The investment market London continued to experience a minimum level of activity in the first half of 2009. Although borrowing costs fell as the Bank of England reduced the Official Bank Rate from 2% to 0.5% by March 2009, banks remained unwilling to lend in the sector to all categories of investor including buy-to-let, investment clubs and other private investors. Very few investment deals were completed due to the insurmountable gap in price expectations between buyers and sellers.

There are investors with equity pursuing products from distressed sellers at deep discounts, but there was little evidence of sales at deep discount in the first half of 2009. The unexpected revival of the sales market brought relief to some developers, with new stock selling well from March 2009 onwards. With vendors’ expectations rising towards the end of the first half of 2009, buyers and sellers were, if anything, further apart at the end of the period.