Commercial Finance Specialists

Commercial mortgage debt to the tune of £50 billion is currently either being defaulted on or is breach of terms, it has been claimed.

UK property investment firms are currently defaulting or in breach of terms on some £50 billion worth of commercial mortgage debt, according to a new report.

The Commercial Property Lending Report produced by Leicester's De Montfort University has established that commercial lending has now reached a record high of £228.3 billion.

However, it is the defaulting debts, which make up nearly a fifth of that figure, which should be of serious concern to commercial development companies and the market as whole.

As the chief executive of the British Property Federation Liz Page told the Financial Times, the fact that state-owned banks own around £150 billion of these assets means these defaults become a major issue for taxpayers.

"It is absolutely essential that chancellor George Osborne gets a grip on the real size of the banks' loans to commercial property and looks to engage to work with the industry to ensure the problem does not worsen," she told the newspaper.

Posted by Lisa Fear.