And the next country to suffer is…?

An expert predicts which part of the world is next in line for a property downturn…

According to Barbara Knoflach, chief executive of German fund house SEB Asset Management and manager of the €7 billion SEB ImmoInvest fund , Scandinavia and Eastern Europe are the next most likely contenders to follow the UK into a property downturn.

Ms Knoflach explained: “The Nordic region will see a very sharp outward move in yields and the Eastern Europe markets will follow. Yields dramatically going upwards will level off the number of new developments.

“Both regions have experienced unsustainable yield compression in recent years. Indeed, several mature Central and Eastern European markets such as Poland and the Czech Republic have already seen yields move out by up to 2% in some areas.

Germany , France and Italy , heavily regulated and at a different stage in the cycle, will not suffer so badly but will not be able to escape a wider economic slowdown.  Spain is also at the sharp end of the property correction but a series of structural issues and in particular contagion from a residential property correction set it apart.