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Commercial Mortgages - UK - August 2017

“One year on, new commercial property lending activity looks to have remained largely unchanged despite Brexit, though it fell as expected from 2015. However, the structure of the market has changed, with a suppression of major financial commitments, a shift from new acquisitions to refinancing of existing deals, widening regional disparities, and heightened caution among lenders.”
– Marco Amasanti, B2B Analyst

This Report looks at the following areas:

  • What have been the key determinates of activity over the past year?
  • One year on, how has the commercial mortgages market reacted to Brexit?
  • How has the structure of the market changed in recent years?
  • Looking forward, how will Brexit further manifest in the industry?
  • What does the future hold for the industry?

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Table of contents

  1. Executive Summary

      • The market
        • Debt fell over the past year, regaining momentum following growth last year
          • Figure 1: Aggregated value of outstanding debt in loan books, £ billion, 2012-16
        • New loan volume falls, but market retains resilience
          • Figure 2: New loans volume, £ billion, 2012-16
        • Market segmentation
          • Figure 3: Value of commercial property transactions, £ million, 2016 & Y-T-D 2017
        • Market factors
          • Investment in UK commercial property
            • Figure 4: Investment in UK commercial property, £ billion, 2012-16
          • Regional disparities
            • Commercial lending rates
              • Figure 5: Average Interest rate for UK MFI new advances to PNFCs, interest rate %, at April 2013-17
            • Business confidence levels regain growth for the first time since Brexit but remain subdued
              • Figure 6: UK Business Confidence Index, per half year, 2007-17
            • Availability and demand for credit
              • Figure 7: Availability of Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
              • Figure 8: Demand for Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
            • By lender category
              • UK banks and building societies continue to tighten their dominance in lending
                • Figure 9: New loans volume, allocation by lender category, 2012-16
                • Figure 10: Outstanding debt in loan books, allocation by lender category, year-end 2015 & 2016
              • Commercial borrowing
                • Market forecasts
                  • Commercial property lending may have peaked
                    • Ongoing structural changes to the market by lender category
                      • Which sectors will grow and which will decline?
                        • Foreign investors well positioned to benefit from next few years of uncertainty
                          • What we think
                          • Key Issues

                              • How has the shape of investment changed over the past decade?
                                • How has Brexit manifested in the marketplace over the past year?
                                • Introduction

                                    • Definitions
                                      • Methodology
                                        • Abbreviations
                                          • Market positioning
                                            • The supplier
                                              • The customer
                                              • UK Economy

                                                  • Figure 11: Forecast GDP development, % change, 2017-21
                                                  • Figure 12: UK GDP quarterly development, 2003-16
                                                  • Figure 13: UK GDP in economic downturns and recoveries since 1979
                                                • Inflation
                                                  • Interest rates
                                                    • House prices
                                                      • Figure 14: UK House price changes, 12 month % change, 2006-16
                                                    • Consumer spending
                                                      • Manufacturing
                                                        • Figure 15: UK manufacturing, 2014-16
                                                      • Business investment
                                                        • Figure 16: UK GFCF, £ million, 2003-16
                                                      • Imports
                                                        • Exports
                                                        • Market Factors

                                                          • Key points
                                                            • Investment in UK commercial property
                                                              • Figure 17: Investment in UK commercial property, £ billion, 2012-16
                                                            • Regional disparities
                                                              • Figure 18: Value of commercial property transactions, £ million and number of transactions, 2015, 2016 & 2017 Y-T-D
                                                              • Figure 19: Value of commercial property transactions, £ million, 2015, 2016 & 2017 Y-T-D
                                                            • Commercial lending rates
                                                              • Figure 20: Average interest rate for UK MFI new advances to PNFCs, interest rate %, at April 2013-17
                                                              • Figure 21: Average interest rate for UK MFI new advances to PNFCs, interest rate %, at April 2013-17
                                                            • Business confidence levels regain growth for the first time since Brexit but remain subdued
                                                              • Figure 22: UK Business Confidence Index, per half year, 2007-17
                                                              • Figure 23: UK Business Confidence Index, per half year, 2007-17
                                                            • Availability and demand for credit
                                                              • Figure 24: Availability of Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
                                                              • Figure 25: Availability of Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
                                                              • Figure 26: Demand for Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
                                                              • Figure 27: Demand for Corporate Credit to PNFCs in the last three months, net % balance, Q2 2011-Q2 2017
                                                          • Market Size

                                                            • Key points
                                                              • Debt fell over the past year, regaining momentum following growth last year
                                                                • Figure 28: Aggregated value of outstanding debt in loan books, £ billion, 2012-16
                                                              • New loan volume falls, but market retains resilience
                                                                • Figure 29: New loans volume, £ billion, 2012-16
                                                            • Market Segmentation

                                                              • Key points
                                                                  • Figure 30: Value of commercial property transactions, £ million, 2016 & Y-T-D 2017
                                                                • Offices
                                                                  • Retail
                                                                    • Industrial
                                                                      • Leisure
                                                                        • Figure 31: UK Leisure industry market value, £ million, 2012-16
                                                                    • Commercial Mortgages by Lender Category

                                                                      • Key points
                                                                        • UK banks and building societies continue to tighten their dominance in lending
                                                                          • New loan volumes by lender category
                                                                            • Figure 32: New loans volume, allocation by lender category, 2012-16
                                                                            • Figure 33: New loans volume, allocation by lender category, 2016
                                                                          • Outstanding debt in loan books by lender category
                                                                            • Figure 34: Outstanding debt in loan books, allocation by lender category, year-end 2015 & 2016
                                                                            • Figure 35: Outstanding debt in loan books, allocation by lender category, year-end 2016
                                                                        • Commercial Borrowing

                                                                          • Key points
                                                                            • Net lending in the last quarter highest in the four-year review period
                                                                              • Figure 36: UK MFI’s net loans to non-financial businesses, by size of business, £ million, Q4 2013-Q2 2017
                                                                          • Industry Structure

                                                                            • Key points
                                                                              • Industry development
                                                                                • Increasing regulation changing mortgage lending activity
                                                                                  • Ring-fencing
                                                                                    • Acquisitions and mergers
                                                                                      • Changes in the structure of the industry:
                                                                                        • Banks and building societies
                                                                                          • Figure 37: Analysis of the Banks & Building societies industry structure, % change, 2012-16
                                                                                        • Financial leasing
                                                                                          • Figure 38: Analysis of the financial leasing industry structure, % change, 2012-16
                                                                                        • Other credit granting
                                                                                          • Figure 39: Analysis of the other credit granting industry structure, % change, 2012-16
                                                                                        • Structure by turnover
                                                                                          • Banks and building societies
                                                                                            • Figure 40: Analysis of the financial structure of banks & building societies industry, 2015 & 2016
                                                                                          • Financial leasing
                                                                                            • Figure 41: Analysis of the financial structure of the financial leasing industry, 2015 & 2016
                                                                                          • Other credit granting
                                                                                            • Figure 42: Analysis of the financial structure of the other credit granting industry, 2015 & 2016
                                                                                          • Structure by employment
                                                                                            • Banks and building societies
                                                                                              • Figure 43: Analysis of the Employment structure of banks and building societies industry, 2015 & 2016
                                                                                            • Financial leasing
                                                                                              • Figure 44: Analysis of the employment structure of the financial leasing industry, 2015 & 2016
                                                                                            • Other credit granting
                                                                                              • Figure 45: Analysis of the employment structure of the other credit granting industry, 2015 & 2016
                                                                                          • Company Profiles

                                                                                            • Aldermore Bank

                                                                                                • Recent company activity
                                                                                                  • Figure 46: Financial analysis of Aldermore Bank PLC, £ million, 2012-16
                                                                                                • Company strategy
                                                                                                • Barclays PLC

                                                                                                    • Recent company activity
                                                                                                      • Figure 47: Financial analysis of Barclays PLC, £ million, 2012-16
                                                                                                    • Company strategy
                                                                                                    • HSBC

                                                                                                        • Recent company activity
                                                                                                          • Figure 48: Financial analysis of HSBC bank, £ million, 2012-16
                                                                                                        • Company strategy
                                                                                                        • Lloyds Banking Group

                                                                                                            • Recent company activity
                                                                                                              • Figure 49: Financial analysis of Lloyds Banking Group, £ million, 2012-16
                                                                                                            • Company strategy
                                                                                                            • Principality Building Society

                                                                                                                • Recent company activity
                                                                                                                  • Figure 50: Financial analysis of Principality Building Society, £ million, 2012-16
                                                                                                                • Company strategy
                                                                                                                • Royal Bank of Scotland Group

                                                                                                                    • Recent company activity
                                                                                                                      • Figure 51: Financial analysis of RBS Group, £ million, 2012-16
                                                                                                                    • Company strategy
                                                                                                                    • Santander UK PLC

                                                                                                                        • Recent company activity
                                                                                                                          • Figure 52: Financial analysis of Santander UK PLC, £ million, 2012-16
                                                                                                                        • Company strategy
                                                                                                                        • Shawbrook Bank

                                                                                                                            • Recent company activity
                                                                                                                              • Figure 53: Financial analysis of Shawbrook Bank, £ million, 2012-16
                                                                                                                            • Company strategy
                                                                                                                            • Market Forecasts

                                                                                                                              • Key points
                                                                                                                                • Commercial property lending may have peaked
                                                                                                                                  • Ongoing structural changes to the market by lender category
                                                                                                                                    • Which sectors will grow and which will decline?
                                                                                                                                      • Figure 54: UK commercial forecasts, % change and %, 2017-21
                                                                                                                                    • Foreign investors well positioned to benefit from next few years of uncertainty
                                                                                                                                    • Further Sources and Contacts

                                                                                                                                      • Trade associations
                                                                                                                                        • Association of Short Term Lenders
                                                                                                                                          • CoStar
                                                                                                                                            • The Institute of Chartered Accountants in England and Wales
                                                                                                                                              • National Association of Commercial Finance Brokers
                                                                                                                                                • RICS
                                                                                                                                                  • Trade magazines
                                                                                                                                                    • Bridging & Commercial
                                                                                                                                                      • Business Matters
                                                                                                                                                        • Commercial Reporter
                                                                                                                                                          • Loans Insider
                                                                                                                                                            • Mortgage Finance Gazette
                                                                                                                                                              • Mortgage Introducer
                                                                                                                                                                • Mortgage Strategy
                                                                                                                                                                  • Trade exhibitions
                                                                                                                                                                    • ASTL Annual Bridging Conference 2017 – Brexit and Bridging
                                                                                                                                                                      • Council of Mortgage Lenders (CML) Annual Launch
                                                                                                                                                                        • Commercial Real Estate Finance Council (CREFC) Autumn Conference
                                                                                                                                                                          • Financial Services Expo London 2017
                                                                                                                                                                            • The Financial Professional Show

                                                                                                                                                                            Companies Covered

                                                                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                                                                            Commercial Mortgages - UK - August 2017

                                                                                                                                                                            US $1,282.26 (Excl.Tax)