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UK Commercial Mortgages market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Commercial Mortgages market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Report Coverage

This report focuses on the UK commercial mortgage market, though market size data includes all lending secured by commercial property, including refinancing.

This report will explore the following key issues regarding the UK commercial mortgage market:

  • What have been the key determinants 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?

Market Segmentation

  • Offices
  • Retail (shops, supermarkets, shopping centres and out-of-town retail warehouses)
  • Industrial (warehouses and factories)
  • Leisure (restaurants, pubs, cinemas, gyms and hotels)

Company Profiles

  • Aldermore Bank
  • Barclays PLC
  • HSBC
  • Lloyds Banking Group
  • Principality Building Society
  • Royal Bank of Scotland Group
  • Santander UK PLC
  • Shawbrook Bank

Expert analysis from a specialist in the field

Written by Marco Amasanti, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

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

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Table of contents

  1. Overview

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

          • The market
            • Market reveals resilience in 2017
              • Figure 1: Value of New loans in the UK Commercial Mortgage market, £ billion, 2013-2017
            • Growth underpinned by office and industrial sectors, while retail continues to struggle
              • Figure 2: Owner occupied and invested commercial property value, % of total, 2013-2017
            • Commercial property borrowing expected to maintain resilience
              • Non-bank lenders continue to grow in prominence
                • Figure 3: New loans value allocation by lender category, 2016 and 2017
              • Companies and brands
                • Extensive restructuring of businesses
                  • What we think
                  • Issues and Insights

                    • Brexit uncertainties
                      • The facts
                        • The implications
                          • Decline of retail
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Market recovers in 2017
                                  • Growing divide between struggling retail and growing industrial and office sectors
                                    • Non-bank lenders continue to consolidate
                                      • Commercial property investment recover strongly in 2017
                                        • Commercial property borrowing outlook remains cautiously optimistic
                                        • Market Size

                                          • Methodology
                                            • New lending remained stable in 2017
                                              • Figure 5: Value of New loans in the UK Commercial Mortgages market, £ billion, 2013-2017
                                            • Total outstanding debt falls slightly
                                              • Figure 6: Value of outstanding loan books, £ billion, 2013-2017
                                          • Category Market Share

                                            • Non-banks continue to grow increasingly prominent in new lending
                                              • Figure 7: Value of New loans in UK Commercial Mortgages market, allocation by lender category, 2016 and 2017
                                            • Outstanding debt remains stable
                                              • Figure 8: Debt allocation, by lender category, 2016 and 2017
                                            • London dominates but the regions are expected to grow
                                              • Figure 9: Geographic distribution of loan books, % of total, 2017
                                            • Offices remain the largest sector
                                              • Figure 10: Property type distribution of loan books, % of total, 2017
                                          • Market Segmentation

                                            • Growing divide between struggling retail and growing industrial and office sectors
                                              • Figure 11: Owner occupied and invested commercial property value, % of total, 2017
                                              • Figure 12: Owner occupied and invested commercial property value, % of total, 2013-2017
                                            • Falling need for retail property
                                              • London continues to dominate offices sector despite increased uptake in the regions
                                                • Figure 13: Value of office property, by region, 2017
                                              • Industrial demand strongest performer of 2017
                                                • Growth in leisure and student housing drive growth in other commercial
                                                • Market Forecast

                                                  • Commercial borrowing expected to maintain steady minor growth
                                                    • Figure 14: Market forecast for commercial property capital value, 2013-2022
                                                  • Offices and industrial expected to maintain popularity, while retail will continue to struggle
                                                      • Figure 15: Forecasted segmentation of the UK Commercial Property market, 2018-2022
                                                    • Interest rate growth
                                                      • Boosted interest in the regions
                                                      • The Impact of the Economy

                                                        • Interest rates
                                                          • Availability of credit
                                                          • Market Trends

                                                            • Commercial property investment recovered in 2017
                                                                • Figure 16: Investment in UK commercial property, £ billion, 2013-2017
                                                              • Commercial lending rates rose in 2017 following 2016 dip
                                                                  • Figure 17: Average interest rate for UK MFI new advances to PNFCs, %, MAY 2016-April 2018
                                                                • Availability of credit remained largely stable in 2017
                                                                    • Figure 18: Availability of corporate credit to PNFCs in the last three months, net % balance, Q1 2012-Q1 2018
                                                                • Market Drivers

                                                                  • Foreign Investment
                                                                    • Shift among residential landlords to commercial investment
                                                                      • Growing uptake among local authorities
                                                                      • Companies and Brands – What You Need to Know

                                                                        • Extensive restructuring of businesses
                                                                          • Infrastructure decline in the past year
                                                                            • Operators move online
                                                                            • Industry Structure

                                                                              • Changes in the structure of the industry
                                                                                  • Figure 19: Analysis of the changes in the structure of the banks and building societies sector, number of outlets and businesses, 2013-2017
                                                                                  • Figure 20: Analysis of the changes in the structure of the financial leasing sector, number of outlets and businesses, 2013-2017
                                                                                  • Figure 21: Analysis of the changes in the structure of the other credit granting sector, number of outlets and businesses, 2013-2017
                                                                                • Structure by turnover
                                                                                  • Figure 22: Analysis of the financial structure of the banks and building societies sector, 2016 and 2017
                                                                                  • Figure 23: Analysis of the financial structure of financial leasing sector, 2016 and 2017
                                                                                  • Figure 24: Analysis of the financial structure of other credit granting sector, 2016 and 2017
                                                                                • Structure by employment
                                                                                  • Figure 25: Analysis of the employment structure of the banks and building societies sector, 2016 and 2017
                                                                                  • Figure 26: Analysis of the employment structure of the financial leasing sector, 2016 and 2017
                                                                                  • Figure 27: Analysis of the employment structure of the other credit granting sector, 2016 and 2017
                                                                              • Company Profiles

                                                                                • Barclays PLC
                                                                                    • Figure 28: Financial analysis of Barclays PLC, 2013-2017
                                                                                  • HSBC
                                                                                      • Figure 29: Financial analysis of HSBC, £ million, 2013-2017
                                                                                    • Lloyds Banking Group
                                                                                        • Figure 30: Financial analysis of Lloyds Banking Group, £ million, 2013-2017
                                                                                      • Royal Bank of Scotland Group
                                                                                          • Figure 31: Financial analysis of Royal Bank of Scotland Group, £ million, 2013-2017
                                                                                        • Santander UK Plc
                                                                                            • Figure 32: Financial analysis of Santander UK Plc, £ million, 2013-2017
                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                            • Abbreviations
                                                                                              • Methodology
                                                                                              • Further Sources and Contacts

                                                                                                • Trade associations
                                                                                                  • Trade magazines
                                                                                                    • Trade events