New lending rose and outstanding debt on commercial real estate fell in the first half of this year, according to the half-yearly De Montfort Commercial Property Lending Report.

The report also found that outstanding debt fell to £171bn (€216bn) from £180.3bn at the end of last year.

A significant increase in new lending was also identified, with £19.6bn of new debt provided in the six-month period.

De Monfort said the figure was the highest total recorded by its study since 2008 and compares with £13.4bn in the same period last year.

The report said that, despite the increase, the UK was not “debt fuelled to the same extent as occurred before the financial crisis’’.

The UK commercial real estate sector is, it added, “most probably equity driven”.

Liz Peace, chief executive at the British Property Federation, said the outlook for debt finance to support the commercial property market was “very positive”.

“The steady reduction of outstanding debt – and of loans with dangerously high loan-to-value ratios – is very encouraging,” she said.

“Although new lending is growing at a significant rate, the fact the market seems to be mainly equity driven means  we are unlikely to be living through another 2007.”

The recovery, however, was felt unevenly across the UK.

Organisations are much more willing to lend against assets in London than elsewhere.

The report found that commercial real estate lending remained “polarised”, with significant differences in lending activity and appetite depending on location.

Of the organisations active in the market, 80% said they would lend on prime London investment projects, compared with less than half (46%) who would do so in Northern Ireland.

De Montfort said: “While lenders’ appetite for development risk is also improving, it remains a preserve for the specialist, particularly where the project is speculative.”

The report found that 26% of lenders were prepared to provide senior debt to finance such projects, compared with 12% at the halfway point of last year.

A wider range of lenders was also noted by the study, with UK banks and building societies accounting for less new origination.

De Montfort also found the volume of old, distressed loans or loans in breach of financial covenants had fallen.

Lenders are also more inclined to lend against investment properties rather than new development.

The amount of borrowers with loan-to-value ratios above 71% fell in the six-month period.