BoE data shows lender appetites are increasing – Jones Lang LaSalle
Recent data from the Bank of England shows a growing willingness among lenders to finance commercial property deals. Jones Lang LaSalle notes that the Q1 2013 lending figures from the BoE report that UK bank exposure to real estate remained stable at 8.2% of all debt, despite the continued deleveraging by UK banks.
Peter Clarke, head of Jones Lang LaSalle’s valuation advisory team in Birmingham, says lender appetite for financing commercial property in Birmingham is increasing – not only among the main high-street banks, but also among more specialised lenders. He notes that some lenders are taking advantage of the Funding For Lending scheme, which has been extended by 12 months. JLL feels this may help to “further underpin the market recovery”.
There have been a number of prime Birmingham office property sales, he notes, where investor interest has been strong, but he feels the debt market is now being constrained by a lack of investment transactions – a reversal of the conditions seen earlier in the current cycle. “What is perhaps holding back the debt market is the unwillingness from some owners to consider a sale unless they are forced; there is a perception that values will improve and a better return could potentially be realised,” he adds.
Property investors are also seeking secondary stock at discounted values, as a result of the weight of money seeking a home, where an attractive annual return can be obtained, he adds. Most banks are unwilling to lend on this type of property, he notes.
