Office interior lending 'not likely to grow'

Office design news from Morgan Lovell

Published on 08-10-2009

Banks are unlikely to extend their lending facilities for office interior and commercial property space, one financial expert has argued.

Despite talk of a recovery within the modern office design sector, Kelvin Davidson, property economist at Capital Economics, said lenders are unwilling to expose themselves to any further risk given their present loan book situations in regards to commercial property.

He commented: "Banks still have a particularly high exposure to commercial property. The share of their loan books accounted for by property is currently at about 12 per cent, which is higher than it is has ever been within the last 40 years."

According to a recent Savills report, 23 financial institutions were willing to lend in excess of £20 million for commercial property deals in the second half of 2009, compared to 12 institutions prepared to lend more than £25 million in the first half of the year.