International property consultant Savills has added its voice to a growing chorus of warnings about the impact of the credit crunch on the real estate sector. Tightening credit markets are affecting transaction volumes in the commercial investment markets, primarily in the UK, the property advisor said.

International property consultant Savills has added its voice to a growing chorus of warnings about the impact of the credit crunch on the real estate sector. Tightening credit markets are affecting transaction volumes in the commercial investment markets, primarily in the UK, the property advisor said.

Back in July Savills reported that increases in UK interest rates would continue to influence commercial property values and that the resulting uncertainty could, in the short term, affect the volume of commercial transaction volumes. Prime residential markets are experiencing little or no problems. Domestic and international investors remained active across all sectors in the UK in the first half of the year, Savills chairman Peter Smith said. But he said there is an increased level of tenant selectivity on locations for new facilities.

Smith made his comments as Savills reported profit before tax in the first half of 2007 was up 7% to £33 mln. The group's revenues were up 35% at £284 mln.