Commercial mortgages 'more readily available'

10 June 2011

Written by Gavin Elley

Commercial mortgages are increasingly likely to be lent outside of the prime London market, according to the latest Savills Financing Property report.

However, the company estimates there is still debt of £350 billion in the UK's commercial property market, significantly more than previous industry valuations had found.

The firm stated that only 25 per cent of this is for prime property and the rest is secured against secondary and tertiary premises.

Issues involving loan books and loan-to-value (LTV) breaches still exist, but banks have considered their options and are adopting a more cautious outlook, the report continued.

William Newson, head of valuation for the enterprise, said that "the market is awash with equity, including a new wave of mezzanine providers".

These will use low LTV ratios to "bridge the gap between senior debt and equity", he claimed.

"Now is the time for the market to rediscover the joys of grade B product," head of commercial research at Savills Mat Oakley declared.

This follows a recent survey from CB Richard Ellis, which found the level of demand for offices in central London over May outperformed the rest of the country.

Find out more on our commercial mortgages and how we can help you achieve your aims - enquire online.