Lenders of commercial mortgages 'more lenient'

09 June 2010

Providers of commercial mortgages now have a "slightly more lenient attitude" toward portfolio investors, it has been claimed.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, stated that the market is recovering, with a rise in capital values seeing an increase in optimism in the industry.

However, most lending is being made to holders of prime properties, he said, such as parts of London where foreign speculation is more common.

The Investment Property Databank recently reported that capital growth from commercial property had increased by 0.8 per cent in April, showing a slowdown since the sector's rebound at the end of 2009.

Meanwhile, mortgage providers are still wary of investments without evidence of strong potential, Mr Rubinsohn noted.

"Unless the property looks to be particularly well underpinned in terms of rental growth [with] good occupiers, there is going to be a challenge in actually getting the finance for the purchase," he explained.

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