Downward price pressures in London have eased, driven by a slump in homes coming up for sale. But with house prices high and mortgage interest rates close to their floor, that is unlikely to drive a recovery in prices soon. Rather, we expect a 1% fall in house prices during 2020, and flat prices in 2021. That said, the outlook for rents is stronger. We think the growing imbalance between rental demand and supply in London will push rents up by a further 8% or so by 2021.
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