COMMERCIAL MORTGAGES - UK - JULY 2019

COMMERCIAL MORTGAGES - UK - JULY 2019

Jul 2019 Mintel Industry ProfileN/A Price :
$ 995

Market Segmentation

  • UK Banks & Building Societies
  • Other Non-Bank
  • Other Lenders
  • German Banks
  • Insurers

Company Profiles

  • Barclays PLC
  • HSBC
  • Lloyds Banking Group
  • Royal Bank of Scotland Group
  • Santander UK PLC

“Given the volatility of commercial borrowing and the wider financial climate, projections for the value of the commercial mortgages market are heavily dependent on broader economic factors and the outcome of Brexit, which remains uncertain following the second extension of the Article 50 deadline and the possibility of another general election after the change in prime minister.”

Table of contents
OVERVIEW
What you need to know
Covered in this Report
EXECUTIVE SUMMARY
The market
New lending rose by 11% in 2018
Figure 1: Gross value of annual loan originations, 2014-2018, (£ billion)
Total outstanding debt rises to five-year high
Figure 2: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2014-2018, (£ billion)
New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
Figure 3: Forecast gross value of annual loan originations, 2019-2023, (£ billion)
Outstanding debt secured on property to continue rising
Figure 4: Forecast value of outstanding debt in loan books secured on UK commercial property, 2019-2023, (£ billion)
What we think
ISSUES AND INSIGHTS
Brexit impasse and uncertainty causing changes to mortgage lending strategies
The facts
The implications
Empty and unused properties in London could offer new opportunities
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
New lending rose by 11% in 2018
Total outstanding debt rises to five-year high
New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
MARKET SIZE
Methodology
New lending rose by 11% in 2018
Figure 5: Gross value of annual loan originations, 2014-2018, (£ billion)
Total outstanding debt rises to five-year high
Figure 6: Aggregated value of outstanding debt in loan books secured on UK commercial property, 2014-2018, (£ billion)
CATEGORY MARKET SHARE
Non-banks continue to grow presence in new lending
Figure 7: Gross value of loan originations, by allocation, 2017 and 2018, (% of total)
REGIONAL ANALYSIS
London and South East account for over 60% of transaction value and are home to a third of all completed transactions
Figure 8: Commercial property transactions in Great Britain, by region, 2017 and 2018, (value in £ million)
Figure 9: Commercial property transactions in Great Britain, by region, 2017 and 2018, (volume in units)
MARKET FORECAST
New loan originations to climb by 27% to 2023 but will not reach pre-2008 levels
Figure 10: Forecast gross value of annual loan originations, 2019-2023, (£ billion)
Outstanding debt secured on property to continue rising
Figure 11: Forecast value of outstanding debt in loan books secured on UK commercial property, 2019-2023, (£ billion)
BPF plans aim to modernise commercial property and help improve productivity and growth
THE IMPACT OF THE ECONOMY
Annual GDP growth falls to six-year low in 2018
Figure 12: Annual GDP growth rate, 2014-2018, (%)
Bank rate remains at 0.75%
Figure 13: Bank rate, 2008-2018, by date of adjustment, (%)
Credit demand and availability falls in 2018
Figure 14: Availability of corporate credit to PNFCs in the past three months, Q1 2015 - Q1 2019, by business size, (net percentage balance)
Figure 15: Demand for corporate credit by PNFCs in the past three months, Q1 2015 - Q1 2019, by business size, (net percentage balance)
MARKET TRENDS
Commercial property investment falls for third time since 2014
Figure 16: Investment in UK commercial property, 2014-2018, (£ billion)
Commercial lending rates reach calendar year high in April, but remain largely stagnant in 2019 to date
Figure 17: Average interest rate for UK MFI new advances to PNFCs, at April in 2015-2019, (% not seasonally adjusted)
MARKET DRIVERS
Commercial property transactions fall in 2018 but reach 11-year high in April 2019
Figure 18: Number of non-residential property transactions, 2014-2018, (seasonally adjusted)
Write-offs on loans to non-financial companies fell to an eight-year low in 2017 but rebounded in 2018
Figure 19: Write offs of loans to PNFCs from banks and building societies, 2014-18, (£ million, not seasonally adjusted)
Business confidence reaches a decade low at the start of 2019 with uncertainty affecting demand for finance
Figure 20: Business confidence index, per half-year, Q2 2009 – Q2 2019, (index figure)
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Specialist lenders launch new products targeting under-served sectors…
… as well as in the buy-to-let market
INDUSTRY STRUCTURE
Changes in the structure of the industry
Banks and building societies
Figure 21: Analysis of changes in the structure of the banks and building societies sector, 2014-2018, (number of outlets and businesses)
Financial leasing
Figure 22: Analysis of changes in the structure of the financial leasing sector, 2014-2018, (number of outlets and businesses)
Other credit granting
Figure 23: Analysis of changes in the structure of the other credit granting sector, 2014-2018, (number of outlets and businesses)
Structure by turnover
Banks and building societies
Figure 24: Analysis of the financial structure of the banks and building societies sector, 2017 and 2018, (turnover in £000 and number of companies)
Financial leasing
Figure 25: Analysis of the financial structure of the financial leasing sector, 2017 and 2018, (turnover in £000 and number of companies)
Other credit granting
Figure 26: Analysis of the financial structure of the other credit granting sector, 2017 and 2018, (turnover in £000 and number of companies)
Structure by employment
Banks and building societies
Figure 27: Analysis of the employment structure of the banks and building societies sector, 2017 and 2018, (number of companies and % of total)
Financial leasing
Figure 28: Analysis of the employment structure of the financial leasing sector, 2017 and 2018, (number of companies and % of total)
Other credit granting
Figure 29: Analysis of the employment structure of the other credit granting sector, 2017 and 2018, (number of companies and % of total)
COMPETITIVE STRATEGIES
Specialist lenders launch new products that target under-served sectors…
… as well as the buy-to-let market
COMPANY PROFILES
Barclays PLC
Recent company activity
Financial information
Figure 30: Financial analysis of Barclays plc, 2014-18, (£ million)
HSBC
Recent company activity
Financial information
Figure 31: Financial analysis of HSBC Bank plc, 2014-18, (£ million)
Lloyds Banking Group
Recent company activity
Financial information
Figure 32: Financial analysis of Lloyds Banking Group, 2014-18, (£ million)
Royal Bank of Scotland Group
Recent company activity
Financial information
Figure 33: Financial analysis of RBS Group, 2014-18, (£ million)
Santander UK Plc
Recent company activity
Financial information
Figure 34: Financial analysis of Santander UK plc, 2014-18, (£ million)
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Methodology
FURTHER SOURCES AND CONTACTS
Trade associations
Trade events

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