LONDON-Uncertainty of the rest of the year has caused Newmark Knight Frank to downplay local markets, even though asset classes such as London office have enjoyed a healthy rebound in demand and prices. However, the company doesn’t believe the growth can be sustained, and expects a downward turn until at least July 2011, according to a recent company market outlook.

The company points out that unemployment fell to 7.8% in August, a positive indicator. Price growth is also much stronger than it was one year ago, but figures show that the growth has been trending downward since a peak at about 7% in December 2009.

Claire Higgins, head of commercial research, half-jokes that it may be that the British just like to make gloomy forecasts. “We do see the growth slowing, and there are a lot of concerns for the outlook for the UK economy as a whole We’re facing a lot of severe cuts. We’ve seen some strong growth figures in the second quarter, but it’s the last quarter that we expect growth like that. We feel that we’re teetering on the brink – some areas might stabilize, and others may deteriorate.”

Transaction levels have rebounded, and prices are now broadly on par with where they were at the end of 2008, according to the report. However, the number of deals completed in July halved from the June level and is back to late 2008 levels.

Higgins tells GlobeSt.com that she expects 2011 to do a flip-flop of this year. “I think you’re going to see that the first half of the year will be very difficult, and then the occupational side of the business will improve, rents will start to grow, and people will have more confidence in the second half. This year it’s all about strong price growth, but next year we should see it all start to work together. We’ve just got a way to go yet,” he says.

P William Hughes in the report. He said life insurance companies have ramped up lending and CMBS have shown renewed signs of life, but the agencies remained the dominant sources of multifamily lending.