Commercial Finance Specialists

Real estate lending remains as restricted now as the period following the Lehman Brothers collapse, notes Jones Lang LaSalle.

The latest Bank of England quarterly lending figures show lending to have fallen 22% from last year to £188 billion. The proportion of real estate lending as a percentage of total lending remained unchanged at 9% from the first quarter of 2011.

Jeremy Handley, of Jones Lang LaSalle, reports that the freeze was not unexpected and that it reflects the stagnant UK market.

"Real estate workouts are taking longer than in 2010 and earlier this year, and this has very much been a feature of the sector since Q1 2011", he noted.

The situation is not likely to change either, he suggested, until lenders receive reassurance on the current situation in the eurozone. "Lending in the secondary/riskier end of the market is unlikely to restart until there is more confidence in both the wider financial markets and also signs of economic stability and growth."

JLL have reported signs that banks are starting to investigate their loan book sales. Barry Osilaja, European director of corporate finance at Jones Lang LaSalle, added that "we are yet to see any significant deleveraging come through in the bank lending figures. Deleveraging should be occurring in the secondary markets but activity in the sub-prime market in Q3 2011 was almost non-existent."

Are you seeking sources of corporate finance, such as commercial mortgages or bridging loans, in the wake of these tighter lending conditions? Why not contact us to see if we can clinch your deal?