UK property developers suffer as a result of the credit crunch

UK property developers are suffering from reduced confidence and finances as a direct result of the credit crunch, according to a leading commercial property consultancy firm.

Anthony Duggan, head of research at Drivers Jonas, said that developers were unsure as to whether they would be able to lease their buildings once the construction phase had been completed.

"The second issue is the availability of finance, in that developers all struggle to get finance to build the buildings due to the credit crunch," he said.

Mr Duggan said that the combination of a lack of developer confidence and the scarcity of finance was causing a decline in the number of new properties being built.

According to the November 2008 Local Government Association's report, From Recession to recovery: the local dimension, the construction industry has been particularly hard hit by the credit crunch.

A recent survey by Drivers Jonas showed that construction activity fell by 20 per cent over the last six months.

UK Property News posted on 19/11/2008 16:39:13