FSA warns on commercial properties meltdown
The Financial Services Authority has warned the market that another crisis may pave in the country due to the commercial properties. The FSA has blown the whistle by analyzing the overall financial risks and positions of the country carefully.
The authority has raised concerns over improper fund management of several UK financial institutions. It has also informed that the companies are not in a proper financial frame to cover the losses on the sector. The funds won't be sufficient to prevent a probable meltdown in the commercial property.
The FSA has informed that about £160 billion of UK commercial property debt is going to mature over the next five years. But during this economic meltdown, many of the commercial property companies have received supports from the banks.
The cause of concern is if the banks decide not to renew loans then this could pull the price of the properties down. Because it would undoubtedly force to bring liquidation issues and can end up with a possible release of commercial properties on to the market. Moreover, leveraged loans to companies would also face a maturity hump during the course.