The value of new construction contracts is set to fall at the fastest rate since the early 1990s this year as builders compete for a dwindling pool of tenders, according to new figures.

Tender prices fell 2% in the last three months of last year – their first year-on-year fall since 1997 – according to the Building Cost Information Service.

The situation will deteriorate further and prices will drop 8% – the sharpest fall since 1993 – over the whole of 2009. Prices will not turn positive until 2011, according to the BCIS, a division of the RICS.

Financial Times