The Debt Market – Changes, Opportunities and Benefits
The availability of debt in the commercial real estate market has gone through significant changes over the past 10 years. In the years running up to the financial crisis, real estate debt grew to record volumes.
According to a banking survey compiled by Capital Economics, outstanding commercial mortgage debt rose from just under £50 billion in the year 2000 to roughly £250 billion during the peak of the market in early 2008. This growth was driven by an increase in loan-to-value (LTV) ratios and a relaxation of underwriting standards resulting in some very poor quality loans.