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Despite Brexit Vote, 95% of UK Banks Still Lending

The most recent instalment of the Cushman & Wakefield European Lending Trends report asserts that the decision to leave the European Union will not impact the willingness of UK banks to lend against commercial property.

The report, now in its fourth edition, is compiled using survey data from 50 key lenders across Europe. It covers both recent activity and anticipated trends.

The results reveal that 95% of respondents have not let the Brexit fallout interrupt their lending in the UK, although the overall number of new loans had decreased in the last six months. The report claimed that this was partly due to Brexit-related caution. Other factors included slower deal activity in Europe in the first half of 2016.

Looking ahead, the report regards market conditions as encouraging, with many lenders reporting more originations and refinancing for the next six months. Approximately 80% of lenders expect loan originations to remain constant or increase, while 90% anticipate similar results for refinancing.

The survey also revealed that most lenders are providing senior loans, with stretch senior loans and whole loans being the next most popular products. These results reflect a market preference for a single provider.

Specialists in Construction Insurance

Edward Daubeney, Cushman & Wakefield director EMEA structured finance, said that survey findings indicate that Brexit is not having a negative impact on lending activities. Lenders are focussed on standing investments in both top and second tier markets. When available, development finance is aimed at pre-let developments with experienced firms. Finance for speculative development ventures is practically non-existent.

According to the report, the average loan-to-value (LTV) ratio has decreased at the all-property level since January and is presently less than 60% in all markets. This reflects market caution and restraint, and does not suggest an imminent return to the trends seen back in 2006 and 2007

 

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