Almost £60bn of high-risk loans are still outstanding despite significant deleveraging efforts by UK property lenders in the past two years.
According to a paper from the Investment Property Forum, £59bn of outstanding debt has LTVs exceeding 70%, representing 37% of the De Montfort University-calculated UK outstanding debt pile.
The finding that almost 20% of all current commercial borrowers are still in negative equity comes after lenders shed £31bn of loans over the past 24 months.
This 20% cannot be refinanced on current market terms.
The paper warned that it may be up to five more years before this rump of lending falls to more “normal” levels.
bridget.o’connell@estatesgazette.com
