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Cheap Money Helps Property Investment Market Defy Gravity

LONDON-Property lending is continuing at historically high levels, with the market sustained by the low cost of money, according to a new survey from FPDSavills. And more of the same can be expected for the rest of 2003.

By Graham Parker | Updated on June 05, 2003

LONDON-The low cost of money is bolstering activity in the property lending market. With the key five-year swap rate a third lower than experts had predicted a year ago, property lenders are still competing aggressively for business, according to a new survey from FPDSavills.

And the ready availability of finance is considered by the agents to be responsible for the contradictory nature of the current property investment market: in 2002 investment yields hardened while rental levels fell. This is the first time this has happened in over 20 years according to statistics prepared by IPD, and FPDSavills is predicting more of the same for 2003.

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