Data issued from a recent survey carried out by Jones Lang LaSalle has found the major UK banks are still unwilling to lend for tentative property development before the end of 2011.
This survey?s results could mean the recovery by the property market may be hindered as property buyers face difficulties in making purchases and companies find refinancing difficult. Currently, there is more than ?250 billion of debt unpaid to the sector, according to a news report from The Daily Telegraph?s website.
The worth of various commercial properties including shops, offices and warehouses has fallen by 44 per cent between June 2007 and July 2009. This has fuelled the standpoint of major mortgage and financial lenders.
The Lenders? Expectation report, the first carried out by Jones Lang LaSalle, established that only asset-rich banks are in a situation to lend. It also highlights, however, that confidence in the property market has increased as commercial property has risen in value over the last two years.
Director in Jones Lang LaSalle?s City investment team, Andrew Hawkins said: ?Assuming current levels of demand, product scarcity will persist, maintaining downward pressure on yields.?
At the moment, 35 per cent of those surveyed will offer financial assistance of between ?25 million and ?50 million, 30 per cent will make loans of between ?50 million and ?100 million, and just 16 per cent will lend between ?10 million and ?25 million. The hope will be that with values of commercial properties steadily rising, the amount of money lent to the property sector will gradually increase along with buyers? confidence.
