Bridging loan valuations hit a record £1.2bn in the fourth quarter of 2021, an increase of 19% compared to the third quarter, according to recent data from the Association of Short Term Lenders (ASTL).

Applications reached an all-time high over the period, according to the trade association, totalling £12.7bn, a 65.4% increase on the previous quarter, which held the previous record.

Loan book value in the bridging space climbed to £5.08bn at the end of December, a marginal increase on the previous quarter, which finished at £5.07bn.

On average, LTVs increased from 59.8% in the third quarter, to 61.2% in the fourth.

“We are in a position where loan books are at a record level, completions are higher than they ever have been and there is a strong pipeline with record and rising application numbers,” says ASTL chief executive Vic Jannels.

“Even more positive, however, is the indication that this lending is being delivered without any significant advance up the risk curve. LTVs have crept up but remain modest and falling values of loans in default and numbers of repossessions indicate that risk is being well managed,” he adds.

According to ASTL, defaults in the bridging market decreased for a fourth consecutive quarter last year. The number of repossessions also fell, it said.