Those who follow the news about the economy will know what is coming. We are in a recession and a commercial property crash is imminent. Let’s look at the reasons why and what people can do to avoid facing financial ruin.

The war in Ukraine has caused a lot of volatility in stock markets around the world. Further, it has caused energy prices to surge to an all-time high.

Inflation is at a 40 year high and the cost of living crisis is going from bad to worse. This had led to interest rates increasing which are at 13 year high. When interest rates increase, the cost of borrowing increases. In turn, all existing variable rate and new fixed rate commercial mortgages have increased. In many circumstances, banks have stopped lending and borrowers are in arrears. Banks will soon start telling lenders that unless they can clear their arrears, they will have to start repossession proceedings.

The cost of living, which has spiralled out of control, means people have less money to spend which has affected high street shops as well as internet companies. As retailers suffer, they require less retail space, less office space and less warehouse space. Many retailer are going out of business and lots of commercial properties are sitting empty with bleak prospects of being occupied any time soon.

The recent budget has also caused havoc. The stock markets have fallen and the pound has dropped to an all-time low against the dollar. This will put more pressure on the Bank of England to keep increasing interest rates which many say could soon reach 6%.

All these factors have led to demand for commercial property falling, rents falling, values falling, vacant space rising, mortgage arrears rising and repossessions rising. A commercial property crash is imminent and those who don’t sell now may face financial ruin.

Those who can read the signs and fear the worst should sell now. Speed is essential and sellers must price their properties correctly. If they price them too high, they will ruin their chances of selling. Some are prepared to sell at a big discount just to recover some of the equity they have in their properties. Many are willing to do this, even if it means selling at a loss. If they can recover all or even some of their equity, after repaying their loans, at least they have some cash which they desperately need to live.