Vic Jannels

Value of bridging loans in default in Q4 2020 grew by almost 24%

The value of bridging loans in default in the last quarter of 2020 increased by 13.9% on Q3 and was 23.8% higher than the same period in 2019, according to the latest ASTL data.

Vic Jannels, CEO at the ASTL (pictured above), said that the industry must remain cautious. 

“The effects of economic slowdown are starting to be reflected by the value of loans in default and, while the rollout 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.”

The latest figures compiled by auditors from data provided by all 35 members of the ASTL , indicated that bridging completions stood at £2.88bn in 2020, a 27.9% drop from £3.99bn in 2019.

Bridging loan books reduced to £4.48bn, a decrease of 2.5% on the previous year.

However, the value of applications in 2020 increased to £25.82bn, up from £23.19bn in 2019.

The surge in applications in Q3 last year went on to drive £918m of completions during Q4.

Applications in Q4 2020 were at £6.69bn, down by 12.7% on Q3, but still 22.9% higher than the same quarter in 2019. 

Average LTVs fell slightly in Q4 — the data suggests these have now dropped to below 59%.
“The Q4 lending figures give us an opportunity to review the performance of 2020 as a whole,” Vic added.

“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.”

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