The Association of Short Term Lenders (ASTL) has revealed that sentiment amongst bridging lenders has “bounced back considerably” since the EU referendum in June.

The ASTL conducted a survey amongst its lender members in the week directly following the referendum. The results at that time showed a sharp drop in sentiment with 67% of respondents feeling less confident about the long-term prospects of the UK economy, compared to 81% feeling confident or neutral after the budget in April.

The current survey was conducted two months later, at the end of August.  Now 30% of respondents say they are positive about the long term future for the UK economy, up from just 6% following the vote in June.  37% have neutral feelings about the longer term prospects for the UK; while 33% are not confident about the UK’s economic prospects. This is just half the number of people who said they were not confident in June.  This means that 24% of lenders are more confident than they were following the referendum result.  An additional 10% have changed from negative to neutral.

This confidence has also spread to the prospects for their own businesses. 71% of bridging lenders feel that their business volumes will grow over the next six months, up from just 31% in June; while 23% think they will stay the same.  Only 7% of lenders are now negative about the prospects of growth in their business.

However, while 45% think that the bridging market will grow over the next six months, 23% think that it would shrink and 32% think that it will stay the same. This shows a definite improvement from two months ago, at which point only 19% thought that the bridging market would grow and 51% thought that it would shrink.

Looking at the wider market, no one surveyed believes that house prices are going to rise over the next six months. 43% feel that house prices will drop, although this is lower than the 68% who thought this in June; while 57% think that house prices will stay the same.

Benson Hersch (pictured), chief executive of the ASTL, said: “Optimists will take heart from these results as there has been a definite positive swing in the feelings of bridging lenders, reflected by a jump in the ASTL positivity index.

“This was no doubt buoyed by the Q2 bridging figures which showed bridging completions 19% higher than in Q2 2015, applications for loans up 61%, while loans written in the year ending June 2016 were £2.85bn, an increase of 17%.  While only a few days of this was in the post Brexit period it clearly displays that the bridging industry is in a strong place at the moment.

“Today’s results show more of a sense of normality and highlight the sense of shock that was rippling through the industry in the days immediately following the referendum result.  However it is clear that despite a bounce back, many respondents are still sitting on the fence, uncertain as to which way the wind may yet blow.  Newspapers talk of a ‘phoney war’ period, it will be interesting to see if these opinions change yet further following the ASTL conference in a week’s time, which will provide further in- depth information on the state of the economy, the housing market and the changes that may yet face the lending industry.”