Crunch time for the UK property sector

Despite signs of recovery in the UK property sector, both commercial and domestic, there are concerns that over the next five years we could see something of a liquidity crunch in the UK commercial property market. It is believed that banks were forced to waive certain conditions attached to property company loans in the aftermath of the credit crunch, although there is potentially around £160 billion worth of commercial property debt to be refinanced over the next five years.

There are growing concerns that a number of banks may well decide not to renew these property loans despite the fact that the UK property sector has shown signs of recovery of late. If this was the case then we would see a significant amount of commercial property up for sale in the UK which could cause a drag on the ongoing recovery. Indeed recently we saw signs of concern regarding the UK market with UK giant Hammerson suggesting it would look to the French market in the short to medium term because of a "choppy" UK market.

The damage caused by the credit crunch and resulting recession will only really emerge over the next decade and there are certain to be many shocks in store in the future.