the loans engine

The revival of commercial and semi-commercial mortgages



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Commercial lending is truly back this year.

Throughout the pandemic, lending appetite and capacity was constrained due to the risks and uncertainties related to so many sectors and businesses. Threats of short notice lockdowns, changing consumer trends to online shopping reducing demand for retail units, and tenant protections around rent arrears/evictions all created a challenging lending environment.

Commercial lending went from a cornerstone of the specialist lending sector to a market drastically impacted by the unintended consequences of many Covid-19 measures introduced by the government.

So, what has changed in 2022? Established industry providers, such as Interbay and Together are extending their criteria and showing great appetite to lend. In addition, some newer lenders, such as Allica Bank, are helping to create a rebound in the fortunes of commercial property investors and owner occupiers.

What we’ve seen in recent months is a rapid increase in products, great expansion in criteria, and competitive pricing that makes investing to let, or buying to owner operate, both back as viable options for clients.

Emily Hollands, head of specialist finance at InterBay, commented: “The pandemic situation was unprecedented, so it was incredibly difficult to predict the impact it would have on the commercial market. 

“Interbay continued lending throughout 2021, but it was necessary to restrict some of our lending policy. 

“Over the past 12months, we’ve seen the market stabilize and demand increase for commercial assets.

“Our research shows us that the macros are strong, and that’s why we made a significant number of improvements to our lending criteria and interest rates.”

Michael Mann, BDM at Allica Bank, added: “Without a large back book of loans, Allica was fortunate to keep its doors wide open to help the many businesses that boomed during the pandemic.

“We saw a renewed demand among business owners to get a greater handle on their monthly cashflow by purchasing their premises, or to diversify their income streams by investing in property. 

“As restrictions ease and stability returns, I can only see this increasing.”

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