December 31, 2008

Commercial properties to cost banks £70 billion

It looks as if the UK banking industry are preparing for a £70 million hit, this time it is down the loans that they have issued against commercial property, up until now the commercial property sector has not been in the picture, but that is all about to change.

Some banks are predicting that commercial property values have fallen considerably over year and by the end of 2009, there is probably going to be a drop of up to sixty per cent when compared to the figures produce in 2007.

However, this is causing problems for the banks, as not so long ago they were offering anything up to ninety five per cent of the value of the commercial property. With the drop in prices as predicted, this is going to mean a lot of commercial property out there that is worth a lot less than the loans secured on it.

Source [Agent Cities]