As we approach the end of the year, hopefully we can plan for 2022 with a degree of certainty that didn’t exist this time last year. Happily for the bridging market, we can do so from a position of strength and confidence.

The latest Association of Short Term Lenders (ASTL) data shows that the sector continued to deliver strong, sustainable growth in the third quarter (Q3) of 2021, with applications and loan books both higher than in Q2, while the value of loans in default also fell for the third consecutive quarter.

Bridging applications reached a record high of £7.72bn in Q3, an increase of 4.9% on Q2. While the value of completions fell by 6.1%, it still totalled £1bn, meaning the value of loan books stands at more than £5bn for the first time. The figure of £5.07bn was an increase of 6.8% on Q2 and a jump of 11.1% on the same quarter last year.

The programme will be reviewed and refined by key stakeholders on an ongoing basis

Average loan-to-values continued to hold at 59.8%, which demonstrates a robust approach to new lending.

The value of loans in default fell for the third consecutive quarter in Q3, showing a decrease of 4.1% over Q2 and a fall of 3.6% on the same quarter last year. This shows that lenders have been able to deliver significant growth throughout this difficult period while also taking a considered and sensible approach to lending.

Maintaining high standards

It is important to maintain these high standards of practice throughout the industry. So we have been working with the Financial Intermediary & Broker Association and the London Institute of Banking & Finance (LIBF) to create a series of optional e-learning modules.

These will be recognised through the award of an LIBF digital badge and accredited for continuing professional development purposes.

We hope the announcement of these proposals will stimulate even greater confidence in our sector

The aim is to provide an ongoing programme of learning to cover specialist property finance and the structures of different types of business that may require it, with specific information on bridging and short-term finance, development finance, commercial mortgages and specialist buy-to-let. For each area, there will be insights on how they work and how they are underwritten, and the differences between them.

The programme will also examine how commercial lenders and brokers operate, and some of the key planning considerations needed in commercial property finance, including permitted developments.

The final module will be a series of case studies. The learner will be given different scenarios and will need to identify key information, such as how the lending will be categorised, what key additional information the broker will need to package the case, how it will be underwritten, and the likelihood of it being agreed.

We’re encouraging engagement across the industry

The programme will be reviewed and refined by key stakeholders on an ongoing basis to ensure it promotes the most appropriate behaviour and results.

We hope the announcement of these proposals will stimulate even greater confidence in our sector as we all work towards making the whole borrowing experience more comfortable and less mysterious.

We won’t insist that our members work only with brokers who have been through the programme, or that brokers work only with lenders whose employees have completed the course. But we want to encourage engagement across the industry, not just as one-off participation but as part of an environment of continuing learning.

Look out for more details of these proposals and delivery of the plans next year.

Vic Jannels, chief executive, Association of Short Term Lenders