House prices sluggish as growth rate slows through 2017
House price growth across 2017 is set to slow to less than a third of the rate of increase seen last year, according to a forecast.
Property values are expected to increase by 1.5% across 2017, compared with a 5% upswing in 2016, according to a report from estate agency and lettings network Countrywide.
House price growth is predicted to slow across all regions of Britain during 2017 and into the first half of 2018.
But Countrywide expects a recovery in growth rates from mid-2018 onwards, continuing into 2019 amid expected wage growth.
Growth in property prices is predicted to rise to 2% in 2018, followed by a 3% uplift in 2019.
Countrywide said that as Brexit negotiations continue, confidence will be volatile which will have implications for the pace of economic and housing market recovery. It said the outcome of these negotiations is the biggest risk to performance.
In the north east of England and London, house prices are predicted to be flat with no change this year. Central London is the only region where values are expected to dip, by 1.5%. In Scotland and Wales, house prices are expected to lift by 0.5%.
The strongest growth this year is forecast in the east of England, with a 3.5% uplift.
Next year, prime central London is predicted to lead the way for price growth, with a 4% increase, rising to 5% in 2019.
Countrywide said it expects interest rates to start to rise very slowly, from spring to summer 2018 - but for wage growth to also increase - helping household budgets to recover.
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."
Here are Countrywide's forecasts for annual house price growth in 2017, 2018 and 2019:
:: North east, 0%, 1%, 2.5%
:: North west, 2.5%, 2%, 3%
:: Yorkshire and the Humber, 2%, 1.5%, 2.5%
:: East Midlands, 2.5%, 2%, 3%
:: West Midlands, 2.5%, 2%, 3%
:: East, 3.5%, 2%, 3%
:: South east, 1.5%, 2.5%, 4%
:: South west, 1.5%, 2%, 3%
:: Wales, 0.5%, 2%, 2%
:: Scotland, 0.5%, 2%, 3%
:: London, 0%, 2.5%, 4%
:: Prime central London, 2%, 4%, 5%
:: Central London, minus 1.5%, 2%, 4%