Residential mortgage loans grew 7% during the pandemic
Despite the decline in total home loans in 2020, the proportion of loans focused solely on financing new residential developments has increased, according to data released by Sirius Property Finance.
Overall, UK home loans fell 23% in 2020, from Â£ 43.64bn in 2019 to Â£ 33.60bn in 2020, a direct result of the impact of the pandemic on industry and the economy at large.
Despite this decline, loans focused solely on financing new real estate developments, rather than those focused, for example, on the mortgage of existing property, have increased.
In 2019, new development finance loans totaled Â£ 8.7 billion. In 2020, that figure rose to Â£ 9.3 billion, an increase of 6.9%. The year 2020 also saw development financing increase in relation to their total share in all mortgage loans. Total 2019 development funding of Â£ 8.7bn was 19.9% ââof total industry lending that year, while 2020’s Â£ 9.3bn was 27.7% of the total.
As a result, the share of the pie allocated to financial development was 7.8% higher in 2020 than it was in 2019.
Nicholas Christofi, Managing Director of Sirius Property Finance, said: âAs the residential housing market has reached new highs during the pandemic, it is fair to say that commercial real estate has suffered the full brunt of the negative impact of COVID-19 due to the specter of working from home. night light and many blockages reducing the viability of main streets, bars and restaurants.
âHowever, the huge exception remains the residential real estate development finance space, as we have seen it expand considerably despite hesitation in other areas of the industry. It has been a difficult few years in the industry. together, but optimism is clearly in the air and lenders are increasingly convinced that financing new developments is a reliable and profitable investment.