Gloom returns on property

The Royal Institution of Chartered Surveyors has taken the Government to task for undermining the commercial property market by creating an atmosphere of economic and political uncertainty.

Graham Chase, commercial property spokesman for the RICS, said developers and occupiers alike were crying out for strong steady growth, but instead were faced with government U-turns on issues such as the recent share option debacle and wrangling between the Chancellor and the Bank of England over interest rates.

That had resulted in a slump in confidence during the second quarter of the year, especially in the industrial sector where a net balance of 1 per cent of property professionals were more confident compared with 33 per cent three months ago.

Mr Chase said: "The falls in unemployment seen over the last two years look to be coming to a halt, reducing the demand for working space in all sectors. Stagnation of manufacturing productivity and concern over the sector's prospects have led to many expansion plans being postponed."