Those of us who have owned commercial property over the past few years will have noticed that it is now harder to sell than ever before.
Buyers are more cautious and are now insisting that all their demands are met and all their boxes are ticked. Before the current financial crisis which still engulfs us began, the phrase ‘take a view’ was wisely used by investors who were falling over themselves to buy commercial property. They were happpy if a building didn’t have planning consent for it’s existing use, if a tenant hadn’t paid their rent for a few months or if there were works which needed to be undertaken which the buyer would have to pay for themselves. However, buyers now want to make sure that they are fully aware of every minute detail about what they are buying as any oversights, however small, could lead to a disaster.
Another reason why commercial property is so hard to sell is the continuing lack of bank finance which is showing no real signs of abaiting. Banks, which are still repairing their balance sheets, are unwilling to lend to most people today, especially property investors, as they are not confident about the ability of their potential borrowers to manage their debts and see most lending as high risk.
Therefore, overly cautious buyers, dry banks and an economy which continues to instill fear in most of us with high unemployment, high inflation and the threat of high interest rates, are all accountable for the severe stagnation the commercial property market is experiencing and the difficulties people are having trying to sell their commercial property.
What will make selling commercial property easier? That’s simple – prices will have to fall………
To stay abreast of the latest commercial property market news, visit Jason Werth’s sell my commercial property blog