Around £50 billion worth of commercial property is about to be sold by UK banks, it has been claimed.
UK banks are readying themselves to dump £50 billion worth of
commercial development assets from their balance sheets, it has been claimed.
A study by Leicester's De Montfort University earlier this year showed that British commercial property currently accounts for some £300 billion of banking loans, with £50 billion in breach of covenant.
Now, banks are getting ready to shed these huge burdens, according to the Daily Telegraph.
At the height of the boom, commercial
property investment counted for between 11 and 12 per cent of bank balance sheets, yet this should be closer to five or six per cent to be healthy, the paper claims.
The Financial Services Authority has insisted that the period of boom and bust in the sector must come to an end, so the effect of these mass sales on commercial property values is likely to be significant for some time, the article concludes.
PNB Paribas recently claimed that UK commercial property values will take 15 years to return to their pre-recession highs.
Posted by Allan Flowers.
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