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LONDON-The latest figures from the Bank of England statistics show that in the year to September 2001, total property lending grew by £15.8 billion ($23 billion), the fastest growth ever recorded topping last quarter’s increase of £15.0 billion, ($21.75 billion).

Total loans outstanding to property companies by UK institutions now stands at £67.5 billion ($99 billion) compared to the previous peak recorded in the early 1990s of £40.7 billion ($59 billion).

Rupert Clarke, International Director of Jones Lang LaSalle and Managing Director of Jones Lang LaSalle Corporate Finance, said: “Perhaps the biggest influence on the markets over this period was interest rates which continued their downward trend with the five year swap rate falling by over 1% during the third quarter. This, combined with a slight softening in yields for secondary properties, offered leveraged investors extremely attractive positive yields over borrowing costs.”

But he warned: “Following the events of 11 September there has no doubt been a tightening of lending policies by some lenders and the fourth quarter lending figures are likely to be affected by the fact that some types of property are becoming harder to finance; in particular lending on development projects and on investment properties with short-term lease expiries.

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