Bridging loans jumped by more than a fifth to £1.1bn in the second quarter of the year reflecting the easing of lockdown restrictions, says the Association of Short-Term Lenders.

Short-term lending lifted by 23.3% compared to the previous three months, driven by rising completions and fewer defaults.

Bridging loan books reflect the increase in completions and now stand at over £4.7bn, the ASTL’s audited data reports.

Loan applications in the quarter slipped by 1.7% to £7.36bn, compared to the previous three months, but for the year to the end of June were still 26.9% higher than applications in the year to the end of June 2020.

Average loan-to-value ratios showed a small increase since the March 2021 quarter and now stand at 59.8%.

The association says the value of loans fell by 7.6% compared to the first three months of the year, with the number of repossessions was also down in the second quarter, “suggesting the continued easing of coronavirus restrictions is having a positive effect”.

ASTL chief executive Vic Jannels says: “The second quarter 2021 lending figures are pleasing for a number of reasons.

“Not only is the market continuing to grow and show signs of ongoing recovery as we emerge from the pandemic, but the increase in completions also represents improving conversion rates, which is good news for brokers, lenders and customers.

“The falling value of loans in default and number of repossessions also reflect the quality of lending and shows that the market is continuing to grow in a sustainable way and enhance its ever-improving reputation.”