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Commercial Mortgages - UK - July 2019

Market Segmentation

  • UK Banks & Building Societies
  • Other Non-Bank
  • Other Lenders
  • German Banks
  • Insurers

Company Profiles

  • Barclays PLC
  • HSBC
  • Lloyds Banking Group
  • Royal Bank of Scotland Group
  • Santander UK PLC

“Given the volatility of commercial borrowing and the wider financial climate, projections for the value of the commercial mortgages market are heavily dependent on broader economic factors and the outcome of Brexit, which remains uncertain following the second extension of the Article 50 deadline and the possibility of another general election after the change in prime minister.”
– Lewis Cone, Senior B2B Analyst

This report looks at the following areas:

  • Brexit impasse and uncertainty causing changes to mortgage lending strategies
  • Empty and unused properties in London could offer new opportunities

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • New lending rose by 11% in 2018
              • Figure 1: Gross value of annual loan originations, 2014-2018, (£ billion)
            • Total outstanding debt rises to five-year high
              • Figure 2: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2014-2018, (£ billion)
            • New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
              • Figure 3: Forecast gross value of annual loan originations, 2019-2023, (£ billion)
            • Outstanding debt secured on property to continue rising
              • Figure 4: Forecast value of outstanding debt in loan books secured on UK commercial property, 2019-2023, (£ billion)
            • What we think
            • Issues and Insights

              • Brexit impasse and uncertainty causing changes to mortgage lending strategies
                • The facts
                  • The implications
                    • Empty and unused properties in London could offer new opportunities
                      • The facts
                        • The implications
                        • The Market – What You Need to Know

                          • New lending rose by 11% in 2018
                            • Total outstanding debt rises to five-year high
                              • New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
                              • Market Size

                                • Methodology
                                  • New lending rose by 11% in 2018
                                      • Figure 5: Gross value of annual loan originations, 2014-2018, (£ billion)
                                    • Total outstanding debt rises to five-year high
                                        • Figure 6: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2014-2018, (£ billion)
                                    • Category Market Share

                                      • Non-banks continue to grow presence in new lending
                                        • Figure 7: Gross value of loan originations, by allocation, 2017 and 2018, (% of total)
                                    • Regional Analysis

                                      • London and South East account for over 60% of transaction value and are home to a third of all completed transactions
                                        • Figure 8: Commercial property transactions in Great Britain, by region, 2017 and 2018, (value in £ million)
                                        • Figure 9: Commercial property transactions in Great Britain, by region, 2017 and 2018, (volume in units)
                                    • Market Forecast

                                      • New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
                                          • Figure 10: Forecast gross value of annual loan originations, 2019-2023, (£ billion)
                                        • Outstanding debt secured on property to continue rising
                                            • Figure 11: Forecast value of outstanding debt in loan books secured on UK commercial property, 2019-2023, (£ billion)
                                          • BPF plans aim to modernise commercial property and help improve productivity and growth
                                          • The Impact of the Economy

                                            • Annual GDP growth falls to six-year low in 2018
                                              • Figure 12: Annual GDP growth rate, 2014-2018, (%)
                                            • Bank rate remains at 0.75%
                                              • Figure 13: Bank rate, 2008-2018, by date of adjustment, (%)
                                            • Credit demand and availability falls in 2018
                                              • Figure 14: Availability of corporate credit to PNFCs in the past three months, Q1 2015 - Q1 2019, by business size, (net percentage balance)
                                              • Figure 15: Demand for corporate credit by PNFCs in the past three months, Q1 2015 - Q1 2019, by business size, (net percentage balance)
                                          • Market Trends

                                            • Commercial property investment falls for third time since 2014
                                                • Figure 16: Investment in UK commercial property, 2014-2018, (£ billion)
                                              • Commercial lending rates reach calendar year high in April, but remain largely stagnant in 2019 to date
                                                  • Figure 17: Average interest rate for UK MFI new advances to PNFCs, at April in 2015-2019, (% not seasonally adjusted)
                                              • Market Drivers

                                                • Commercial property transactions fall in 2018 but reach 11-year high in April 2019
                                                  • Figure 18: Number of non-residential property transactions, 2014-2018, (seasonally adjusted)
                                                • Write-offs on loans to non-financial companies fell to an eight-year low in 2017 but rebounded in 2018
                                                  • Figure 19: Write offs of loans to PNFCs from banks and building societies, 2014-18, (£ million, not seasonally adjusted)
                                                • Business confidence reaches a decade low at the start of 2019 with uncertainty affecting demand for finance
                                                  • Figure 20: Business confidence index, per half-year, Q2 2009 – Q2 2019, (index figure)
                                              • Companies and Brands – What You Need to Know

                                                • Specialist lenders launch new products targeting under-served sectors…
                                                  • … as well as in the buy-to-let market
                                                  • Industry Structure

                                                    • Changes in the structure of the industry
                                                      • Banks and building societies
                                                        • Figure 21: Analysis of changes in the structure of the banks and building societies sector, 2014-2018, (number of outlets and businesses)
                                                      • Financial leasing
                                                        • Figure 22: Analysis of changes in the structure of the financial leasing sector, 2014-2018, (number of outlets and businesses)
                                                      • Other credit granting
                                                        • Figure 23: Analysis of changes in the structure of the other credit granting sector, 2014-2018, (number of outlets and businesses)
                                                      • Structure by turnover
                                                        • Banks and building societies
                                                          • Figure 24: Analysis of the financial structure of the banks and building societies sector, 2017 and 2018, (turnover in £000 and number of companies)
                                                        • Financial leasing
                                                          • Figure 25: Analysis of the financial structure of the financial leasing sector, 2017 and 2018, (turnover in £000 and number of companies)
                                                        • Other credit granting
                                                          • Figure 26: Analysis of the financial structure of the other credit granting sector, 2017 and 2018, (turnover in £000 and number of companies)
                                                        • Structure by employment
                                                          • Banks and building societies
                                                            • Figure 27: Analysis of the employment structure of the banks and building societies sector, 2017 and 2018, (number of companies and % of total)
                                                          • Financial leasing
                                                            • Figure 28: Analysis of the employment structure of the financial leasing sector, 2017 and 2018, (number of companies and % of total)
                                                          • Other credit granting
                                                            • Figure 29: Analysis of the employment structure of the other credit granting sector, 2017 and 2018, (number of companies and % of total)
                                                        • Competitive Strategies

                                                          • Specialist lenders launch new products that target under-served sectors…
                                                            • … as well as the buy-to-let market
                                                            • Company Profiles

                                                              • Barclays PLC
                                                                • Recent company activity
                                                                  • Financial information
                                                                    • Figure 30: Financial analysis of Barclays plc, 2014-18, (£ million)
                                                                  • HSBC
                                                                    • Recent company activity
                                                                      • Financial information
                                                                        • Figure 31: Financial analysis of HSBC Bank plc, 2014-18, (£ million)
                                                                      • Lloyds Banking Group
                                                                        • Recent company activity
                                                                          • Financial information
                                                                            • Figure 32: Financial analysis of Lloyds Banking Group, 2014-18, (£ million)
                                                                          • Royal Bank of Scotland Group
                                                                            • Recent company activity
                                                                              • Financial information
                                                                                • Figure 33: Financial analysis of RBS Group, 2014-18, (£ million)
                                                                              • Santander UK Plc
                                                                                • Recent company activity
                                                                                  • Financial information
                                                                                    • Figure 34: Financial analysis of Santander UK plc, 2014-18, (£ million)
                                                                                • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                    • Abbreviations
                                                                                      • Methodology
                                                                                      • Further Sources and Contacts

                                                                                        • Trade associations
                                                                                          • Trade events

                                                                                          Commercial Mortgages - UK - July 2019

                                                                                          £995.00 (Excl.Tax)