The gulf in commercial property values between London and the rest of the UK will widen in 2012 as uncertainty over the euro zone crisis and the threat of recession hits real estate prices outside the best locations, Investment Property Databank said.

So-called secondary assets lost 1.9 percent of the their value in the last quarter of 2011 while prime real estate rose 0.6 percent, the benchmark IPD index showed on Thursday.

In 2012 you will see a growing divergence between the best and weaker performers and that essentially means London and the rest of the country, said Phil Tily, IPD UK and Ireland managing director.

All the economic signs are that values will soften across the board.

The total return for UK property, which includes asset values and rental income, was 7.8 percent in 2011, IPD said. It compares to 15.2 percent in 2010, a year marked by a short-lived rally before the euro zone sovereign debt crisis deepened last summer.

A series of prime London properties came to market last autumn as their owners looked to capitalise on prices that rose 34 percent between June 2009 and September 2011, fuelled by demand from cash-rich overseas investors looking for a safe investment.

Banks will offload more property in 2012 than last year as increasingly tough regulations mean they need to free up capital for lending, Tily said. It won't be a flood but given most of what they hold is secondary stock, it could depress values further.

Lenders including state-owned and Lloyds , via its acquisition of HBOS, have tens of billions of pounds of property loans of varying quality on their books, racked up during the pre-recession boom.

The rate at which banks can offload these assets is limited by the euro zone crisis, which is curtailing funding for property investors, consultancy Jones Lang LaSalle said in a separate report on Thursday.

Lending to real estate fell for a seventh quarter to 183 billion pounds ($290 billion), an 18 percent decrease on a year ago, JLL said citing Bank of England figures.

Disposals will become lumpier as lenders look to package up assets for a speedier sale said Jeremy Handley, a director in JLL's valuation advisory team.

(Reporting by Tom Bill. Editing by Jane Merriman)