Speculative projects face credit squeeze

European lenders are once more putting the brakes on funding for speculative property developments due to fresh market jitters and concerns about Basel II requirements, according to new a report by consultant EC Harris.

The survey found almost half of property lenders at European banks are likely to either lend less or maintain the same level of lending over the next five years. Nearly all of the lenders questioned said they were more likely to lend to projects that were pre-let rather than speculative as these guaranteed cash flow.

The survey further highlights the current ‘crisis of confidence’ amongst European banks, according to Matthew Cutts, head of lenders and investors at EC Harris.

The full article appears in the October edition of PropertyEU Magazine. Click on the link below to subscribe.