60% of bridging lenders lose confidence after Brexit

60% of bridging lenders lose confidence after Brexit

Confidence among bridging lenders has dropped noticeably according to a poll taken a week after the EU referendum.

The sentiment survey, which was organised by the Association of Short Term Lenders (ASTL), found that 60% of bridging lenders were less positive about the long-term future of the UK economy following the decision to leave the European Union.

The number of lenders who didn’t feel confident about the prospects of the UK economy over the next 12 months has doubled since April’s survey, growing from 33% to 66%.

Lenders were also less positive about the growth of the bridging market with just 20% believing the market would grow over the next 12 months, compared to 71% back in April.

However, the ASTL found that at its quarterly members meeting held last week the mood was more upbeat with 40 or so firms seeming to be more confident about the new reality as the majority reported they had yet to see any noticeable changes in business.

In fact, 75% of lenders felt that regardless of the outlook of the economy, the volume of business at their firm would either increase or stay the same over the next six months.

“It is clear that there was a general sense of shock immediately following the referendum, which led to some dramatic results in the sentiment survey, but this negativity has now been tempered in many quarters,” stated Benson Hersch, CEO of the ASTL.

“In speaking to lender members, several have expressed that while the UK economy is undoubtedly in for a rocky ride over the next few months or even longer, much of what we are seeing is a correction that would have happened anyway.”

Benson continued by adding: “Brexit is also a good excuse for both politicians and some businesses to release bad news that actually pre-dates Brexit by some time and many situations are now going to be blamed on it.  

“The sentiment survey was a snapshot in time immediately following the referendum, but I expect to see these results swing back up towards the positive as the markets settle down and people get used to the result.”

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