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Mace鈥檚 cost consultancy business is forecasting that tender price growth in London will slow next year due to the weakening office market.

In its latest set of forecasts, the firm predicted tender price inflation of 1.5% in the capital this year, with 2.5% growth in the UK as a whole.

Mace said growth in costs would slow due to a weaker commercial sector, rocketing property prices and an impending increase in business rates that would likely hurt London鈥檚 competitiveness.

The consultancy predicts 2018 will be a 鈥渢ough year鈥� with a hard Brexit looking likely.               

Steve Mason, managing director of cost consultancy at Mace, said: 鈥淭he current market is providing mixed messages. Whilst we are seeing foreign investors use the weaker pound as an opportunity to fund projects more cheaply, the pound鈥檚 weakness together with increasing steel and oil prices has started to filter through to the supply chain who are limited in their ability to absorb the increases.

鈥淒espite the ongoing global economic uncertainty, prospects for 2017 look much more positive than forecast six months ago, although this is now balanced against anxieties around 2018. Such dynamics will continue to persist and whilst this will create challenges, with these will also come opportunities.鈥�