German Banks Lead UK Commercial Market

German banks may have been more cautious with their lending during the property boom of 2007 representing only 3 of the leading top 20 lenders. However, their actions then seem to have enabled them to grow in dominance now if recent statistics are to be taken into consideration…

According to studies by popular property website Savills on the UK commercial property market, of the 21 lenders willing to offer property investors more than £30m to invest in property, 13 (62%) are believed to be German.

Many property advisors are attributing this increase in dominance from the Germans as a consequence of the outstanding £225bn debt against the UK property market. UK, Irish and US lenders are all believed to be heading up this debt following losses of up to 44% in their capital values during the last 2 years which have resulted in serious writedowns.

Yet by being less aggressive in their lending approach, German banks have been proven to be one of the few banks who managed to continue lending strongly throughout the recession…

Lenders believed to be included on this list for increased lending are: the Deutsche Bank, Aareal Bank and Bayerische. Only the Royal Bank of Scotland and Lloyds TSB managed to get on the list from the UK.

However, despite these limited lending opportunities, positive signs from the property development sector have prompted encouraging signs that other banks will soon follow suite, offering finance to property developers, even if it is on cautious terms.

Original Article

More About the Author

Peter Franklin, Property Mentor Delegate

I used to believe stocks and shares were the only way forward, yet after 15 years of property investing, neither of these can compare with the sheer velocity or impact that property investment can have on your bank account. Only with property can you truly experience the power of being in control of immediate cash flow AND capital appreciation. Stocks and shares simply cannot compete. Read more