Property development work in the UK shrank for a second month in December, posting its biggest fall in at least four years and 9 months as tumbling commercial property values hit builder sentiment, data showed on Friday.
In a monthly survey, property services firm Savills said commercial developers were also pessimistic on average about the outlook for work in the first three months of 2008, despite last month's cut in the Bank of England base rate.
Savills said a quarter of commercial construction firms reported a fall in activity in December compared with 10 percent that reported a rise.
December's net balance of minus 15.4 percent indicated the sharpest rate of decline in activity since March 2003, when the survey began.
"While tenant demand has stayed steady, it is evident that the combination of the credit squeeze and falling capital values is affecting developers' sentiment," Mat Oakley, head of Savill's commercial research, said.
Activity in November fell for the first time in four and a half years, last month's report showed.
The monthly survey was conducted for Savills by NTC Research, which also produces widely tracked Purchasing Managers' Indexes on Europe's manufacturing and service sectors.