Commercial property used as security against business loans is being under-valued, it has been claimed.
Many banks are under-valuing commercial properties when considering them as security for business loans, it is claimed.
According to the Forum of Private Business (FPB), this means that many companies are left with high interest rates - sometimes even double what a firm would normally expect to pay.
Commercial development assets are being under-valued because of a lack of clear data surrounding the
property investment market, suggests the FPB property advisor Andrew Bacon of Leaseholders United.
"This has left many valuers with inadequate market data that, given economic conditions, will make them more pessimistic resulting in lower valuations on commercial properties," he explained.
The group suggests that 74 per cent of companies taking secured loans are doing so against a commercial development asset.
Research from Reita has indicated that the number of independent financial advisers who are expecting UK commercial property prices to fall has increased since the start of the year, to 24 per cent.
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