Bridging completions fell in 2020 but applications increased

Bridging completions were £2.88bn in 2020, down from £3.99bn in 2019, but applications grew by more than 11% on the previous year.

This is according to the latest figures compiled by auditors from data provided by members of the Association of Short-Term Lenders.  The data shows that completions in 2020 fell by 27.9% on 2019 and that bridging loan books dropped to £4.48bn, a decrease of 2.5% on the previous year. The value of applications in 2020 increased to £25.82bn, up from £23.19bn in 2019.

The data shows that the surge in applications in Q3 last year went on to drive a 34.9% increase in completions in Q4 – there were £918m of completions during the quarter. Applications in Q4 2020 were at £6.69bn, down by 12.7% on Q3, but they were still up by 22.9% on the same quarter in 2019. Average LTVs fell slightly in Q4 and have now dropped to below 59%.

The value of loans in default in Q4 2020 increased by 13.9% on Q3 and was 23.8% higher than the same period the previous year as borrowers continued to feel the financial impact of the pandemic.

Vic Jannels, CEO of the ASTL says: “The Q4 lending figures give us an opportunity to review the performance of 2020 as a whole. Completions were down on the previous year, which is to be expected given the periods of national lockdown. However, applications were actually higher than in 2019, which reflects the enormous potential the bridging market has to provide customers with a funding solution through these difficult times.

“We must, however, remain cautious. The effects of economic slowdown are starting to be reflected by the value of loans in default and, while the roll out of the vaccine for Covid-19 continues at pace, a return to normal levels of economic activity seems unlikely before the summer, so these trends may persist for several months.”