The two main effects of the crisis that are still influencing property investing are that mainstream banks are more cautious about lending, and investors are careful about taking on too much debt.
Thanks to cautious lending by mainstream banks, there has been an increase in alternative lenders offering bridging loans and commercial mortgages. In 2008 non-bank lending was 5%. In 2017 it had risen to 25%.
According to the Cass UK Commercial Lending Report, loan to value levels on commercial mortgages have dropped from a high of 74% in 2009, to 32% in 2017. This reflects investors being cautious about the level of debt they take on.
Financial regulators want to avoid another financial crisis. One of the issues in achieving this is finding accurate data about property lending. Many lenders are not transparent about their data. The Bank of England wants better data so that they can monitor property lending. An initiative by the Property Industry Alliance (PIA) wants all lenders to pool data.
The PIA says that accurate data can help predict a financial crisis:
“If lenders and regulators had had access to suitable long-term value metrics leading up to the 2007 crash, they could have anticipated the extent to which commercial property was becoming overvalued and seen that a major crash was looming.”