Brexit uncertainty to hit UK housing market next year: realtor Countrywide

Brexit uncertainty is expected to hit the UK housing market next year, with prices likely to fall and not recover from the shock until 2018, according to a new report.

Fresh forecasts from estate agency Countrywide estimate that home price growth across the country would slow to 2.5 per cent this year, contract by 1 per cent in 2017, before finally recovering to 2 per cent in 2018.

The EU referendum is being blamed for the housing market uncertainty and is being eyed for its potential impact on economic fundamentals like trade and economic growth.

"Our central view is that the economy will avoid a hard landing, which is good news for housing markets.

"However, the weaker prospects for confidence, household incomes and the labour market mean that we do expect some modest falls in house prices before they return to positive growth towards the end of 2017 and into 2018," said Countrywide's chief economist Fionnuala Earley.

Stamp duty, especially in London's prime markets, will also play a role in driving down home prices, Countrywide explained.

Countrywide expects London's sky high prices to slow to 3.5 per cent growth in 2016, but contract by 1.25 per cent in 2017 and rise by 2 per cent the year after.

Prime property in the capital will see price growth drop by a stunning 6 per cent for this year, remain flat in 2017 and rise by 4 per cent in 2018.

Government statistics had to yet reveal a drop in market value after Brexit, with the June release only accounting for the initial seven-day period following the EU referendum results.

Numbers released by the Office for National Statistics last week showed house prices increased by £17,000 in the year to June, bringing the typical property value to £214,000.

It marked a jump of 8.7 per cent from the same month last year, as against an 8.5 per cent increase in the year to May.