Property adviser Savills expects some of the eurozone banks in its list of big-ticket lenders to the UK property market to be replaced by UK institutions in the future and others by insurance companies benefiting from the Solvency II regulations.

The firm’s latest list of 16 ‘most active bigger ticket lenders’, published on the first day of EXPO REAL, shows no change in the line-up compared with the previous list issued in June. It is the first time in 10 years that the list has not changed, Savills said. The firm defines ‘most active bigger ticket lenders’ as those that are both actively seeking and have actually achieved total new lending over the previous six months of at least £75 mln (EUR 87 mln) in typical loan sizes of above £20 mln. ‘The last quarter has seen limited new lending activity with no direct evidence to suggest new trends emerging,’ said William Newsom, Savills UK head of valuation. ‘If this continues, we may find a number of banks withdrawing or downscaling activity, but the only evidence of this at the present time is anecdotal.’

Newsom said that the last three months had seen considerable volatility across financial markets, with a particular focus on the eurozone. ‘It is significant that of the top 16 lenders, 12 are based in the eurozone,’ he noted. ‘Once the way forward is clearer, I am expecting some of the eurozone lenders to be replaced by UK lenders (despite the Vickers report) and others by insurance companies benefiting from Solvency II.’

The Vickers report, published by the Independent Commission on Banking in September, says that Britain's biggest banks should be given until 2019 to implement radical reform of their operations to prevent another taxpayer bailout of the system. It calls on banks to ringfence their high street banking businesses from their ‘casino’ investment banking arms in a bid to return to healthy business operations.

The proposed Solvency II regulation will require European insurance companies to keep considerably more capital on their books to meet obligations to policy holders, absorb any unexpected losses and reduce the risk of insolvency. However, it may also make lending to real estate - as a long-term, stable asset class - more attractive.

‘There are quite a number of increasingly active emerging lenders such as Handlesbanken,’ Newsom said, adding: ‘We are also seeing increasing activity from Clydesdale, Coutts, HSBC and Nationwide Building Society, none of whom were listed in the top 16 in June. The next six months will be a fascinating period as we see the impact of Basel III, Greece, Vickers and bank deleveraging emerge.’


Top 16 active bigger ticket property lenders
Aareal Eurohypo
Aviva Helaba
Barclays Bank ING REF
Bayern LB Landesbank Berlin
Deka Bank Met Life
Deutsche Bank Royal Bank of Scotland
Deutsche Hypo Santander
Deutsche Pfandbrief Société Générále