2016 is an interesting year to try to predict. On the one hand bridging volumes, mainstream mortgage volumes and even FTB numbers are all up. On the other hand, global factors are likely to have a big influence this year, and the results of these on the UK economy and on the lending market are hard to forecast.

 

A sentiment survey conducted at the start of the year among ASTL members showed that 95% ASTL members felt that their business volumes are set to grow this year and expect their businesses to do better this year than in 2015. When looking at the bridging market as a whole, 68% of members think that bridging will grow this year with the remainder believing it will remain broadly the same. On a larger scale, all of the respondent bridging lender leaders were confident about the prospects of the UK economy over the next six months, news that will no doubt be music to the ears of the Chancellor, whose own predictions are more downbeat.

 

Looking at it in isolation it is true that the prospects for the UK and for bridging lending do look very positive. Demand is high, consumer sentiment is positive, and while it is slightly concerning that consumer borrowing is picking up, many economists believe that, in the short term at least, this will help boost economic growth. However, we do not exist in a bubble and global factors, be they the fall in the Chinese stock market, the drop in oil prices, the threat of terrorism or the refugee crisis, will have an all-pervading effect on our economy and on that most important of things, consumer confidence.

 

In the short term it is not unrealistic to believe that bridging finance will continue to flourish as professional investors find this a convenient and efficient way to fund their short-term cash flow requirements. The impending Mortgage Credit Directive will not leave bridging completely untouched, but its effects on bridging will be minimal, with the initial impact limited to those who are regulated or those who carry out BTL business (where they may be caught by the definition of Consumer Landlords).

 

It is still too soon to tell just what effect those global factors will have on the second half of the year. Closer to home, while the prospect of an interest rate rise seems to have been pushed back yet another year, property prices will continue to rise while we are still hamstrung by a lack of new housing; with the current lack of building supplies and shortage skilled construction workmen, this does not look like it will change any time soon.

 

As far as the ASTL is concerned, we expect to continue to attract new members and associate members and have already kicked off the New Year by welcoming another three. The achievements of 2015 set a high bar, especially with self-regulation, the profile of the association and the success of the annual conference. It’s going to be tough to better this in 2016, but we’ll try

 

Benson Hersch - CEO of the ASTL

A version of this article was published by Business Moneyfacts in March 2016