News

Nivo has become the latest professional organisation to join the Association of Short Term Lenders (ASTL) as an associate member.

FinTech, Nivo, designed its technology solution to meet the needs of specialist lending. Within its convenient messaging network, Nivo simplifies information gathering and checks using a range of fintech tools like biometric identity verification, open banking, advanced e-signing and instant filesharing. It then makes it much easier to progress deals quickly, through seamless data and file transfer and instant messaging with intermediaries.
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Bridgeshield has become the latest professional organisation to join the Association of Short Term Lenders (ASTL) as an associate member.

Bridgeshield Asset Management provides lenders with a broad range of solutions, from property risk assessment at origination, through to Asset Management and LPA Receivership solutions for when things don’t work out as expected.
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Bridging completions were £470m in Q2 2020, down 56% on Q4 2019, but applications rose slightly in the same period.

This is according to the latest figures compiled by auditors from data provided by members of the Association of Short-Term Lenders (ASTL). The data shows that applications increased by just over 1% in Q2 2020, compared to Q4 2019, while loan books showed a small decrease but remain at £4.5bn. Average LTVs increased slightly in Q2 2020 compare to Q4 2019, but continue to remain at sub 60%.
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The rate of change in the short-term lending market since March has been immense, but one of the great things about our sector is that it is possibly the most resilient and adaptable area secured lending.

Lenders have been incredibly quick to respond to the changing environment and evolve their processes accordingly and while some lenders have pulled back from the market, many have continued to lend throughout lockdown, using technology and remote valuations to continue to operate effectively. They are, rightly, taking appropriate precautions to mitigate risk, and we have seen a tightening of some criteria, such as limiting LTVs, reduced appetite for larger loan sizes and taking a more cautious approach to ground-up developments.
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If something appears too good to be true, it probably is – and this adage is ringing true for some of the huge number of customers who chose to defer the payments on their mortgage as part of the payment holiday scheme that was announced by the government in March. It was never a payment holiday – merely a deferral – but there are other downsides for borrowers who have taken up the offer, and these are now rapidly becoming apparent.

According to a recent poll by Mortgage Solutions, nearly four in 10 (39%) brokers said that they couldn’t place a case as a result of their client having taken a mortgage payment holiday or having accessed a government support scheme. Read more

One of the lessons we have all learned from the COVID-19 pandemic is that the world is an unpredictable place in which nothing is certain. As the lockdown restrictions slowly start to be relaxed, nobody knows what shape the economic recovery might take. But we can anticipate future trends based on some of the many changes that have happened during the lockdown.

I spoke to some members of the ASTL Executive Committee to find out their thoughts on the impact of COVID-19 and some of the trends we might expect to see in the future. The key themes were the resilience of the sector, the importance of technology and the opportunities for residential development in areas that have traditionally been dominated by commercial space.
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In April, the international professional services firm, EY published its annual report into the UK bridging market. The research for the report was carried out earlier in the year, before the scale of the COVID-19 crisis was fully realised and, while this has dated some of the results, there are many elements that remain true in the current environment and are likely to continue to do so as we emerge from this pandemic.

One, particularly interesting section of the report, that I would like to focus on, looked at the key customer considerations in choosing a bridging lender. According to the research, 58% of respondents cited “speed of execution” as very important for a customer when choosing a bridging lender, which is consistent with the results of the previous year’s survey.
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Bridging loan books grew to £4.5billion in 2019, an increase of 19.7% compared to 2018.

This is according to figures compiled by auditors from data provided by members of the Association of Short-Term Lenders (ASTL), which confirmed that completions in Q4 2019 reached £1.068 billion – an increase of 13.7% on Q3, while average LTVs continued to remain below 60%.

However, applications in the final quarter of 2019 fell by 10.7% on the record-breaking previous quarter.
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One of the defining comments about the current situation has come from Chancellor of the Exchequer, Rishi Sunak, who said during one of his statements:

“When this is over, and it will be over, we want to look back at this moment and remember the many small acts of kindness done by us and to us. We want to look back this time and remember how we thought first of others and acted with decency. We want to look back on this time and remember how, in the face of a generation-defining moment, we undertook a collective national effort – and we stood together.”
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