A new report by real estate experts Cushman & Wakefield surveyed 50 European banks and found that most of the respondents (95%) will still offer commercial mortgages for UK borrowers purchasing commercial property, reported PropertyWeek.com in October 2016.
Following the June vote to leave the European Union, some feared that this would result in non-British banks refusing to lend to UK borrowers. The volume of loans was down in the first six months of 2016, but this was true across Europe and was probably not caused by Brexit.
The report is optimistic about the future, with four fifths of lenders expecting loan levels to either remain the same or increase during the next few months.
A director of Cushman & Wakefield, Edward Daubeney said:
“Our survey shows that Brexit is having little impact on market sentiment from a lending perspective and the fundamentals remain encouraging. There remains a clear focus on good quality, well-let assets with lenders more focused on increasing lending on pre-let developments in second tier cities over secondary assets. Where development finance is available, it’s for pre-let developments with experienced developers.”
The report showed that loan-to-value rates have fallen below 60%.
Interest rates on commercial mortgages remain low. The Bank of England recently reduced its base interest rate and Peter Praet, chief economist of the European Central Bank said that the bank is committed to low interest rates until his inflation goals are met, according to an October 2016 article on Greek news website TornosNews.gr. This means that commercial mortgage interest rates should not rise significantly in the near future.