Are You Being Strangled?

Fiona Mellor

27th April, 2012.

Are You Being Strangled?

By Fiona Mellor, Valuation.

As much by way of a commentary on issues in the economy overall but so very relevant to the property market was a headline from the business pages of The Times on 24 April 2012 that read:-

“’Horrific’ collapse in lending strangles hopes for recovery”

The article stated that ‘the most relentless squeeze on record is stifling companies’ ability to invest and derailing Britain’s fading recovery hopes’ according to business warnings.

The indicator for this ‘collapse in lending’ was a Bank of England report “Trends in lending” which showed lending to companies plunged by £4 billion in February.

It begged the question in my mind “is someone not pushing the money or is someone not pulling for the money?  So often when we have chatted to the Commercial Banking contacts we have, they often say that there just isn’t the demand for people and companies to borrow money.  If there was the demand ‘we would lend’ is a regular comment.

A quote from the chief economist at the British Chambers of Commerce says radical action from government may be needed that includes ‘introducing a bank that lends to SME’s.

As a business our valuation work for Banks and Institutions for loan security has been very busy especially since Christmas.  It may be anecdotal but our experience is pointing to possibly more lending than at any point of the last 4 years in the property sector.

This seems to be a combination of customers switching banks, as well as a dawning realisation from banks on their existing loan books that the market we are in is here to stay, and “you may as well tell us the bad news”, as opposed to them relying on outdated valuations from the past.

Questions of which particular clients are busy lending; what rates of interest are being charged; what are required loans to value etc are all there for debate and discussion another day.

If you need advice in connection with any valuation issues then contact the team at Harris Lamb.


Fiona specialises in the valuation of commercial property and land. If you would like to speak to her, please call 0121 455 9455 or email fiona.mellor@harrislamb.com.

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