Commercial property ''price is right'' - commercial mortgages

04 April 2008

In news that may interest those thinking of taking out commercial mortgages, an industry expert has suggested that the recent dip in values has left commercial property in the UK more appropriately priced.

Ed Stansfield, property economist at Capital Economics, said he was largely in agreement with the notion that such property is now "much more fairly valued".

Such a view holds "a fair amount of water", he commented.

The last few months have seen a significant drop in commercial property prices, although the view of Mr Stansfield may hint at a suggestion that the preceding rise in values went too high and required correction.

While the recent property decline has been linked with wider economic problems in the wake of the credit crunch, the situation in the stock markets may bring many investors back into the commercial property market, it has been suggested.

Real estate lawyer Jonathan Wright of law firm Reed Smith Richards Butler told the Birmingham Post that overseas investors were looking at UK property as a more stable alternative to stocks and shares in a time of volatile financial markets.

"The big German funds are also coming back to the UK property market again, because the yields have begun to look more attractive to them," he added.