2020’s Cass UK Commercial Real Estate Lending Report highlighted COVID-19 as fuelling an increase in UK property loan defaults. It makes for concerning reading for those managing loan portfolios.
Real Estate Capital News reported the Cass findings to show that the absolute value of loans reported to be in default increased by 36% in 2019 and anticipates a further loan write-off and debt loss in the retail sector to be between £8-10 billion with a further £22 billion of outstanding commercial development loans at risk due to construction delays and defaults and £15 billion of residential development loans facing losses due to lower unit sale prices. (credit: Real Estate Capital News, recapitalnews.com).
These are figures akin to recession or outbreak of war and highlights a dilemma that is going to be faced across the economy – on the one hand liquidity and cash funding required to kickstart the engines and on the other massive scale of risk due to possible delays and defaults.
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As COVID fails to discriminate in the problems it causes our industry, it’s our time to provide smart solutions.