LONDON (Reuters) - New loans by banks and insurers to commercial property in Britain totalled 17.6 billion pounds in the first half of 2017, down 24 percent compared with the second half of 2016, according to a survey published on Wednesday.
Commercial property lending also fell by 18 percent compared with the first half of 2016, the survey from De Montfort University showed.
Investors have been concerned about the health of Britain’s commercial property market since the country’s Brexit vote in June last year.
Commercial property funds totalling around 18 billion pounds stopped trading for several weeks after the vote when retail investors who feared property prices would collapse demanded their money back.
The survey found that fewer commercial properties are being financed by debt, and lenders are concerned about the economic situation in Britain.
“North American banks were the most concerned about the market situation, considering all aspects from property market fundamentals, Brexit and a potential interest rate rise,” it said.
The Bank of England is widely expected to raise interest rates next month.
Lending by U.S. banks dropped 28 percent and insurance companies cut lending by 39 percent, the survey showed.
Non-bank lenders, such as asset managers, increased lending by 9 percent from end-2016.
A total of 42 percent of new loans were to properties in central London.
“The research is consistent with anecdotal reports of a market that is quiet in terms of transactions but mostly functioning,” Peter Cosmetatos, chief executive of Commercial Real Estate Finance Council Europe, said.
Total outstanding property debt was 211 billion pounds at end-June, the survey said.
De Montfort surveyed 78 lenders, of which 43 were banks and building societies, 11 insurers and 24 other non-bank lenders.
Reporting by Carolyn Cohn. Editing by Jane Merriman