Hospitality property prices are expected to hold tighter than the residential housing market.

UK hospitality property prices are not expected to suffer as severe a decline as the residential housing market in 2008, according to a report by caterersearch.com.

The prediction – by property experts Christie & Co – is mainly due to the fact that, over the last ten years, the average price of hotel, restaurant and pub properties has not risen as steeply as the house price index.

House prices fell 2.5% in March, the biggest monthly decline since September 1992, and much higher than analysts were expecting. Christie & Co said it expects any future drops in the commercial sector, however, to be far less pronounced.

Chris Day, International Managing Director of Christie & Co, said: “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.”

The Bank of England last week slashed UK interest rates by a quarter of a point to 5% in an attempt to counteract the effects of the global credit crunch on mortgage markets.

The rate cut was the third made the Bank in the past months, with further reductions expected during the year.

By Natasha Piscitelli