Commercial property prices will fall by 12% over the next three years as rising interest rates take their toll, economics consultancy Capital Economics has warned. Daily Telegraph. The Times

The consultancy said it no longer expected the sector’s extended boom to end with a soft landing, predicting that prices would fall until 2010.

Kelvin Davidson, Capital’s property economist, said: 'We have been warning about the upside risks to interest rates and thus the downside risks to commercial property prices for some time. But with the Bank of England increasingly worried about the need to address building inflation pressures, those risks are now our central view.'