UK banks lent £494m to commercial property in December, nearly reversing declines over the two previous months, according to data from the Bank of England.
Traditional lenders’ exposure to the sector rose for the first time since 2015, as property accounted for 7.3% of all outstanding debt in their loan books in December – up from a record low 7.2% in November.
The rise was underpinned by £684m lent to standing property during the month, the highest amount recorded in any of the final six months of 2016.
Net lending fell for two consecutive months: -£108m in October and -£447m in November.
However, Capital Economics said it was too early to see this as the start of sustained growth in the lending market.
Eduardo Gorab, property economist at Capital Economics, said: “With the investment market giving mixed signals about liquidity, and lenders still cautious about lending for development, we would not expect the latest figures to signal the beginning of a renewed upward trend in net lending.”
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