Lloyds Banking Group and Royal Bank of Scotland, the largest UK property lenders, are prepared to commit further capital to the sector despite the possibility of further losses in existing loan books, according to senior bankers.

Together, the two banks account for close to half the £225bn of outstanding UK property loans. Both have already been forced to take losses on real estate as the fall in values has hit customers.

Nick Robinson, managing director of corporate real estate for Lloyds, said that there were likely to be further losses from its loan book. Talking at an event organised by Estates Gazette , he said problems could occur when borrowers lost income from tenant failure, rather than from further falls in values. Losses are seen to have at least peaked.

Stephen Eighteen, head of property in the global restructuring group at RBS, said the bank would reduce its exposure to real estate through disposing of “non-core” holdings, mainly loans based on overseas property, although some UK assets are also included. The level of loan losses would be dependent on the economy, he added.

Even so, RBS was “writing new deals” cautiously for the UK investment and development markets, he said. Lloyds is also offering loans to commercial real estate customers.

Both bankers agreed that the banks would put properties up for sale, particularly among lower quality assets, but that there would not be the scale of forced sales that many had anticipated.

Mr Robinson said that the goal was to work with customers to recapitalise loans, returning the bank to a senior debt position. Estimates of equity needed to refinance the sector have ranged between £40bn and £250bn.

Mr Eighteen said that RBS had an average loan-to-value of about 90 per cent, which he said meant that most clients still had a stake in deals.

Both bankers were clear that there would be far fewer distressed situations than many expected. Mr Eighteen said that 90-95 per cent of its customers were still in control of properties, while Mr Robinson said that it was at least that high for Lloyds. “We don’t control vast tracts of real estate,” said Mr Eighteen.