Savills report shows sharpest decline in rates in November was in South-east
UK commercial development activity rates in November dropped to a four-year low. A report issued by real estate services company Savills revealed that index figures fell from 8.4% to -10.3%.
Developers in the South-east reported sharpest decline, as the rate dropped to -10.2%, compared to -2.1% in London and -4.9% in the rest of the UK.
The report estimates that the recent credit crunch was the main reason for the sharp drop. High interest rates and a downturn in new client enquiries also contributed to the situation.
Mat Oakley, head of the commercial research department at Savills, commented: “Its evident that the credit squeeze in particular is now impacting heavily on developers' activity and expectations.
"The one possible ray of sunlight in an otherwise drab set of data this month is the December cut in the UK base rate. While this signals concern about the strength of the UK economy, the implied reduction in the cost of money should prove a spur to developers' confidence in early 2008.”