A decline in European commercial property values has led to a reduction in the level of real estate lending of the UK's four largest banks, new figures show.

Bloomberg reports that the financial houses cut back on lending for commercial real estate by a combined GBP 17.9 billion in 2010.

Banks have become more reluctant to provide property debt as a result of the global credit crisis, the Property Industry Alliance group - who conducted the research - said.

Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, the largest commercial property lenders in the region, reduced loans by a combined GBP 14.5 billion. HSBC Holdings Plc and Barclays Plc said their lending fell by GBP 3.4 billion.

These numbers show that banks have been far more active than people think in reducing their loan exposure to real estate, Phil Clark, head of property at Edinburgh-based Aegon Asset Management and co-author of the report, told the news provider. People understand there will a reduction [in lending]. The big question is: who are the new lenders and how much will they lend.