A recent upturn in the commercial-property market could prove unsustainable, according to newly published research. Ernst & Young’s ITEM Club said an end to quantitative easing and the banks’ ability to refinance loans could further distress the UK commercial property market. It said that UK commercial property prices rose 3% in December, their highest monthly rise in 23 years, but the chances of a sustained recovery in 2010 and beyond were unlikely. Dean Hodcroft, EMEIA head of real estate at Ernst & Young, said: "“Welcome though the bounce of activity has been, its sustainability is far from certain. The upturn has largely been based on investors deciding the bottom of the market had been reached and the massive decline in prices over the past couple of years resulting in attractive buying opportunities.” Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, added: “Quantitative easing has also been a significant boost for the sector, with the Bank of England using this new base money to buy assets from the private sector, thus releasing liquidity and allowing these sellers to buy other commercial property assets. “However, in the UK, quantitative easing is likely to end this week, and the Bank of England will no longer be buying assets from the private sector, with the likely result being that investors holding a greater proportion of their assets in gilts. Ultimately, this could result in the strong inflows into commercial property fading. "On the positive side, ITEM has suggested the weak pound – which has lost around 25% of its value since 2007 – will continue to offer support for some time to come. The UK and London, in particular, will remain an attractive market for foreign investors looking to acquire trophy assets at depressed prices. "This situation does leave a number of companies vulnerable and at the mercy of the banks, particularly when the time comes to re-finance. Some larger companies might be able to bridge the gap through an equity injection, but otherwise the banks are faced with foreclosing.”