Only weeks after property consultants DTZ found that Londonís office rents were the highest in the world, the latest quarterly survey from the Royal Institution of Chartered Surveyors (RICS) has found that demand for commercial property has slumped in England and Wales for the seventh consecutive quarter.
The market in London was the weakest in the country.
The survey found that 11 per cent more surveyors reported a fall in demand for property during the three months to the end of December than reported a rise as businesses cut back on investment.
Worst affected was the market for office premises, with 47 per cent more surveyors reporting a fall in demand than reporting a rise.
But the overall figures were saved from appearing even worse by the relative strength of the retail sector. Thanks to continuing high levels of consumer spending, demand for retail space boosted the overall picture in the South, the Midlands and Wales, while confidence in the North of England remained high.
Confidence is also plummeting; nearly half of RICS members (47 per cent) expect to see a continuing fall in demand in the first quarter of 2003 compared to only 3 per cent who expected falls in the last quarter of 2002.
"There is little cause for cheer in the UK commercial property market at the moment although there are many firms, especially outside London, who remain unscathed," said RICS chief executive Louis Armstrong.