A report by DTZ, the commercial property consultant, shows that speculative lending has risen from £11.4 billion in 2005 to £15 billion this year. This year’s figure represents 12 per cent of total property lending, up from 10 per cent.

William Newsom, head of valuation at Savills, the estate agent, said: “This is a highly competitive market. Most existing participants have ambitions to increase the size of their loan books, coupled with a whole series of new entrants and there is just not enough business to go around.”

“Securitisation of loan books has also increased banks’ capacity to lend.”

Mr Newsom said that because of this, banks were looking at other, riskier ways of lending, including finance for speculative developments.

He said that there was also a danger that some banks would enter the market for speculative lending with staff who did not have the specialised skills.

Lord Oakeshott of Seagrove Bay, the Liberal Democrats’ Treasury spokesman, described the rise in speculative lending as a “worrying trend”.

Martin Wallace, director at Colliers CRE, the property consultant, said: “We have seen German money, even insurers, deciding that although their initial preference was to lend on completed investment buildings, the entry price and reduced competition for speculative lending is attractive.”

Banks are rumoured to have made bids for Ropemaker Place, a large speculative development in the City that ultimately was acquired by British Land, the property company.

Mr Wallace did not consider the rise in speculative lending a problem, but said that some would lose money.

Michael Brodtman, head of valuation at CB Richard Ellis, the real estate consultant, played down concerns over speculative lending, saying that in most cases banks were making “shrewd decisions”. He said that investors should be optimistic about the prospects for the property market because of rising demand for office space in Central London.

The amount of speculative office development in Central London has more than doubled in the past year, but remains well below the levels seen in the early 1990s. CB Richard Ellis says that of the seven million sq ft of Central London office space under construction at present, 4.5 million sq ft is speculative.

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