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What will kick start the property sector?

As UK base rates head towards 1% this week there are some experts suggesting that the property sector could well stabilise in the short to medium term and push on in the longer term. However, it is proving very difficult to put a finger on what will kick start the property sector and what will effectively stop the ongoing slide. The onset of a 1% base rate, potentially falling to 0% in due course, does not appear to be the main catalyst with many suggesting confidence is required before the market can even contemplate a recovery.

Injecting a dose of confidence into the property sector in the UK could be very difficult to say the least as many now seem resigned to a short to medium-term period of lower and lower prices. Whether it will be international investors who revive the UK property market and put the spotlight back on the sector again remains to be seen, but the UK government's attempt so far to refloat both the economy and the property market have fallen flat.

As we have covered on a number of occasions, it is rumoured that UK banks have exposure of hundreds of billions of pounds to the commercial property sector and many analysts expect substantial write-offs in the coming weeks and months. Whether they will then be in position to redress the UK property market as a whole remains to be seen but unless confidence returns in the short to medium term this could turn into a significantly longer recessionary period for the property sector than many had expected.

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