A NEW report reveals that the UK property market may be stabilising, despite the ongoing recession.

Real estate adviser Cushman & Wakefield’s latest study reveals that prime yields for UK commercial property remained stable in May, with 23 out of 24 key yield outlook indicators remaining flat.

This, the firm claims, provides the most stable picture since December, 2006, with only prime yields on regional out-of-town offices under outward pressure during the month.

In its latest Business Briefing on the UK investment market, Cushman & Wakefield says that the prime average yield, at 7.35% across all sectors, is at its highest since 1992.

During the month, there has been an improvement in both demand and activity, along with an improvement in the financing environment, with signs that a select number of banks are regaining a taste for lending albeit still at higher than average margins.

The report said there were more encouraging signs that certain tenants are ready to activate demand requirements to take advantage of their strength in today’s market.

Some stronger retailers are planning to expand their store portfolios as recent sales and footfall figures have been encouraging, the report said.

David Erwin, head of UK capital markets at Cushman & Wakefield, said: “The whole feel of the market is more positive, with a real depth of bidders.”