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FPB: Banks undervaluing commercial properties

Date Added: 19/08/2010  

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More businesses may be forced to seek company debt advice in Leeds if Britain's banks continue to undervalue commercial premises, the Forum of Private Business (FPB) has suggested.

The business body has claimed some financial institutions are using dishonest valuations of property as grounds to tie companies to excessive interest rates or exclude them from taking out loans altogether.

"One of the root causes of the crisis of lending on commercial property is the lack of transparency in the UK's commercial property market," said Andrew Bacon of LeaseholdersUnited. "Creating transparency is by no means simple."

He claimed valuers have been left with "inadequate" statistics relating to the property market, which could cause considerable gloom among entrepreneurs and hamper the government's attempts to boost lending to smaller firms.

Last month, research carried out by the FPB found that although small business credit increased by £75 million between May and June, it was still down by £269 million on June 2009.

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