Lending to property developers falls post-Brexit
By |Published On: 13th February 2017|

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Lending to property developers falls post-Brexit

By |Published On: 13th February 2017|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

A new report from peer-to-peer lending platform Saving Stream has revealed that amount lent by banks to property developers slipped in the month leading to the Brexit vote.

What’s more, it appears that this has also struggled to recover as banks cut lending to the sector as a whole.

Lending Falls

Data from the investigation shows that the amount lent by banks to developers has slipped by 7% year-on-year, from £16bn outstanding in December 2015 to £14.8bn in December last year.

Saving Stream said that the value of loans outstanding in the sector fell substantially in the run up to the Brexit vote. Values fell from £16bn in December 2015 to £14.8bn in June, with figures not recovering in the last seven months.

This fall in lending to developers is reflective of the on-going uncertainty around the Brexit decision and its subsequent impact on the UK property market.

Some economists have forecasted that consumer spending will fall later this later, with business confidence also waning. As a result, the willingness of banks to lend to developers has slipped.

Lending to property developers falls post-Brexit

Lending to property developers falls post-Brexit


The reluctance of traditional banks to lend is subsequently leading to more opportunities for alternative lenders, such as peer-to-peer platforms. This alternative platform is allowing investors and developers to invest in new asset purchases through liquidity.

Liam Brooke, Co-Founder of Saving Stream, noted: ‘Brexit uncertainty has hit property developers hard over the last year as traditional sources of funding tighten their belts.’[1]

‘There is a wealth of good investment opportunities out there and although banks may be paring down lending in the sector, it’s business as usual for alternative finance providers. Despite Brexit, the advantages of investing in UK property remain in place. Interest rates are likely to stay low, whilst the UK’s housing shortage is unlikely to be resolved any time soon,’ Brooke added.[1]




[1] http://www.propertyreporter.co.uk/finance/lending-to-property-developers-struggles-to-recover-post-brexit.htm

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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