Property investment news reveals defaults double in first half of 2009

Tuesday, December 08, 2009

Property investment news has revealed that defaults on commercial property loans have increased.

By Ashley Brunskill

Property investment news has revealed that the amount of commercial property loans in the UK which are in default doubled in the first half of 2009.

The latest De Montfort bank lending survey has revealed that £30 billion of loans have breached the financial agreements that were put in place. £18.6 billion are in breach of covenants and £11.8 billion are in default, reports Property Week.

Despite this, the number of active banks has increased, the survey revealed. The number of banks willing to lend money has risen from 73 per cent to 87 per cent.

New lending was limited, at £7.4 billionn for the first half of the year compared to £49 billion for the whole of 2008. Just 12 banks made up 83 per cent of the lending, with UK lenders commanding a 58 per cent market share.

It was recently reported that a £31.5 million deal will see the Gatehouse Bank take ownership of the 109,290 sq ft grade A office and conference facility of Procter and Gamble.

Source: ask-re The Property People LLP