New bridging applications totalled £7.49bn in the first quarter of the year, new statistics published by the Association of Short-Term Lenders (ASTL) have revealed.

Figures compiled by auditors from data provided by ASTL members showed that this was an increase of more than 25.5% on the same period in 2020.

The data also revealed that the value of new bridging applications in Q1 2021 was 12.0% higher than in Q4 2020, and 17.9% higher on the previous year in the 12-month period ending 31 March 2021.

Completions in Q1 2021 fell by 1.9% on Q4 2020 but were up by 10.7% on the same period last year. In the 12 months up to 31 March 2021, the ASTL also revealed that completions were down by 24.1% on the previous year, reflecting the period of low activity during last year’s lockdowns.

Furthermore, the value of bridging loan books dropped to £4.40bn at the end of Q1 2021, a slight decrease of 1.7% on the previous quarter, and a figure down by 3.5% on the same period last year.

Commenting on the data, ASTL CEO, Vic Jannels, stated: “The Q1 lending figures reflect the story we are hearing from the market, that everyone is busy with new business applications.

“This is likely to be a combination of more rigorous underwriting by lenders, brokers hedging their bets by submitting multiple applications to multiple lenders and some cases where bridging is no longer required by the time of the completion date. We should keep a watchful eye on this trend as a decreasing conversion rate for loans benefits nobody in the process.”

Furthermore, the ASTL figures revealed that the value of loans in default showed a decrease of 4.5% compared to December 2020. The value of loans in default is now just 2.2% higher than March 2020.

“On a more positive note, the value of defaults decreased on last quarter and is only a little higher than it was at the start of the pandemic,” Jannels added.

“This reflects the hard work of all of our members in working with their existing customers over the last year and, with positive signs for the economy ahead, we have reason to believe that this trend can continue.”

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