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

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

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

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

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

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

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