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Hung parliament could see house prices fall

A number of property experts have stepped forward to express their fears about the UK property market during the remainder of 2010. There is concern that a hung parliament will increase the cost of borrowing in the UK which would reduce liquidity in the mortgage market and increase the cost of mortgages for UK consumers. A reduction in demand for houses would obviously impact on prices in a negative manner and could prompt a new wave of sellers.

Despite the fact that the general trend in the UK property market has been positive over the last 12 months it has been very volatile and very difficult to forecast. The fragile nature of the recovery will not be helped by the prospect of a hung parliament with many political experts predicting another election within 12 months. This ongoing uncertainty is something which investors would want to avoid but unfortunately looks likely to be available in abundance during 2010!

It is only now that the reality of a hung parliament is being appreciated by more and more people in the UK that the potential impact upon the economy is beginning to sink in. Doomsday predictions prior to the election could come true unless a stable government and stable political environment emerges over the next few days.

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