Midlands: De Montfort University – UK Commercial Property Lending Market 2016 Report, Birmingham
The real estate investment market is experiencing a maturing but extended cycle with structural economic support due to very low interest rates. Historically we have seen high capital values driven by high leverage but today we have high capital values driven by equity with relatively low leverage. Despite conservative LTV levels, low property yields put pressure on interest rate coverage for prime property loans.
Total new origination volume was down by 17% year-on-year from 2015, including the demand for junior and mezzanine financing, leaving many lenders behind their annual targets.
The DMU property lending survey results for year-end 2016 will identify the latest market trends and potential structural changes looking at regional loan exposures, the expansion of alternative asset classes for secured lending, and new trends in development finance.
Following Nicole’s presentation, Emma Huepfl, Co-Principal of the Laxfield Group will discuss current conditions for borrowing to finance property, covering the following themes
➢ Current patterns of finance demand and what this signposts for lending in 2017
➢ Hotspots and cool spots in debt supply
➢ Biggest issues for borrowers and lenders in the current market