Much new activity is expected to be witnessed in prime commercial space locations like Canary Wharf owing to a number of factors influencing both economy and the fortunes of the major players who are involved in many aspects of real estate deals. Many new deals are being discussed by prime players in real estate markets, leading to this prediction.

During the recession, the real estate market was hit by a double whammy of sorts by falling property value and recession hit banks and financial institutions. As developers rely significantly on such lenders, many of their projects were halted for lack of funding. This led to a lack of good quality premises in the commercial sector. This has led to greater demand now for prime desk space London properties.

However, this is not all. A lot of foreign interest is being shown in the UK real estate sector with funds flowing in from countries outside. These factors have boosted fortunes here.

Where sellers are concerned, the recession left many investors unable to pay back loans. The typical loan to value ratio being 75%, falling property value have wrought havoc with the lending and borrowing mechanism. Borrowers are looking at selling assets if they can recoup some of their loan value.

While banks and financial institutions do not prefer to foreclose on properties, selling may be the better option for them too. The recession left their funds severely restricted, and if sales bring in much needed liquidity, banks will only be too glad to take the extreme step.

With these factors and with the dangers of legal repercussion of loan contract breaches, borrowers are leaning towards selling their properties rather that defaulting on loans. According to HSBC, about 86% of the loans issued after 2004 may not be recoverable.

This entry was posted on Wednesday, January 6th, 2010 at 9:19 am and is filed under Business Performance, Public Relations, Realty Management. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.