Following the vote in favour of Brexit, 95% of banks are still lending in the UK: brisk activity continues despite the referendum result, according to the European Lending Trends survey, which is being released Wednesday at Expo Real 2016.
The Cushman & Wakefield report finds that across the continent lending conditions remain positive and the outlook is bright, with over 80% of lenders reporting an increase in originations and refinancing in the next six months.
'There has been no change in the UK after Brexit, the fears of a negative impact have not materialised,' said Nigel Almond, head of EMEA capital markets research at Cushman & Wakefield. 'What we have seen is a shift in sentiment, with LTVs falling from 65% before the referendum to around 60% now.'
LTVs have fallen across Europe and are now all below 60%, ranging from 59% in London, Amsterdam, Paris and Frankfurt to 53% in Milan. Since January this year, margins have risen by an average 50bps across Europe.
Risk aversion is still a big factor in the market, with a clear focus on prime and non-prime standing investments in top tier markets and a lot of activity at the lower end of the market, In lower-tier markets there is a marked preference for better quality assets, with more appetite to provide development finance on pre-let schemes. Very few lenders are willing to finance speculative development, the survey finds. 'People are more cautious and they focus on long-term secure income,' said Almond. 'That’s where the demand is.'
