Bank lending against commercial property has grown in the first six months of 2019, rising to £23.3 billion.
New loans grew from £21 billion in the first half of 2018, which represents a year-on-year growth of 10.9 per cent.
Research from the Cass Business School UK Commercial Real Estate Lending Report indicates that new lending has increased by four per cent compared to last year, with property transactions to the value of £23 billion taking place.
This represents a total of £1 of new debt for every £1 of property value in a transaction in the first six months of 2019, exceeding the ten-year average, which is £0.74 of new debt per £1 of property value in a transaction.
However, experts believe that a significant portion of the new debt came as a result of restructuring and refinancing, with approximately 40 per cent of new debt being used to finance property purchases.
The outstanding development finance figure remained static, while undrawn facilities increased from £22 billion at the end of 2018 to £27 billion in the first half of 2019, indicating that more development finance will be available for drawdown in the second half of the year.
Neil Odom-Haslett, President of the Association of Property Lenders, said: “The first six months of 2019 have been challenging due to a number of reasons, notably, the lack of transactions, the structural changes to the retail sector, the uncertainty that Brexit has bought and many lenders being in ‘risk-off’ mode.
Notwithstanding these headwinds, real estate lenders have had an incredibly busy first half as they refinance their legacy loan books and reposition some of their retail lending.”