Most UK real estate agents are predicting a fall in property values across the country during 2012. Of the large, international agencies, these vary between a pessimistic 5 per cent fall to a more modest 2 per cent. The Royal Institution of Chartered Surveyors\' 2012 forecast is for a 3 per cent fall. As was the case in 2011, the degree of price movement will vary tremendously with London once again expecting to buck the trend and continuing to gain in some of the most sought-after areas of prime central London. The principal factors which will cause this stem from the underlying economic uncertainty, which will result in a fall in demand from anxious would-be homebuyers. In turn, this will lead to a fall in the number of housing transactions, as consumer confidence weakens and already limited mortgage finance becomes even more restricted. A bleak outlook for jobs will make UK and EU borrowers more cautious when considering taking out large loans. Indeed, the impact of the Eurozone sovereign debt crisis is already having an impact on the availability of mortgage finance and looks set to continue as we move forward into 2012. Many mortgage lenders have already increased their rates as a result of an increase in the cost of wholesale funding — the three-month Libor rose from 0.83 per cent in August to 1.05 per cent in December. The general feeling is that lending costs will continue to rise until the Eurozone debt crisis is resolved. Major banks are likely to be reluctant to provide new lending due to the lack of liquidity and high cost of wholesale funding in the market place. Ultimately, this will result in new mortgages being more expensive. This is backed up by the Council of Mortgage Lenders\' (CML) figures which estimate that gross lending will fall to £133 billion (Dh774.62 billion), with £5 billion of net lending, compared with levels of £138 billion and £9 billion respectively in 2011. Stamp duty relief no more On March 24, the additional hindrance to UK growth comes into effect, when stamp duty relief on properties worth £250,000 or less will end. This means that those buying family homes in areas where a relatively modest property of this kind costs more than £250,000 face a stamp duty bill of at least £7,500, and with the addition of estate agent and solicitors\' fees and removal costs, an average UK family can easily have to pay out £15,000 in cash or more in addition to a deposit of 25 per cent. The picture is even bleaker with higher priced properties where stamp duty increases to 3 per cent between £250,001 and £500,000, 4 per cent between £501,000 and £1 million and the new higher rate that came into effect in April last year of 5 per cent on properties worth in excess of £1 million. The knock-on effect of limited access to mortgage finance will be an increase in demand for private rented accommodation throughout the UK. Leading agencies have forecast a growth in rent of 3 per cent in 2012, largely due to an intensifying of the imbalance between demand and supply. In 2009 and 2010, 15.6 per cent of UK household were renting, this is predicted to increase to 20 per cent by 2015-16. On a positive note, this is likely to cause many lenders to once again begin the financing of buy-to-let properties as a result of the increased security of this sector. Until recently, the majority of lenders completely withdrew from this market place, leaving very few specialist lenders, the majority of whom offered unfavourable lending terms. Overall, there remains an impasse between sellers and buyers, with the former reluctant to cut prices and the latter unwilling to pay over the odds. In 2012, home sellers must either have an extremely desirable property to sell in a sought-after area, or be willing to lower their expectations in line with market forces if they want to achieve a sale. Throughout 2011, properties that didn\'t have all the right boxes ticked sat on the shelves and will continue to do so into 2012 unless sellers are willing to cut the price.