UK - Property investors are willing to borrow given the right terms, but they're still not convinced the UK market is cheap enough to buy in, according to Jones Lang LaSalle.

JeremyHandley, director at JLL, told IPE Real Estate: "It's much more difficult to borrow but, if they can get the terms, investors will borrow. There isn't a reluctance to borrow - it's a reluctance to buy."

Central bank figures show there was sustained bank lending to the property sector in the first three month of 2008, as there was a £9bn (€11.3bn) increase in lending to £202.2bn by the end of that quarter. Real estate accounted for 11% of overall lending and most of that was new, rather than recycled, debt.

Handleysaid the increase was evidence that "lending is still happening, though at reduced levels".

"It's difficult to categorise lending," said Handley. "Securitised lenders are not lending at all. Banks are cautious when they're choosing borrowers. Balance-sheet lenders are lending, where there is capacity, because they were initially priced out of the market or inactive at the start of the market growth."

Jones Lang LaSalle forecasts  there will be a short-term increase in lending figures as securitised lenders temporarily exit the market and balance-sheet lenders pick up the slack.

The weight of investment in the UK real estate market is currently coming from German banks and "private investors, mainly from Ireland and the Middle East", he suggested.

However, in the main, both debt and non-debt investors are waiting out volatility in the market.

"Borrowers are willing to take a long-term view on London and the UK more generally. They're opportunistic to a degree - there has been a yield shift and the market is looking cheaper than it did, but it still isn't particularly cheap," said Handley.

"There's equity looking to come into the market when the time is right, but for most that is not now."

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