FSA “underestimated” lending problems
The Financial Services Authority has “underestimated” the extent of the problems facing the commercial property sector with regard to lending, says primary and special servicer Hatfield Philips.
The FSA’s Financial Risk Outlook 2010, published earlier this month, does not “stress the real severity of the issues faced by the banks”. Hatfield Philips also warns that the government’s desire to force UK banks to lend more may not be realisable until the economy recovers.
Stewart Hotston, director of compliance and reporting at Hatfield Philips, said: “The problems facing the commercial property market are severe. The questions facing lenders are not simply about lending more debt but whether they can afford to lend, whether the market can sustain more debt and just how quickly the economy will recover.”
“Successfully emerging from this recession will need a more considered approach and should demonstrate that both balance sheet lenders and the CMBS market are managing their way through the problem.”
