The first Lenders’ Expectation survey conducted by Jones Lang LaSalle revealed that only a few of the well-capitalized banks in the UK are able and willing to lend more than £100 million to commercial property.
Since commercial property values experienced a huge drop of more than 40 percent from June 2007 to July 2009, it appears that most lenders are taking the utmost caution in dealing with the commercial property sector.
The survey shows that 12 percent of banks would lend more than £100 million to commercial property, 35 percent are prepared to arrange loans of around £25 million to £50 million, and 30 percent of banks would lend between £50 million and £100 million.
The results of the survey indicates that it could take some time before lending to the sector will recover. This is despite the continuous rising of its values.
Currently, outstanding debt in the commercial property sector is more than £250 billion, which could be the possible reason why most of the banks surveyed said they would make loans available for development until the end of next year.