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Macro Real Estate

UK Private Credit Yields vs. Gilt Volatility: Q3 Strategy Report

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UK gilt yields have moved sharply this quarter, prompting renewed scrutiny of the spread private credit lenders command over government debt.

A widening, not a narrowing, spread

Contrary to some market commentary, the spread between senior secured property debt and comparable gilts has widened rather than compressed - a function of tighter underwriting standards among traditional lenders, not weaker demand for the underlying assets.

We expect this dynamic to persist through year-end, favouring disciplined, asset-backed lenders over generalist credit funds.