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Gordon doesn't know that property prices have slumped

publication date: Jul 8, 2009
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The FT reports that Prime Minister Gordon Brown expects to raise £16billion from asset sales to build up the nation’s finances – and property is to account for £11billion of that. 

"Apparently no one in the Downing Street bunker has noticed the collapse of the property market," said Philip Hammond, shadow secretary to the Treasury.

Local Councils are supposed to be selling properties to raise funds but many are refusing to do so and those that are only realize around half of the prices achieved in the past. Stephen Jones, director of finance at the Local Government Association, said that property sales by the public sector had ‘dried up’.

Lord Oakeshott, Treasury spokesman for the Liberal Democrats, said land prices had fallen by up to 75 per cent: "The Treasury haven't a hope in hell of hitting these asset sales figures."

Dominic Cunliffe, a real estate partner at Macfarlanes, the law firm, said ministers did not seem to appreciate the extent of the property crash.

"You'd have to sell twice as much property to generate the same levels of return that they need, and how will they sell into a market where there just aren't many buyers?" he said.