Banks may start selling commercial property as they panic about potential losses, the Guardian states.
In a Bank of England report it was noted that commercial property prices had fallen by 50 per cent since July 2007.
Britain's real estate companies may be more likely to default on loans during worsening economic conditions and banks have so kept any real estate assets gained after clients went bankrupt.
Delays have been placed on the revaluation of properties in a bid to protect prices, the newspaper said.
However, a total of £250 billion was left outstanding from commercial property loans in September which makes it more likely that downgrades will be rated across the Bank of England's capital structure, it said.
If banks do panic-sell their commercial property, it could trigger "a ruinous double dip in values", the newspaper reported.
The Trends in Lending report published by the Bank of England in December said that loan availability to the corporate sector is expected to improve in 2010 as the cost of borrowing declines.
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