Business property prices will not follow the example of the residential housing market and crash this year, according to a leading property agent.
As concerns about residential house prices grow in the face of the credit crunch, following a 2.5% decline in March, property group Christie & Co has reassured sellers that drops in commercial property prices will be far less pronounced.
Chris Day, international managing director of Christie & Co, said the average price of hotel, restaurant and pub properties had risen steadily over the past 10 years but not as dramatically as the house price index.
"The house price index has already started to fall but we believe there will be a less dramatic change in the business property markets. Fewer novice operators are entering our markets and, for this reason, we believe that the market for the sale of businesses is less susceptible to changes in the residential market," he said.
Neil Morgan, head of pubs at Christie & Co, added: "The downturn in the economy has brought a sense of realism to the market, and it is down to us agents to sensibly advise prospective sellers.
"Whatever happens with the economy the pub market, as it has proved before, will remain resilient. Quality sites and those priced realistically will always sell."
Last week Christie & Co urged that the Bank of England's cut in interest rates from 5.25% to 5% would inject a renewed confidence into the market.
By Christopher Walton
E-mail your comments to Christopher Walton here.