Just £2.7bn of funding was reported, well short of the £5.7bn in August 2008. Funding for commercial buy-to-let mortgages has dropped by 88% from £3bn in 2008 to £476m in 2009, while funding for bridging loans fell 77% from £836m to £190m. Some members reported an 85% drop in business year-on-year.
Adam Tyler, chief executive of the NACFB, said the figures revealed a shocking picture of the struggling commercial sector and the impact of the recession on commercial brokers.
He added: “The current economic woes hit commercial mortgage brokers a few months ago and brokers in other areas of commercial finance have started to struggle.”
Rob Lankey, head of lending at specialist lender Aldermore, said the drop in funding was due to the exit of commercial mortgage lenders who relied on a securitisation model which has dried up.
He said: “Falling property values, rising arrears and business failures led to nervousness about the commercial market.”
Kelvin Davidson, property economist at Capital Economics, said the figures tied in with its belowaverage expectations for commercial property.
He added: “We believe banks will keep their lending low for the foreseeable future, causing a shortage of finance in the commercial sector, which will affect its ability to recover and grow.”
