'Difficult lending environment' for commercial mortgages

15 September 2011

Written by Jenny Barrett

People looking for a commercial mortgage will have to get used to a more difficult climate when accessing finance, one expert has said.

Legal & General Investment Management's (LGIM) head of commercial lending Ashley Goldblatt explained the market is different to how it was in the "heady days of the mid-2000s".

At this time, "property prices rose inexorably and tenants were in plentiful supply", he added.

The expert claimed that banks were willing to provide individuals with commercial mortgages, particularly when the assets were used as security.

Now, many organisations have withdrawn any attempts to provide cash to investors and 43 per cent of lending institutions did not engage in origination activity during 2010, he declared in LGIM's most recent Fundamentals edition.

People looking for financial assistance to purchase commercial real estate are "left wanting", due to a growing unwillingness or inability by financial institutions to provide cash, Mr Goldblatt asserted.

He stated: "Borrowers will have to adjust to a dramatically different lending environment."

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