The total amount of bridging completions across the market decreased to £2.88bn in 2020, a 27.9% fall from the £3.99bn recorded in 2019, according to new figures from the Association of Short-Term Lenders (ASTL).

Bridging loan books also dropped to £4.48bn, which was a decrease of 2.5% on the previous year.

However, the figures also showed that applications grew by more than 11% on the previous year. The ASTL also revealed the value of applications in 2020 increased to £25.82bn, which was up from £23.19bn in 2019.

The latest bridging data showed that the surge in applications in the third quarter last year went on to drive a 34.9% increase in completions during Q4 – with £918m of completions recorded in the quarter.

Applications in Q4 were at £6.69bn – a total down by 12.7% on Q3 – but they were still up by 22.9% on the same quarter in 2019. The figures also showed that average LTVs fell slightly in Q4 and have now dropped below 59%.

ASTL CEO, Vic Jannels, commented: “The Q4 lending figures give us an opportunity to review the performance of 2020 as a whole. Completions were down on the previous year, which is to be expected given the periods of national lockdown.

“However, applications were actually higher than in 2019, which reflects the enormous potential the bridging market has to provide customers with a funding solution through these difficult times.”

The latest figures also revealed that the value of loans in default in Q4 increased by 13.9% on Q3, and was also 23.8% higher than the same period the previous year. The ASTL suggested that borrowers continued to feel the financial impact of the pandemic throughout Q4, and Jannels added that the bridging market must “remain cautious”.

“The effects of economic slowdown are starting to be reflected by the value of loans in default and while the roll out of the vaccine for COVID-19 continues at pace, a return to normal levels of economic activity seems unlikely before the summer, so these trends may persist for several months,” Jannels added.

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