Julien Holmes, managing director at Crown Mortgage Management, admitted that regulatory changes, both from the Financial Services Authority (FSA) for its residential arm, and Basel II would both have an impact over the next 12 months. He said: “I can see borrower interest increasing over the next 12 to 18 months. I also think that there will be an increase in portfolio sales in the commercial sector. It all depends on the ratings attached, and how quickly and easily this can be achieved. Ratings play a huge part, and the introduction of Basel II will also play a part within the commercial sector in 2007, due to the changes forecast.”
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Despite calling for a greater synchronicity between the FSA and the commercial sector, Holmes admitted that full regulation of the commercial market would be a bad move. “There would be so much different regulation to administer and would probably be a step too far,” he explained.
Peter O’Donovan, mortgage manager at BestInvest, said: “More mortgage lenders seem to be looking at opportunities in the commercial sector. If the buy-to-let market continues to be swamped then investors will look at other opportunities. The procuration fees attached to the commercial mortgage sector are also good.”
