UP TO £48 billion worth of loans backing UK commercial property are in breach of financial covenants or in default, according to a report by De Montfort University.
Researchers warned that the “property boom loans were coming home to roost” and that the situation is set to deteriorate further if the value of property continues to decline.
The total value of outstanding debt on UK commercial property, including “big ticket” items such as Ireland’s “bad bank” Nama, stood at £285bn at mid-year 2012, having reduced £12bn in the same period.