Outstanding loans to property development fell 7% among UK banks in 2016 as traditional lenders took extra caution toward commercial property.
About £14.8bn of loans to development was outstanding at the end of December 2016, down from £16bn a year before.
Although there was a small rise to £15.2bn in the months following the EU referendum, the number dropped back down to July levels at the end of the year.
UK banks’ lending to development and standing property as a whole also fell steadily as a proportion to their total loan books in 2016.
In January, property made up 7.5% of banks’ outstanding loan book but that fell to a record low 7.2% in November before a slight bounce back to 7.3% in December.
Despite the small rise, lending to development shrunk by £190m that month.
Liam Brooke, co-founder of peer-to-peer lending platform Saving Stream, said: “There is a wealth of good investment opportunities out there and although banks may be paring down lending in the sector, it is business as usual for alternative finance providers.
“Despite Brexit, the advantages of investing in UK property remain in place. Interest rates are likely to stay low, while the UK’s housing shortage is unlikely to be resolved any time soon.”
Between February and December, Saving Stream’s loan book more than doubled from £100m to £242m with 75 new loans.
Its biggest loan was a £15m facility for a conversion of the Sunbeam motorcycle factory in Wolverhampton into flats.
OUTSTANDING LOANS TO PROPERTY IN FIGURES
Value of outstanding loans to property developers, UK banks (£m) |
|
|---|---|
| December 15 | 15,970 |
| January 16 | 15,971 |
| February 16 | 16,742 |
| March 16 | 14,967 |
| April 16 | 14,865 |
| May 16 | 14,834 |
| June 16 | 14,828 |
| July 16 | 14,894 |
| August 16 | 14,806 |
| September 16 | 15,203 |
| October 16 | 15,198 |
| November 16 | 15,215 |
| December 16 | 14,838 |
LENDING TO COMMERCIAL PROPERTY (£m) |
|||
|---|---|---|---|
| Lending to standing property | Lending to new development | Net lending | |
| January 16 | -472 | 4 | -468 |
| February 16 | 1,158 | -22 | 1,136 |
| March 16 | 1,655 | -206 | 1,449 |
| April 16 | -142 | -48 | -190 |
| May 16 | 294 | 227 | 521 |
| June 16 | 996 | 13 | 1,009 |
| July 16 | 98 | 89 | 187 |
| August 16 | -210 | -66 | -276 |
| September 16 | 388 | 39 | 427 |
| October 16 | -125 | 17 | -108 |
| November 16 | -485 | 38 | -447 |
| December 16 | 684 | -190 | 494 |
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