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News Release

London

Q1 2009 Bank of England Lending Figures Remain Static



London, 11th May 2009 – The Bank of England lending figures published for Q1 2009 show that the rate of growth in bank lending in sterling to real estate over Q1 2009 slowed significantly.  Total lending grew by £1.3bn this quarter to £244bn (including lending by building societies) compared to £3bn growth last quarter, a drop of over 50% quarter on quarter.
Jeremy Handley, director in Jones Lang LaSalle’s Valuation Advisory team said; “The figures show that new lending on Real Estate remains very difficult, with little more that a handful of banks active in the market for the most secure cashflows.  This combined with no CMBS market and rolled up interest in some situations has contributed to the slight increase in outstanding debt.”
Barry Osilaja, director in Jones Lang LaSalle’s Corporate Finance team added; “We do not expect a dramatic change during the next quarter or indeed until liquidity in the debt markets improves, or banks start to restructure or make provisions for distressed debt more aggressively.  The reality is that as banks start to take a impairment charges for non-performing loans, the UK’s Real Estate debt loan book will reduce dramatically, assuming banks realistically reflect their debt situations.  The Asset Protection Scheme is likely to limit changes to the existing Real Estate debt books of those banks that participate.”