Pictured above: (l-r) Rod Bird, Steven Baker and Nick East of Lodders, Ashley Hollinshead of Deloitte, Simon Horan of Savills and Mark Lee of Lodders   

The jury is out on whether the Midlands is seeing a sustainable property recovery, delegates at a major property seminar have been warned.

Speakers at the seminar organised by Stratford-upon-Avon law firm Lodders, held at Henley-in-Arden Golf & Country Club included Lodders' partners Mark Lee and Steven Baker who outlined ways in which property companies could aim to retain commercial tenants in tough times.

Mark Lee said one option was to agree a base rent and a further percentage based on turnover.

For tenants in difficulty, an owner could consider offering a rent holiday where at least the outgoings would be paid on the property. An alternative was moving from quarterly to monthly payments.

Steven Baker highlighted how there were remedies available if a tenant ultimately defaulted.

These included retaining any deposit, pursuing guarantors, taking action in relation to the tenant's goods at the premises and suing through the courts.

Simon Horan, a director of estate agents Savills, indicated problems in the market still remained and there could yet be hiccups on the way.

Mr Horan cautioned: "We are still some way from a fully functioning UK market.

"Sustained recovery is unlikely before 2011/12. Affordability is high but there is still too much debt around. Unemployment is still rising and there remains insufficient mortgage capacity."

Mr Horan warned the audience to expect even lower loan to value mortgages and higher lender margins.

The sector was seeing "a modest land market bounce" with a concentration on smaller, less risky sites in higher value markets.

However, lack of finance remained a major constraint on development.

Mr Horan asked: "Housing starts are up but is this sustainable recovery? It is getting better but expect a dip before sustained recovery kicks in.

"There is strong demand for family housing but a poor supply chain in the short to medium term. Loan to value issues will hold back first time buyers."

He suggested:

Buy now if land is available and at fair value.

Expect private renting and co-ownership to expand.

Be aware of opportunities for mixed tenure residential rental vehicles.

For more information on Lodders Solicitors please view their website here: www.lodders.co.uk