The Cass UK Commercial Lending Data, released today, shows total loan book size of non-bank lenders (excluding insurance companies) has increased by 22.7% from 2016 to year end 2017.
These findings support the trend that started following the financial crisis, namely that specialist lenders, who can provide fast and flexible financing often at far higher LTVs than traditional banks, but at increasingly competitive pricing, look set to continue to grow their market share.
We see no sign, either anecdotally or elsewhere, that the regulatory challenges hindering traditional banks will abate in the near future. Banks are becoming utilities and, like the utilities in the power sector, are failing to provide acceptable levels of customer service. Unless they make fundamental changes to the way they do business, they will eventually go the way of the dinosaurs.
With the UK economy in good shape, lending volumes buoyant, and the threat of a significant interest rate rise in 2018 receding, we remain confident that the appetite for a range of debt financing from alternative lenders like Octopus Property will continue to grow during 2018.
