Commercial property investors in the United Kingdom are prepared to take on more debt for new transactions as the market recovery heats up.
The average loan-to-value ratio sought by investors increased to 58.3 per cent in Q3 of the year from 43.6 per cent in the Q1 of 2013 as more sales were finalised and confidence increased that financing would be available, according to a report released by Laxfield Capital.
Demand for mortgages is spreading and moving away from what have traditionally been thought of as “safe-haven assets,” the report notes.
Emma Huepfl, of the mortgage firm, said that they are seeing new lending opportunities presenting themselves in the regions, as well as “an overall confidence in the availability of real estate finance.”
U.K commercial real estate values rose for the sixth month in a row in October as the country’s economic recovery continued to gain pace, according to Investment Property Databank (IPD).
The greatest demand for financing in 2013 has come from the office building sector, with a total of 36.8 per cent of all requests by value. Buyers of stores and shopping malls followed at 22 per cent, according to Laxfield.
The company analyzed a total of £25 billion of commercial property loan requests in 2013 as part of its first report tracking demand.
According to the report, Laxfield has originated and managed over £500 million in commercial mortgages this year.
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