Vision for real estate finance

A Vision for Real Estate Finance in the UK

Recommendations for reducing the risk of damage to the financial system from the next commercial real estate market crash.

A message from Nick Scarles, Chairman of the Real Estate Finance Group (REFG):

"A Vision for Real Estate Finance in the UK’, is a report which draws on the breadth of the group’s property industry expertise to come up with a solution which both protects financial stability and maximises the commercial real estate sector’s contribution to economic growth. The report is by the REFG, a cross-industry real estate group comprising experienced professionals from across the market spectrum, acting in their personal capacity, with the objective of delivering unconstrained their best recommendations. The report benefits from the industry discussion initiated by publication of the group’s draft recommendations in October 2013 (see bottom of page)."

"We believe our recommendations offer a realistic prospect of protecting financial stability and maximising economic growth and hope that those with the power to implement them will now take these proposals forward."

 A Vision for Real Estate Finance in the UK - final recommendations

LONG-TERM VALUE METHODOLOGIES AND REAL ESTATE LENDING

Long-term Value Methodologies and Real Estate Lending, published on 30 June 2017, outlines work undertaken by the Long-term Value Working Group (a sub-group of the Property Industry Alliance Debt Group) in pursuance of Recommendation 4 (Use of long-term value 

Long-Term Value Methodologies & Real Estate Lending

IPF Research

The IPF Research Programme commissioned research in 2018, which included the following:

•    A review of the 2017 Long-term Value Working Group Report and the issues arising in terms of concepts and key issues; 
•    A comparison of property indices; 
•    Long-term sustainable rents; 
•    Long-term sustainable capital valuation measures and cap rates; and 
•    Leverage and leading indicators of potential downturns.

The summary report can be found at: https://www.ipf.org.uk/resourceLibrary/long-term-value-methodologies-in-commercial-real-estate-lending---summary-report-february-2020.html