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from Breakingviews:

London real estate at an inflection point

By George Hay

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Most real estate valuers in London think property prices in the UK capital are about to fall. That prediction has been easy to make and easier to get wrong in the last five years. This time, the evidence that global investors’ favourite housing market has peaked is looking credible.

House prices in London as a whole are still rising on a monthly and annual basis, and are 20 percent more expensive than a year ago, according to the Office for National Statistics. But there is stasis in the process upstream. The Royal Institution of Chartered Surveyors’ latest monthly survey shows a sharp dip in those wanting to buy in London, and an even sharper jump in those keen to sell.

Monthly sales volumes are off 17 percent in Greater London since December, says the Land Registry. A small majority of RICS’ members now expect values in the city to fall in sympathy.

Housing market: what is your prediction?

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One thing looks to be sure this year – the housing market has further to fall. Some of the gloomiest predictions are for a further 20 percent slump before a recovery may set in.

Our own Reuters poll of 37 analysts at UK banks, published today, predicts that prices are likely to drop by about 11 percent this year and that it will take until 2010 before it gets better.

Iron Chancellor to leaden Prime Minister

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** For full coverage of UK politics click here **

brownjune.jpgOne of Gordon Brown’s favourite speech writers is leaving Number 10 to return to the Treasury. That gives Brown the perfect opportunity to draft in someone who has the ability to coin the kind of phrases that chime with the electorate and stick in people’s minds.

To date, that is something Brown, whose dismal year in office was underlined on Friday with a humiliating fifth place by-election finish for Labour, has signally failed to do. Sure, Brown wanted to move away from the accusations of endless spin that soured the public mood towards his slick predecessor Tony Blair.

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