends and outlook for the UK bridging finance market.

This optimistic picture is reinforced by recent state of the market data from the ASTL which showed bridging applications hit their highest ever level in Q3 2020, and completions rose by more than 40% as the market bounced back following the first lockdown.

In an analysis of the market, Shawbrook observed the trends driving demand which included a buoyant auction market, an uptick in heavy refurbishment projects and investors capitalising on the stamp duty holiday.

Emma Cox, sales director at Shawbrook Bank, said: “It’s been a difficult time for the property market, and of course the current landscape has left many facing challenges – especially within the bridging space, where some lenders had to halt business in this area for a period of time during the height of the pandemic.

“It is positive to see many of these lenders recently return to market, and as our report shows, to see that the housing market is moving again.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

“Whilst some of this activity in the bridging market will no doubt be down to the releasing of pent up demand – something that Rishi Sunak’s stamp-duty holiday will support further – we are also seeing an uptick in investors looking at alternative strategies to sure up investments.

“The use of bridging to carry out refurbishments and conversions, as well as to aid chain breaks due to elongated sales processes, is an essential funding option that can support lucrative investment opportunities.

“We recently announced revised pricing across our bridging range, with rates now starting at 0.5% for both regulated and unregulated products, in order to show our continued appetite to aid brokers in making the most of these opportunities.

“The bridging market has demonstrated remarkable resilience throughout this year and, as much as we may face more challenges towards the end of 2020 and into the early parts of 2021, we believe this adversity may create opportunities for investors, and brokers, which Shawbrook plans to continue to support as much as possible”.

By Jessica Nangle

Source: SFI

Discover our Mortgage Broker services.

Marijana No Comments

ASTL: Bridging applications leap to record levels in Q3

Activity in the bridging market reached record levels in Q3 with completions rising by over 40% and applications hitting an all-time high, the Association of Short-Term Lenders (ASTL) has revealed.

The latest figures from its members show applications totalled £7.6 billion in Q3 2020, representing an increase of 39.1% over the previous quarter and an increase of 25.7% on the same period in 2019.

Completions in Q3 2020 were £680 million, which was an increase of 44.8% on Q2, although still down by 27.6% on the same period last year. This reflected the influence of the first national lockdown on the previous quarter’s originations activity, the ASTL said.

Loan books showed a small increase of 0.6% on the previous quarter and 5% on the same period last year – remaining at around £4.5 billion. While average LTVs increased slightly since Q2, but continue to remain at sub-60%

The value of loans in default showed a small increase of 3.3% over Q2 2020 but were 23.1% higher than the same period last year, as borrowers continued to feel the financial impact of the pandemic.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

Vic Jannels, CEO of the ASTL says: “The Q3 lending figures from the ASTL reflect feedback from the market demonstrating that this has been a hugely busy period for bridging lending.

“Applications over the quarter totalled £7.6 billion, which is the highest figure we have ever recorded. Completions also bounced back on the previous quarter but remain down on last year as an overhang of the first national lockdown.

“We’re unlikely to see this overhang again as the market remained open during the second lockdown – but we must still remain cautious about the future, as the road ahead remains full of economic uncertainty.

“That said, if the recent positive news about vaccines come to fruition and lenders continue to underwrite loans sensibly, whilst taking a proactive and collaborative approach to customers in default, then there is no reason why this quarter’s figures should not prove a strong foundation for a robust and sustainable recovery.”

Source: Mortgage Finance Gazette

Discover our Mortgage Broker services.