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Home Economic Fundamentals UK Economic Lloyds Banking and RBS ready to back property sector
Lloyds Banking and RBS ready to back property sector PDF Print E-mail
UK Economic
Written by Will Peters   
Tuesday, 16 March 2010 11:07
However Savills says majority of property lending coming from overseas.



RBS (LON:RBS) and Lloyds Banking Group (LON:LLOY) - the two state backed lenders - are said to be warming to the property sector.

The sector has been maligned since onset of the credit crisis; the origins of which is of course rooted in the property sector.

The national press reports this morning that RBS and Lloyds Banking Group are but two of seven banks that have reopened their doors to the sector for the first time in two years.

Savills said that lending to the UK market remained dominated by overseas banks, with 60 per cent of those willing to lend more than £30m originating from Germany.

"Both banks have huge exposure to the sector, with a combined book of more than £100bn of outstanding loans, and hundreds of staff working on bad loans caused by the fall in property prices from their peak," reports the FT.

Savills will today publish its full list of 21 UK commercial property market lenders with an appetite to lend more than £30m.

There are no direct comparison figures with last year as Savills previously published a list of 23 lenders with ambitions to lend more than £20m - it has increased its definition of bigger ticket lending to £30m in recognition of the increased appetite for lending.

Many other lenders, including those no longer on Savills' big purchase list, continue to be active in smaller deals of more than £10m.

New additions to Savills' list are Aareal Bank, Bayerische Landesbank and Deutsche Bank, all of German origin.

Loan-to-values have increased and interest rate margins have decreased for better quality property investments, as lenders compete for business. This is a change from the past few years, when lenders increased margins and fees, and lowered LTVs in their bid to reduce risk.

Savills also reported that the provision of development finance has re-emerged. It has named Barclays, Close Brothers, Eurohypo, HSBC, Investec Lloyds Banking Group and RBS as organisations that would provide site acquisition finance and, in some cases, construction finance.
Last Updated ( Tuesday, 16 March 2010 11:10 )