Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
shutterstock_114267883
March 21 2019

Gloomy lenders predict sliding UK property values in 2019

Hannah Smith News, Property Brexit, commercial property, lenders, link asset services, residential property, residential property prices

LENDERS are pessimistic on the prospects for UK commercial property values, with three-quarters expecting prices to fall this year, new research has found.

The research comes from Link Asset Services’ Real Estate Market Trend Analysis, which surveys UK lenders to assess their sentiment on the property sector.

It also found that only eight per cent of respondents expect UK commercial property prices to rise this year, with most predicting a drop of around 2.5 per cent. The outlook for residential property was equally muted, with 61 per cent of lenders predicting falling values, reinforcing the forecast of negative house price growth by the Office for Budget Responsibility in the recent Spring Statement.

Read more: Four key considerations when investing in property

Political uncertainty was one of the main factors weighing on lender confidence in commercial real estate, notably Brexit, with more than half of respondents highlighting it as a concern.

Their worries are being reflected in lower lending growth, the report said. The number expecting loan volumes to increase fell by 18 per cent compared to 2018, and the number expecting to increase the size of their origination teams fell by 10 per cent.

Loan-to-values have also fallen by a modest two per cent since 2018, reflecting concerns over elevated risk, while pricing on higher-risk categories of lending has continued to rise.

The report also demonstrates that lenders are focusing on their core market sectors and regions – a further sign of caution.

Lenders are looking for bigger ticket purchases to finance and some of the best loan pricing is only available on these more significant transactions. The maximum loan amount has increased exponentially for investment loans from an average of £134m in 2017, to £154m in 2018 and up to £226m in 2019. Lenders are more keen to offer long-term loans of 10 years or more, although demand is still concentrated more in the three- to five-year segment.

Read more: IFISA guide: Property loans

“Confidence has turned to caution at the start of 2019,” said James Wright, head of real estate finance at Link Asset Services. ‘Brexit has already weighed heavily on UK real estate market, and political risk is by far lenders’ largest concern. We are seeing many taking a far more cautious approach as a result, with fewer expecting to do more business, and many falling back into their core markets and products.

“It looks like, in the next 12 months, we’ll see lenders take a ‘softly, softly’ approach until there is greater clarity around the UK’s relationship with the EU, and economic and political fears calm.”

Read more: Property Partner launches IFISA for development loans

The House Crowd hits £100m milestone Assetz customers snubbing cash ISAs to boost their IFISA investment

Related Posts

nikhil-rathi-high-res

Industry News, News, Top 3

FCA boss defends appointment of new supervision and policy head

fca office

Industry News, News, Top 3

FCA pays FundingSecure investors due to delay in addressing complaints

Crypto currency background with various of shiny silver and golden physical cryptocurrencies symbol coins, Bitcoin, Ethereum, Litecoin, zcash, ripple

Cryptocurrency, Industry News, News, Top 3

Aave’s marketplace surpasses $5bn in liquidity

Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by