Increased caution from lenders won’t trigger UK commercial capital value falls

The sharp decline in the balance of lenders who see commercial property prices as a positive for the availability of credit could be a sign that higher interest rates caused by the Iran war will lead to a fall in capital values. However, we continue to expect interest rates to fall back this year and, with property equity prices also rising over the past couple of weeks, property values will eke out a small rise of around 1% this year.