The FT reports that UK commercial property developers are facing far higher costs and may have to scrap projects outside London because of new capital rules being imposed on banks by the FSA.
It comes after the regulator announced plans to enforce a method of “slotting” – where banks categorise their property loans into one of four levels of risk – in a bid to improve financial stability. Property companies have insisted the move will increase the gap in values between buildings in London and those in the regions.
Source: Financial Times
We say: Our advice would be: Property Companies: check the dates of your upcoming loan/facility renewals and get them sorted now before the slotting regime comes into play…you don’t want to be one of the first “computer says no” cases just for the sake of a few months’ wait….