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Commercial Property News
UK commercial property under water by £50 billion say Savills
The commercial property sector in the UK is reported to be in negative equity of up to £50billion, says Savills.
William Newson, head of valuations at Savills commented that the amount of negative equity was estimated at around 22% of the £225billion of debt outstanding to commercial property.
Speaking at the estate agency’s 21st annual financing property event, Newson said that, based on investment property loans he estimated the level of negative equity was £38billion.
Furthermore, while it may not come as a surprise that property lending has dropped 41% from 2007 to only £38.25billion being secured for development property that is not income producing.Newson said the cost of funding loans was 200 basis points higher than it was three years ago as lenders become more risk-averse.
‘If this continues, and the gap between three-year swap rates and 10-year swap rates continues to rise it will have a major impact on property values,’ he told reporters.
However, Newson added that development lending he said the total of negative equity could be nearer £50billion.
William Newson, head of valuations at Savills commented that the amount of negative equity was estimated at around 22% of the £225billion of debt outstanding to commercial property.
Speaking at the estate agency’s 21st annual financing property event, Newson said that, based on investment property loans he estimated the level of negative equity was £38billion.
Furthermore, while it may not come as a surprise that property lending has dropped 41% from 2007 to only £38.25billion being secured for development property that is not income producing.Newson said the cost of funding loans was 200 basis points higher than it was three years ago as lenders become more risk-averse.
‘If this continues, and the gap between three-year swap rates and 10-year swap rates continues to rise it will have a major impact on property values,’ he told reporters.
However, Newson added that development lending he said the total of negative equity could be nearer £50billion.
Tue, 30th Jun 2009