Commercial mortgage market 'growing'

27 May 2010

Written by Simon Whittaker

The UK's commercial mortgage market looks to be showing signs of growth, if new figures are anything to go by.

According to recent research by the Investment Property Databank, commercial property capital growth continued to increase in April - rising by 0.8 per cent, although this was the slowest rate of growth since last August.

Meanwhile, over the past ten months, the UK has seen 14 per cent positive capital growth, with Malcolm Hunt, head of UK client services at the firm, saying that the rapid bounce back witnessed at the end of last year has now given way to a more "sedate" pace of expansion.

Commenting on the research, Mat Oakley, head of commercial research at Savills, said that over the next six months to two years there is likely to be a reversion to normality.

He added that prime assets - whether long-term secure income streams or rental opportunities - will also see prices rise, placing them in a position where "yields are supported by the rental growth expectations".

"The market is certainly pausing for breath at the moment," Mr Oakley concluded.

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