Bank lending still difficult.  LTVs and interest cover restrictive, lending margins still high and based on Libor. Typical cost of money 7+%. Banks syndicating less, but ‘clubbing’ together on bigger loans.  Three month LIBOR remains high at 5.85% compared to 5.0% base rate, unlikely to fall by more than 10-20 bps by year-end.

De Montfort University survey shows significant rise in loan defaults in 2007. Recent Investec survey found almost 90% of property professionals expect further rises in 2008.

CCRE view: Benign bank lending conditions unlikely to return for another 8-12 months. Clear signs of slowing growth. UK economy now facing significant downside risks. Strong inflation will constrain potential for cutting interest rates this year.

Read the full report below:

CCRE Property Snapshot June 08

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