This year saw the ASTL celebrate its 10th anniversary. This has provided the ideal opportunity to look back and see what has been achieved over the past decade. ASTL membership has grown significantly – we had 19 founder members in 2008 and this has grown to 65 members and associate members in 2018.

The past 12 months have seen a fair amount of uncertainty in the property market, especially in the South East. This has made life difficult for some member firms, but the majority relished the challenge. We’ve seen several new entrants join the sector, with varying levels of experience in short-term property lending, so it will be interesting to see how these challengers fare in the next 12 months.

The volume and value of the short-term lending market continued to rise in 2018. Completions by ASTL members were close to £4bn for the year ended 30 September 2018, a rise of 21.2 per cent on the figures for the year ended 30 September 2017. During the same period, loan books have increased by 16.6 per cent and applications by 8.9 per cent.

The ASTL has been working with various organisations during 2018. These include the Financial Intermediary and Broker Association (FIBA), with whom we aim to foster greater broker-lender understanding. We’ve also participated in discussions with the National Association of Commercial Finance Brokers and Financial Conduct Authority, as well as responding to various FCA proposals. We’ve also held a series of seminars on fraud and other issues such as development funding.

At the ASTL, we’re excited about what 2019 holds. We plan to provide practical education for staff with less experience, as well as holding a series of seminars, designed to promote understanding of various issues. Associate members will be hosting and presenting at these meetings and it’s an ideal opportunity for experience to be shared within member firms. We will also be pursuing initiatives with other trade organisations and regulatory bodies.

A highlight of 2019 will be our conference which will be held on 30 October. The conference brings together leading figures across bridging, finance and politics to debate the latest industry trends and put forward ideas and predictions.

The economic climate is expected to be more difficult in 2019, with exit and refinance becoming tougher as traditional lenders are even more cautious. It’s difficult to see how all short-term lenders will flourish – mergers and acquisitions are likely. It will be interesting to see if peer-to-peer lenders struggle in 2019. If so, regulatory bodies are expected to react.

On the whole, short-term property lending will continue to grow as firms take the opportunities presented by the continuing lack of so-called mainstream finance. There will be pressure on rates and loan-to-values, but experienced and well-run firms should resist the temptation to increase risk levels. Despite the pitfalls for the unwary, the outlook for the short-term lending sector remains reasonable.

 

Benson Hersch, CEO of the ASTL

A version of this article appeared in the January edition of Specialist Lending Solutions (web)