Bank lending to commercial property companies could take a decade to recover, according to a forecast published today.

GVA Grimley believes that damage caused to confidence by falls in capital values of 50 per cent will result in a prolonged hiatus that might not allow a return to normal levels of lending until 2019, despite a prediction that capital values will begin to rise again as soon as next year.

Property owners will suffer a total fall in rents from tenants of shops and offices of 20 per cent from peak to trough, GVA argues, although occupier demand will start to rise again in 2011. However, the legacy of the dearth of development work in the recession is likely to lead to a supply shortage from 2013.

The Times