EXPO REAL 2016: Lenders are being more cautious in the UK market than they may be stating according to Marco Rampin, CBRE’s head of Europe debt and structured finance.
In the wake of the result of the EU referendum lenders have become more conservative in both the loan-to-value rates and margins they are offering.
“The lending environment in the UK has undoubtedly slowed down quite considerably following the result of the vote. Most lenders came out with relatively reassuring ‘business as usual’ statements, other than increased prudence in terms of underwriting,” he said.
“The reality is that we have seen more prudence that people have admitted and declared, transferred into a market value decline that was anticipated but not necessarily contextualised by facts and transactions. This has been resulting in lower LTVs and slightly higher margins to senior lending… We have not seen a particular freeze on lending but lower LTVs and more rigorous underwriting of transactions.”
With margins increasing and some clearing banks becoming more conservative, there could be potential for alternative lenders to become more active but Rampin said that thus far this had not been borne out.
“For some, immediately it was a benefit for dollar-based or even Euro-based investors. Apart from these short-term benefits, people are concerned, and it is too early to say whether there will be an inflow of foreign capital in the debt space as a result of this because the uncertainty is a more determining factor in making everyone a little more cautious.”
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