Commercial mortgage lending fell last year

03 March 2011

Written by Steve Olejnik

Banks cut their lending of commercial mortgages last year, it has been reported.

Bloomberg stated that falls in property prices are behind the trend, while the Property Industry Alliance group recently told the Bank of England that the global recession has left financial institutions more wary about providing loans.

The four largest banks in the UK - Royal Bank of Scotland, HSBC Holdings, Barclays and Lloyds Banking Group - reduced the amount they lent in commercial mortgages in 2010.

Between them, the financial institutions provided £17.9 billion less to business property purchasers than they did in 2009.

Co-author of the Property Industry Alliance's report and head of property at Aegon Asset Management in Edinburgh Phil Clark told the news provider: "These numbers show that banks have been far more active than people think in reducing their loan exposure to real estate."

This follows recent rumours that Barclays is to stop lending commercial mortgages and will be selling its Barclays Capital Mortgage Servicing arm.

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