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Savills reports on increased bank lending – if you’re a developer

March 23rd, 2010

An increasing number of banks are willing to underwrite “big ticket” property loans and development finance is available for the first time since the downturn began, according to Savills.There are 21 lenders willing to lend £30m and upwards to new clients on new deals, compared to 23 banks that were willing to lend only £20m in October of 2009.

Savills said the new additions to its list are Aareal Bank, Bayerische Landesbank and Deutsche Bank, all German lenders. Savills pointed out that German lenders dominate the list accounting for 60%.

Development finance is also back on the agenda, with Savills naming seven banks willing to lend against prelet development: Barclays, Close Brothers, Eurohypo, HSBC, Investec, Lloyds Banking Group and Royal Bank
of Scotland.

A problem for lenders in the current market is the fact that the amount of cash currently targeting prime property means that there are very few deals for banks to lend against, Savills said. As a consequence, for better quality properties loan to value ratios have increased and interest rate margins have decreased.

William Newsom, Savills UK head of valuation, said: “I am very pleasantly surprised by the number of lenders who are prepared to provide development finance, mostly for residential schemes. In the late 1990s the development finance markets were closed for half a dozen years. In this cycle we have seen the market reopen again after only two years albeit on very cautious terms.”

The bank lending list comprises: Aareal Bank, Aviva, Bank of London and Middle East, Barclays Bank, Bayerische Landesbank, Canada Life, Deka Bank, Deutsche Bank, Deutsche Pfandbriefbank, Deutsche Postbank, D G Hyp, Eurohypo, Helaba, ING Real Estate Finance, Landesbank Baden-Wurttemberg, Landesbank Berlin, Lloyds Banking Group, Nord LS/Deutsche Hypo, Royal Bank of Scotland, Santander, Westdeutsche Immobilienbank

Original article: http://www.egi.co.uk/articles/2010/03/16/714883/MIPIM-2010-Savills-reports-on-increased-bank-lending.htm?cp=EMC-EGI-MIPIMNEWSTUE

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