Fears over government spending cuts and a lack of lending have created a negative outlook for the commercial property market for the first time in two years.
The outlook for the UK commercial property sector has turned negative for the first time since July 2009.
This is according to a new report from Savills, which claims investor confidence has been hit by a lack of
commercial mortgage funding from banks.
Property investment firms are also worried about public sector spending cuts and what effect this will have on demand for office space.
"A general collapse in expectations for the UK economy on the back of public sector austerity has clearly washed over into the development market," said Michael Pillow, head of building consultancy at Savills.
He added that he expects to see caution in the sector until at least October, when the coalition government announces its spending review in full.
The Construction Skills Network has predicted that government spending cuts will see some 68,000 jobs lost from the construction sector between 2011 and 2015, which will heavily impact
commercial development projects.
Posted by Lisa Fear.
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