Dominic Agace, CEO of M Winkworth PLC, comments on the impact of today’s spending review and planned public sector cuts on the housing market:

“Property prices will clearly be most affected in areas largely dependent on the public sector.  With 490,000 people set to loose their jobs, there will be an increase in forced sellers bringing more property to the market and prices in these areas will fall as demand remains constrained by finance availability.  Areas less reliant on the public sector, prime markets and London in particular with a smaller percentage of public sector employees and a strong international community, will fare much better as the pound remains weak and interest rates low preventing any dramatic increase in properties for sale and supporting demand.

In terms of transactions, we expect to see them remain flat 2011 on 2010 at around 650,000 as the reality of the austerity measures offset growing finance availability.  Where there is an increase in supply coming to the market we may see volumes increase.

Despite this, we do not anticipate a double dip in the UK property market. Interest rates are set to remain low for the foreseeable future, and if the government is able to balance private sector growth with the public sector cuts announced in today’s spending review, then the overall economy and in turn the property market will not be too adversely affected”.