Legal & General: Banks are on the retreat


Banks are retreating form UK commercial property lending, a leading fund
manager has claimed.

Michael Barrie, head of balanced property funds at Legal & General
(L&G), has told CityWire the outlook for commercial property has
darkened recently.

"The primary element is balance sheet lending – banks are starting to
retreat, and are retreating on property faster than they are elsewhere,"
he said.

L&G had earlier predicted price losses could clear by the third quarter.
It has now suggested offices in London will offer minus two per cent
returns for the next five years.

"There is still an impasse between buyers and sellers. Buyers remain
quite nervous," said Mr Barrie, CityWire reported.

Overseas commercial property funds are keeping the market moving by
buying commercial property, while UK buyers wait for signs of further