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The Masked Tulip

Twisted Logic Of The Independent

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Prices could slide upwards as details of the coalition Government's policy towards housing becomes clear. Estate agents have already experienced a relative boom in the number of enquiries in the last week as potential homeowners who have been worried about buying in a time of uncertainty have re-entered the market.

"Prices will be dependent on the short to medium management of the economy and none of us at this stage can predict how the coalition will fare with this," says Alex Thompson, director of Winkworth Notting Hill. "Prices are already touching on pre-credit crunch prices so it is difficult to imagine them going much higher, but I would be surprised if they were to fall in any significant way. This all assumes continued low interest rates of course. Should this change to any significant degree, then we could be looking at a very different picture."

While there could be a number of additional properties coming onto the market if landlords decide to sell now to take advantage of lower capital gains tax rates, the number of people hoping to snap up a bargain could be reduced by continued lender reluctance, warns Liam Bailey, head of residential research at Knight Frank.

Mortgage availability will remain tight over the next two years, especially as the banks begin to repay government loans extended through the Special Liquidity Scheme at the height of the credit crunch," he says. "The banks will also continue to ration mortgages using sharply differentiated lending rates depending on deposits."

He forecasts that house prices in the UK will end the year 3 per cent lower than they were at the start of the year, while prices in the central London prime market will rise by 3 per cent.

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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