INNES ENGLAND SPONSOR NOTTINGHAM LAUNCH OF PROPERTY LENDING SURVEY
The annual Commercial Property Lending Survey for 2008 conducted by De Montfort University confirms the impact of the Credit Crunch on the property lending market.
The findings were presented to a range of property professionals and developers from the East Midlands at an Investment Property Forum seminar held at the Nottingham Science Park in early June, sponsored by Innes England.
Bill Maxted, Senior Lecturer and Consultant in the Faculty of Business and Law at De Montfort University, Leicester and author of the report, said: “During the next five years 69% of all outstanding debt is due for repayment, equivalent to £170 billion. Not surprisingly the level of defaulting loans has risen substantially from £798 million in 2007 to £3.134 billion in 2008, which represents almost a fourfold increase by value.”
David Smith, Midlands IPF Board member said: “The problems of loan to value covenant breaches, caused by the dramatic fall in commercial property values, have not had the serious impact that might have been expected since lenders and borrowers have in most cases been able to come to acceptable arrangements. This has been helped by many borrowers being able to continue providing the requisite level of interest cover. With concerns about the wider economy deepening in 2009, we are now seeing interest cover come under growing pressure, posing a new challenge to the delicate balance between occupiers, landlords and lenders.“
Matthew Hannah, Director at Innes England’s Nottingham offices added: “Data from the 2008 De Montfort Survey has never been more useful than it is today given the significance of commercial property lending in the current market. The data provides an invaluable source of material for the industry. It can help analyse just what is happening in the market, and what needs to be done to ensure that commercial real estate continues to fulfil its important role as an asset class within the economy, and recognise its position as a key source of collateral for loan finance.“
For further information contact Matthew Hannah
Tel: 0115 924 3243