NACFB bridging lending figures surprise lenders

Last month in its annual broker survey, the NACFB revealed bridging finance grew by only 1.2% in 2015.

The amount of bridging finance increased from £721m to just £727m during the year as the association suggested the market was treading water.

“It’s reasonable to assume that both these fields have been somewhat depressed by the move back towards more traditional property finance, as evidenced by the huge surge in commercial mortgage business reported,” said the NACFB.

“As in every funding category, we have removed the extreme ends of the data so they are not affected by single massive deals.”

In June, West One revealed that bridging lending grew by more than one-third, and Jonathan Sealey, CEO of Hope Capital was taken aback by the NACFB’s figures.

“To be honest I am very surprised at the low growth reported by the NACFB for bridging lending over the past year,” said Jonathan.

“This year has been extremely busy at Hope Capital, and indeed, I hear the same from across the industry; the Association of Short Term Lenders (ASTL) recently reported a 32% increase in bridging loan values to the year ended June 2015.”  

Jonathan added that Hope had surpassed all expectations in 2015 with a large increase in its loan book and extending the company’s operations in Scotland.

“We have a good pipeline and I fully expect business to remain brisk as clients look for, and understand the value of, short term solutions for their commercial, buy-to-let and development plans,” added Jonathan.

Keith Aldridge, MD of Amicus, argued the NACFB figures had to some degree, been taken out of context due to the 1.2% growth only relating to NACFB members and not the whole sector. However Keith stated there was no doubt commercial brokers could do more to capitalise on bridging opportunities.

“Along with many other members of the ASTL, we are working closer with the likes of Norman Chambers (Deputy CEO NACFB) to educate a broader group of members to the options that exist in the short term funding sector,” said Keith.

“We have just seen a record quarter at Amicus, increasing completed volumes by over 120% on the same period last year and recording our highest level of monthly redemptions - and so we can only see the growth continuing into 2016.

“At last week’s ASTL conference, (Chief Executive) Benson said the market expectations, as ever, remain difficult to predict, but I can see nothing on the horizon to dampen my confidence that in 2016 we will [be] stronger and better funded than we are now, and we are on our way to a record 2015 - so if we continue to improve the education of NACFB members the future is good for us all.”

Ashley Ilsen, New Business Executive at Regentsmead, said he had seen a lot of lenders enter the market, and given the state of the economy, there was only so much demand for bridging.

“As a result some lenders have been under pressure to lower rates in order to grab more market share,” added Ashley.

“We at Regentsmead have seen this spill into our specialist part of the market with certain bridging lenders needing to lend in the development sector in order to get funds out.

“Where the bridging market goes in the next 12 months will very much be led by macroeconomic factors, such as interest rates and inflation and of course property prices.”