August saw the least commercial property activity for seven months according to research from Savills.

Savills report said that expansion of total activity eased since March’s high, with anecdotal evidence suggesting that increased borrowing costs and subdued business optimism led to slower growth of overall activity.

Just 4.9% of UK commercial developers in its August survey reported an increase in overall activity.

Private sector activity saw the lowest rise since December 2005 while the volume of work on public sector projects was unchanged in August.

Mat Oakley, head of Savills’ commercial research, said: ‘July’s increase in the bank rate to 5.75% had an inevitable impact on developers’ confidence. We believe that given recent inflation news in particular this will prove to be the peak in the cost of money in this cycle. As this view becomes more prevalent, developers’ optimism should improve.’