House price growth has fallen in recent months, but is expected to start rising again by 2018, according to the latest three-year housing forecast by Countrywide.
London and the South are predicted to experience the biggest falls, with rises slowing to 3.5 per cent in 2016, from 10.8 per cent in 2015,according to the report by Britain’s largest estate and lettings agents group.
Prices are actually expected to fall by one per cent in 2017, but are tipped to increase by two per cent during 2018.
The findings are similar to those of the Centre for Economics and Business Research, whose senior economist Nina Skero says: “Although Brexit has certainly sent shockwaves, CEBR expects the housing market to slow down, but not plummet.”
The average asking price of a home in the capital is now £472,204, according to the latest ONS House Price Index.
Nationwide, house prices are still less than half the capital’s average, at £213,927, and are also expected to be affected, but not by as much.
Price growth in the North and the Midlands, for example, is set to fall by 0.5 per cent in 2016 and prices themselves are expected to fall by 0.25 per cent in 2017, as uncertainty surrounding the EU affects investment and labour markets.
However, prices in those regions are also expected to pick up by two per cent during 2018. Although 2017 might sound like a tough year for homeowners, it merely means that values will return to levels recorded at the beginning of this year.
“Forecasts in the current environment are trickier than ever, as the vote to leave the EU has thrown up many risks,” says Fionnuala Earley, Countrywide’s chief economist.
“Our central view is that the economy will avoid a hard landing, which is good news for housing markets.”