Developers are more pessimistic about the market now than at any time for the last five years, according to research from Savills.
The negative sentiment recorded in the latest Total Commercial Development Activity Index was the most widespread since the survey began in March 2003, Savills said.
Mat Oakley, head of Savills commercial research department, said: ‘This month’s survey was surprising in the fact that developers’ expectations for the future continued to slide. While the lack of debt available is clearly a dragging factor on the market, we expected that November’s 150bp cut in the base rate might give developers some confidence that the downturn in occupier demand would be shorter and less deep than it could have been.’
Almost 58% of respondents reported a drop in development activity, with the resultant net balance of the Total Commercial Development Activity Index down to -50.3% in November – the thirteenth surcessive monthly fall in overall activity.
The fastest rates of decline were in private sector new build and public sector retail and leisure. Office development was also badly hit this month, the survey said, as the downturn in the wider economy gathered momentum.