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News Release

London

Upturn in housing market sentiment but prices to fall back in 2010 by 7%

Jones Lang LaSalle’s latest UK residential market forecast


London, 11th September 2009 - Six months of improved sentiment in the mainstream UK housing market has seen the value of the average home increase by 8%, but Jones Lang LaSalle’s latest UK Residential Market Forecast predicts this market revival is likely to be unsustainable and a fall in prices of -7% on average is likely during 2010.

James Thomas, Head of Jones Lang LaSalle’s Residential Development and Investment team, said: “The unforeseen and seemingly irrational pick-up in prices has altered the outlook for UK house prices but it is likely that this recovery will prove temporary. The economic fundamentals that have supported the upturn, most notably the constrained supply of housing for sale, will be eroded as unemployment hits a peak and mortgage lending remains weak.

Thomas concluded: “While the recent drive in the market is encouraging, it is impossible to ignore the short-term risks posed to the UK residential sector by rising unemployment and poor credit availability. Good buying opportunities will exist for those who have access to equity or credit. Longer-term opportunities will be presented by the shortage of housing required to accommodate the predicted nine million increase in the UK population over the next 25 years. We expect prices to rise on average by 6% per annum as a result of this.”