Economic worries for UK property market

Concerns surrounding the economy and the health of property market around London mean that a substantial increase in real estate values is "unlikely" in the near future.

This is the belief of the London Central Portfolio which predicts that growth will not return until banks introduce more flexible lending criteria.

Hugh Best, head of investment management at the company, said the prices in the buoyant London market, which have been enjoying a rapid recovery in response to the credit crunch, are also likely to level out until long-term growth trends return.

"With the government revising down their economic growth forecasts and banks resolutely holding lower loan-to-value ratios and multiples of salaries, it seems unlikely that the UK will see substantial and considerable growth," he added.

The news is likely to interest anyone looking at buying London property, with the country's market expected to remain stagnant for a while.

Property prices fell by 1.1 per cent in September, according to the latest Rightmove figures.

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