Sir John Ritblat, the grand old man of British property, today warned that the downturn in the market will last longer than he predicted just two months ago as the credit crunch continues to bite.

The Colliers CRE chairman and former head of British Land said in March that he expected property values to fall in the first half of 2008 before "some recovery in the second half " as buyers returned to the market.

But today he warned: "The continuing reluctance of banks to lend, together with a deteriorating economic environment, has led us to revise our original expectations of an upturn in activity towards the end of the year. We now expect investment activity in the UK to remain at its current depressed level for at least the remainder of 2008."

Sir John said that although the occupier market had so far been "more robust" than the investment market, it was now "beginning to reflect the decline in economic growth with a number of occupiers postponing plans to take on additional space".

Reporting a fall in first-quarter revenues from £16.3 million to £15.9 million, he said: "Although our professional services remain in high demand, they cannot fully compensate for the impact of the very low levels of activity in the investment market and the effect of the economic slowdown on occupiers. These two factors are likely to have the effect of reducing expected fee revenues for the year.

"We have known for some time that 2008 would be a problematic year and we have taken steps to cut costs without compromising our ability to take full advantage of any upturn. We remain confident of delivering our medium-term objectives."