Commercial mortgage market may need huge shift in attitudes

18 November 2010

Written by Steve Olejnik

The commercial mortgage market may need providers to approach lending to businesses differently if it is to pick up, as one expert believes banks are not taking enough risk when providing loans.

Federation of Small Businesses (FSB) spokesman Stephen Alambritis told the Financial Times he thought it would take "a huge shift in thinking" for institutions to stop being overcautious.

"The screen is much more attractive to the new breed of branch managers rather than meeting across a table," he added.

Furthermore, the expert did not believe lenders would be fully capitalised again until 2015.

Steve Pateman, head of UK corporate and commercial banking at Santander, appeared to agree with Mr Alambritis, telling the same news provider he thought it could take five or six years for banks to focus on lending to viable businesses rather than relying on credit rating data and computerised risk models.

This comes after Justin Cooke, chair of the British Interactive Media Association, asserted the government needs to encourage further lending to businesses in order to support economic growth.

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