According to CB Richard Ellis (CBRE), commercial investment in the UK in the second half of last year fell by £10.7bn, with funding for new developments almost entirely drying up.

The research found that investment in UK commercial property fell by 9% in 2007, a statistic which hides a much larger fall following quick price rises in the first half of 2007. Overall commercial investment in the year was £59bn.

Nick Axford, head of research in Europe, the Middle East and Africa at CBRE, said that the change in sentiment from lenders and financial institutions meant that it was now virtually impossible to fund commercial development without tenants signed-up in advance. He added it was now likely that the easy access to capital seen up until the middle of last would not be repeated, with a permanent return to a more normal commercial property market more likely. “To expect us to go back to an environment we had in 2005-6 in the future is just unrealistic. It’s now back to basics, back to a world where risk is priced in to property transactions”, he said.