Demand for commercial property "firm" - commercial mortgages

21 January 2008

Demand for commercial property is still "firm", the Royal Institution of Chartered Surveyors (Rics) has said.

The comment was made as Rics responded to the news on Friday that Scottish Equitable had placed a 12-month embargo on withdrawals from its investment fund.

Stating that the situation of funds blocking such transactions was not a unique scenario in cases in which there was a shortage of market liquidity, Rics chief economist Simon Rubinsohn emphasised that the situation had arisen after a period of considerable strength in the market.

He added: "Crucially, occupier demand for property still remains firm and while the economy is set to slow, there are few signs of the recession that would undermine this vital prop for the market," comments which may reassure those with commercial mortgages.

Today Scottish Widows announced that it too would be suspending withdrawals from its fund.

It said redemptions, transfers and switches of funds could not be undertaken without such transactions being delayed by 180 days each.

Exceptions are being made for monies being paid for eventualities such as retirement, death and the maturing of policies.