Lending to commercial property (Apr. 24)

Following two consecutive quarters of declines, net lending to property reached £891m in April. But looking through the monthly volatility, net lending totalled just £692m over the past three months, a 14-month low. A rise in interest rates is likely to be behind investors’ caution, with the 5-year swap recently increasing to 4.5%, the highest since November last year. But we still think rates will fall back over the second half of the year, driving a modest recovery in lending and investment.