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Rics: Commercial property lending 'more lenient'
Commercial property lending is now easier to access than it has been for a year, it has been claimed.
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, stated: "We are seeing a slightly more lenient attitude from lenders."
They are more flexible at the moment, which may be a result of improvements in certain aspects of the property market, he continued.
Mr Rubinsohn's comments follow a report from NB Real Estate, based on figures from the Bank of England.
A £727 million increase in lending to UK commercial real estate sector was noted in the first quarter of this year, compared with the previous three months.
It is the first time a net rise has occurred since quarter one of 2009, the report revealed.
However, while business properties may be seeing more leniency, there are still differences between the current climate and the products available before the recession, Mr Rubinsohn explained.
"It doesn't sound to me that we are going back to the cavalier lending that was perhaps characteristic of the latter part of the previous cycle, but there is a bit more finance there," he added.
The improvement in leniency could be due to rising capital values in properties - particularly those in London - which has encouraged optimism among lenders giving funds against property, stated Mr Rubinsohn.
Last month, experts questioned whether commercial property pricing could continue to rise at the rate it has done in recent months.
Malcolm Hunt, head of UK client services at the Investment Property Databank, predicted a more "sedate" rate would ensue, after a "rapid bounce back" at the end of 2009.
On May 18th the organisation reported a 0.8 per cent rise in capital growth, which was the slowest rate since August last year.
Mr Rubinsohn said the UK has now seen the early stages of recovery in the property market, but the nature of the recession and recovery means expectations about what would happen have not always been accurate.
Posted by Sarah Smith
Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, stated: "We are seeing a slightly more lenient attitude from lenders."
They are more flexible at the moment, which may be a result of improvements in certain aspects of the property market, he continued.
Mr Rubinsohn's comments follow a report from NB Real Estate, based on figures from the Bank of England.
A £727 million increase in lending to UK commercial real estate sector was noted in the first quarter of this year, compared with the previous three months.
It is the first time a net rise has occurred since quarter one of 2009, the report revealed.
However, while business properties may be seeing more leniency, there are still differences between the current climate and the products available before the recession, Mr Rubinsohn explained.
"It doesn't sound to me that we are going back to the cavalier lending that was perhaps characteristic of the latter part of the previous cycle, but there is a bit more finance there," he added.
The improvement in leniency could be due to rising capital values in properties - particularly those in London - which has encouraged optimism among lenders giving funds against property, stated Mr Rubinsohn.
Last month, experts questioned whether commercial property pricing could continue to rise at the rate it has done in recent months.
Malcolm Hunt, head of UK client services at the Investment Property Databank, predicted a more "sedate" rate would ensue, after a "rapid bounce back" at the end of 2009.
On May 18th the organisation reported a 0.8 per cent rise in capital growth, which was the slowest rate since August last year.
Mr Rubinsohn said the UK has now seen the early stages of recovery in the property market, but the nature of the recession and recovery means expectations about what would happen have not always been accurate.
Posted by Sarah Smith
Thu, 10th Jun 2010