Commercial property lending up by more than a quarter

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Commercial property lending increased by more than a quarter (27 per cent) in the first half (H1) of 2018, a new analysis reveals.

According to Cass Business School’s latest UK Commercial Real Estate Lending Report, new lending in the market rose sharply during the first six months of the year, with origination volumes rising to £22.5 billion – up 27 per cent on figures recorded in H1 2017.

During the same period, however, investment volumes were down by two per cent year-on-year, settling at £25.4 billion.

The report reveals that more than half (53 per cent) of lending agreed during the first half of the year came from acquisition financing, with 61 per cent of newly originated loans targeting London and South East England.

Meanwhile, it reveals that 14 per cent of loans went towards financing portfolio transactions, while fewer lenders granted loans financing single property or unit purchases during the period.

Commenting on the figures, Ion Fletcher, Director of Finance Policy at the British Property Federation, said that the UK’s commercial property lending market was “in fairly good shape,” particularly in light of ongoing political uncertainties surrounding Brexit.

Neil Odom-Haslett, President of the Association of Property Lenders, added: “Overall the headwinds have got a little bit stronger and its testament to the current lending culture that as a real estate lending community we are managing them appropriately.”

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