Colliers CRE (CCRE) has offered a bleak outlook for the property market as a whole in its Property Snapshot for June, forecasting mixed fortunes for the Capital.

Central London continued to perform well in the retail sector with steady consumer spending, an unchanged amount in the number of vacant units and a decreasing amount of vacant floorspace. Outside of London, larger stores are ‘downsizing’ and releasing floorspace to avoid an oversupply on the market.

In the office sector, central London is not performing as well as the Capital is facing an increase in supply as current developments are completing and of those due for completion in 2010, only 21% have been pre-let. Regionally the sector is holding up well but in some areas expansion is slowing due to a lack of supply.

In the residential market, CCRE found that lack of mortgage finance continued to be the major factor in the deterioration of the sector. Some auctioneers are continuing to find an increase in repossessed properties on their books. CCRE forecasts that house prices are set to fall by 10% by the end of the year.

Walter Boettcher from the CCRE Research and Forecasting Team told PIN: “The signs of slowing economic growth are still mixed, although confidence indicators continue to fall markedly. Bank lending constraints are still seen by most observers as the key impediment to property market recovery, both commercial and residential. Continued adverse bank lending conditions are a greater threat to property performance than potential oversupply issues whether it be City offices, regional shopping centres or logistic warehousing. Colliers CRE is penciling in a recovery in bank lending for mid-2009.”