Bank warned of loan defaults
A coalition of leading property organisations has handed the Bank of England a stark warning over the £55bn of real estate loans and mortgages that need to be refinanced this year.
The Bank of England property forum, chaired by Ian Marcus, a Credit Suisse investment banker, was presented with the Property Industry Alliance report at its quarterly meeting on Friday, which was attended by about 40 people.
A source close to property financing said the report was a "scene-setter", and was designed to show the Bank of England how desperately new lending needed to be freed up in the real estate market. Without improved liquidity, it is feared there could be a swathe of loan repayment defaults.
"CMBS [commercial mortgaged-backed securitisation, a key form of property loan] has been pretty much a closed shop since the Lehman Brothers investment bank went under two years ago," said the source.
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