Bailout "right thing to do" for commercial property market

The government's rescue package for banks was "definitely the right thing to do", according to one economic research consultancy.

Ed Stansfield, property economist for Capital Economics, says that compared to the alternative of letting banks flounder and go under, the bailout is positive for the commercial property market.

However, he also points out that it probably will not prevent recession, but should help avoid the worst case scenario.

He says the bailout has reduced the risk of a major worldwide slump and adds: "The idea that the bailout is going to somehow re-stimulate the commercial property and investment markets, I wouldn't subscribe to at all."

According to figures from CB Richard Ellis released this month, commercial property values fell by 6.7 per cent in the third quarter of 2008.

This compares to a 3.0 per cent fall in the second quarter of the year.

Statistics from the Investment Property Databank show that since June 2007, the market has fallen by 24 per cent.

Martin Slowe Property Services are Commercial Property Consultants offering a full range of Commercial Property Services.