Transition Watch: Stand Up and Make Yourself Count


What is the size of the gateway market?

Lending data from the Association of Short-Term Lenders (ASTL) – the only trade body dedicated to representing the interests of lenders in the short-term home loan market – is considered the industry standard.

At the end of 2021, our data showed a record period for bridge loans in the last quarter (Q4), with completions and applications both hitting an all-time high.

Help us better represent the sector

The figures, which are compiled and analyzed by independent auditors using data provided by ASTL members, show transition claims reached £12.7bn in the fourth quarter of 2021, an increase of 65.4% compared to the previous quarter, which was itself a record period at the time.

The value of deliveries in the fourth quarter increased by 19% compared to the third quarter to reach a new record of £1.2 billion. This led to a further increase in the value of the loan portfolios, which reached £5.08 billion at the end of December, representing a slight increase from the previous quarter’s total of £5.07 billion.

Small operations

However, official data puts bridge loan pounds at just over £5.07billion. The problem is that our data does not include figures for every lender active in the bridging market. We include most recognizable names. At last count, we had 41 lending members.

By identifying yourself, you will help us to have a better idea of ​​the size of the bridging market.

Popular opinion is that, as part of the transition, there are probably up to 50 lenders who would be considered recognizable names. Most are members, but there remain notable exceptions that would represent significant business volumes.

We are working hard to incorporate them but, even if we are successful and every recognizable brand active in the bridge market becomes a member of the ASTL, it is highly unlikely that we will be able to provide a definitive figure for the size of the market. .

Indeed, in addition to the 50 recognizable brands, there are 200 to 400 so-called invisible lenders. These are small operations, where individuals or families have a large sum of money and choose to make their money profitable by deploying it in the form of bridging loans.

The ability of small lenders to operate in our market is one of the drivers of change and innovation

Many of these lenders focus on a local area, perhaps working with one or two clients and making one or two loans a year. But there are hundreds of them. And, because lenders operating on this scale tend to be active only in the unregulated market, we have no record of how many there are, who they are, and how much business they collectively underwrite.

Transparency

I’m not saying small bridge lenders are a bad thing. The ability of small lenders to operate in our market is one of the drivers of change and innovation. However, as the sector develops, it must continue to mature and become more and more professional; in particular because it will attract more attention from the regulator. We would expect it to be more transparent.

At the ASTL, we have set the tone for this transparency with our Membership Rules and Code of Conduct. However, if the industry trade association cannot give a definitive size for the market, we have a long way to go.

In addition to the 50 recognizable brands, there are 200 to 400 so-called invisible lenders. These are small operations

I will end with a call to action. If you are a small “invisible” lender operating in the transition space, please contact the ASTL and let us know.

You don’t have to join our great association, although we would love for you to. But by identifying yourself, you will help us get a better idea of ​​the size of the bridging market, in terms of the number of lenders and the volume of business.

This will help us better represent the sector in our ongoing dialogue with regulators, policymakers and the media.

Vic Jannels is the general manager of the ASTL


This article appeared in the May issue of MS.

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