European banks are most cautious about lending on development in the UK, Ireland and France, said CB Richard Ellis in a report today.
In the report, CBRE analysed lending trends among banks across 19 countries and found that, although almost all banks are more cautious about lending in light of the credit crunch, the extent of their attitude varies widely between countries and institutions.
Lenders were most cautious about the property markets of the UK, Ireland and France amid fears of continuing valuation falls, but less concerned about Austria and the Nordics where lending practices have seen only ‘relatively minor changes.’
Richard Holberton, director of CBRE research and consultancy for Europe, the Middle East and Africa, said: ‘It has become clear that European banks have become more cautious about development finance, but this caution is manifested in different ways in different markets.’
‘Local market conditions and lending practices matter greatly.
'For instance, in some markets such as some of the Nordic countries, bank attitudes to real estate lending were already relatively cautious, often to the extent of excluding speculative development lending.
‘However other jurisdictions have seen larger shifts.
'In several, notably France, the main response of lenders has been to focus lending much more tightly on the best developers and the best locations – not necessarily on more demanding terms – and to impose much more stringent conditions on others, or refuse facilities outright.’