How are lenders reacting to the current economic situation?
High street lenders
The main Banks have definitely toned down their appetite. A number have virtually closed their doors to new loans. Others have reduced the scope and level of their appetite. In short lenders are more cautious.
Buy to let lenders and challenger Banks
These lenders have made some modifications to appetite. However, they are generally still keen to lend, particularly on residential and semi commercial investment property.
Commercial Investment property
This is more challenging. A new lender (Allica bank) has been making waves in the market, and there are other niche Banks that are still keen to lend. We have recently been involved in placing an £8M shopping centre for which we had two Banks interested.
CBILs (coronavirus Business Interruption Loan Scheme)
This scheme was recently extended until the end of January 2021. Note that Property Investors can also use this scheme to support property purchases. So for example we have a lender funding a commercial property purchase with 40% traditional real estate loan, and a further 20% “top up” loan via CBILs. That means the loan is free of fees and zero interest for the first year. There are a number of permutations of this scheme for developers and investors. Please get in touch with us at Key to discuss your needs.