Demand for commercial mortgages ''set to increase'' - commercial mortgages

Private investors buoyed by the success of their residential buy to let properties are now moving into commercial property, Mortgage Introducer has advised.

Average annual returns of 11.5 per cent a year since 2002 are just one reason why investors are attracted, Commercial First sales and marketing director Stephen Johnson wrote on the website.

Last month the Financial Times reported that lending on commercial property grew by almost 20 per cent last year, with lending reaching a record level of £85.7 billion.

"The flood of investment into commercial property continues to astonish. Lending into the sector has been off the scale; there''s a continued wall of foreign money into London office and UK commercial property and … retail investors can''t seem to get enough of it either," commented Jeremy Warner, writing in the Independent in May.