London has been hardest hit, but the report did identify someareas where demand and confidence is still increasing, especiallyin the North of England. Offices and industrial demand has fallenmost sharply but retail activity has remaining relativelysteady.

However the market downturn has not yet impacted quoting terms.The survey found lease lengths are down from this time last yearbut the decline is very modest. There has also been a slight risein inducements, such as rent free periods and help with fitting outcosts.

RICS chief economist Milan Khatri said:"The fact that activityhas come off in the commercial property market is not good news forthe wider economy. It is clear evidence that business expansionplans are limited due to a lack of confidence in the economicoutlook over the mid-term. However, interest in commercial propertyas an investment has picked up as the stock market has fallen."