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Banks starting to lend again, says influential DMU report

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POSITIVE: Report is encouraging

Lending in the commercial property sector is on the increase and confidence is slowly returning to the market, according to the UK's largest property lending survey.

De Montfort University's influential Commercial Property Lending Market report, confirmed industry sentiment that the commercial real estate lending environment is becoming more benign.

It is compiled by Bill Maxted of DMU’s Faculty of Business and Law, based on surveys of the top 12 lenders in the commercial property sector. It is used across the sector as a strong indication of the state of the industry and future patterns.

The report revealed a number of promising indicators that the property lending market is cautiously emerging from the worst of the credit squeeze. 

This is based on factors including:

  •  More than half of all lenders for banks, building societies and insurance companies intending to lend more money
  •  Fall in interest rate margins
  •  Fewer new “problem loans”
  • Debt held against UK commercial property falling 2.5% from the end of 2012 to £193bn at mid-year 2013

Ion Fletcher, Director of Policy (Finance) at the British Property Federation, said: "Overall the survey's results are indicative of an improving commercial real estate market and offer welcome news for the industry. While we may well be moving towards a more diversified commercial real estate lending market, the move is very gradual and nobody should be under any illusions about the speed of change.”

Peter Cosmetatos, Chief Executive of CREFC Europe, said: “After several years in the doldrums with very little going on, the UK property debt market has staged a spectacular and vigorous recovery during 2013.”

Andrew Goodbody, Vice-President, Association of Property Lenders, said: “It is pleasing to see that the latest research confirms what most of our members are saying, that activity levels are rising and appetite for new business is increasing.”

Posted on Friday 13th December 2013

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