End of downturn for business mortgage holders?

20 August 2009

Written by David Whittaker

There are some sure signs that the commercial property market in the UK is nearing the bottom of its downturn, according to Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors.

Business mortgage holders will be among those looking for improvements in their assets in the coming months, following a period that has seen the sector drop by nearly 50 per cent in value since the beginning of the financial crisis.

"Yields have started to stabilise and have even fallen back on some prime property assets in recent months," Mr Gilmartin explained, before adding that there are now fewer concerns regarding rental downturn.

He also suggested that as the industry improves, a two-tier market may appear whereby investors discriminate between prime and non-prime assets - something that did not occur regularly during the commercial property sector's boom period.

Earlier this month, CB Richard Ellis reported that July's UK commercial property saw total returns increase for the first time since June 2007.

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