Average house price growth is predicted to fall to 1.5% in 2017 compared with 5% in 2016, according to the latest forecast from Countrywide.
While the first half of 2018 is likely to be more difficult the property services group forecasts that prices will end the year some 2% higher than they will start. By 2019 it expects house prices to be growing at an annual rate of 3%.
House price growth is forecast to slow across all regions over 2017 and into the first half of 2018. Countrywide expects a recovery in growth rates beginning from mid-2018 and continuing into 2019 as wage growth returns.
Fionnuala Earley, Countrywide’s Chief Economist, said: “Economic conditions for households will remain challenging over the next year as inflation eats into budgets and interest rates begin to rise.
“In addition, fewer landlord purchasers and the later age at which people buy, is affecting the level of demand. But we expect the UK economy to recover and wage growth to pick up in response to global growth. That, combined with a continued lack of housing supply, will help to support house prices.
“The housing market is sensitive to confidence which will be affected by the outcome of Brexit negotiations and the implications this will have – particularly on employment.”
Greater London is likely to see price growth slow to 0% in 2017 before rising by 2.5% in 2018 and 4% in 2019. After two years of falls, Prime Central London (PCL) will see price growth of 2% in 2017, followed by 4% and 5% respectively in the next two years.
Across the South East and East of England price growth will slow in 2017 to 1.5% and 3.5% respectively. In 2018 prices in these areas will rise 2.5% and a slower 2% respectively. Countrywide expects a similar path for house prices in the South West (1.5% to 2%).
House price growth will slow in the North, the Midlands and Wales. The North East is expected to see no price growth this year, and to increase to 1% in 2018 and 2.5% in 2019. Price growth in the North West, Yorkshire and Humberside and the Midlands will follow a similar pattern of weaker annual price growth in 2017 and 2018, rising again in 2019.