Annual house price growth will sit between 0 and 3% by the end of next year, Halifax managing director Russell Galley has predicted.
House price growth fell from 10% in March to 2.1% in July, before recovering to around 4% in the past couple of months.
Galley said: “We expect annual house price growth nationally to stay low and in the range of 0-3% by the end of 2018.
“The main driver of this forecast is the continuing effects of this year’s squeeze on spending power as inflation has outstripped wage growth and the uncertainty regarding the prospects for the UK economy next year.”
Property price inflation was strongest in the North of England this year, with the annual rate of growth reaching 9.1% in the third quarter of 2017.
London was the worst performing region with an annual rate of 2.6%, a far cry from when it increased by 21% in the year to the first quarter of 2016.
Russell Galley, managing director of Halifax Bank, said: “The UK housing market in 2017 followed a similar pattern to the previous year.
“House price growth has slowed, whilst building activity, completed sales and mortgage approvals for house purchase have all remained flat.
“This is driven by a combination of the continuing uncertainty regarding the future of the UK economy, and the ongoing challenge for prospective buyers to build up the appropriate deposits to support purchases.”
He added: “Despite the recent rate rise we do not expect this to have an adverse impact on transactions.
“A further rate rise is not seen as imminent and we may not see one until the latter part of 2018, if at all.”