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Lending to commercial property (Aug.)

Net lending to property decreased for the third consecutive month in August, driven by falls in both lending for standing investment and development. Looking ahead, we think that tight credit conditions and the slow recovery in investment will weigh on lending to commercial property this year.
Sam Hall Assistant Property Economist
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UK Commercial Property Valuation Monitor

Valuations worsen to post-GFC low

Commercial property valuations worsened further in Q1 and now look overvalued. The spread between property and gilt yields narrowed to its lowest level post-GFC, but still has some distance to fall to reach the lows of 2007. With more interest rate hikes on the cards and gilt yields set to rise further, we expect property valuations to worsen over the next 12 months. See how UK commercial property valuations compare with the US and Europe on our new CE Interactive dashboard.

10 May 2022

UK Commercial Property Data Response

S&P Global/CIPS Construction PMI (Apr.)

The construction PMI for April showed that building activity remained solid, but that the pace of growth has slowed. An easing in new orders growth also hints at a further slowdown ahead, as the sector faces supply constraints, intensifying cost push pressures and higher costs of borrowing. UK Housing Drop-In (10th May 10:00 BST/17:00 SGT): Economists from our property team are hosting a 20-minute briefing to explain why we think UK house prices are heading for a fall – and how bad the fallout will be. Register now.

6 May 2022

UK Commercial Property Data Response

RICS Construction Market Survey (Q1)

The latest RICS Construction Survey indicated that activity in Q1 remained solid, while sentiment about for the next 12 months remained optimistic. But it also showed that labour and supply shortages are still hampering activity, while rising interest rates will further weigh on activity in the near term. UK Drop-In (5th May 10:30 EDT/15:30 BST): Our UK Economics team are holding a special 20-minute briefing to discuss the latest MPC decision and what it means for their outlook for UK growth, inflation and BoE policy. Register now

5 May 2022

More from Sam Hall

US Commercial Property Update

Three reasons why Chicago will emerge a winner

Chicago’s office market will not escape the gloomy outlook caused by the shift to remote working. But we expect the low level of rents, the small share of jobs in the information sector, and a dwindling supply pipeline to limit rental declines over the next few years more so than in the other major metros.

17 September 2021

US Commercial Property Data Response

US Metro Employment (Jul.)

Job growth showed no sign of slowing in July, with gains in the leisure & hospitality sector continuing to drive the recovery. This benefitted Boston, Washington D.C. and New York City significantly, but still left employment in the six major metros 5%-10% below their pre-COVID levels.

1 September 2021

US Housing Market Data Response

Mortgage Applications (Aug.)

With the share of households seeing now as a good time to buy at a record low, home purchase mortgage applications fell for the fifth consecutive month in August, leaving them down 25% from January’s 11-year high. But with the pace of declines slowing, we suspect mortgage applications will soon flatten out.

1 September 2021
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