The vote to leave the European Union will bring house prices down by 1% in 2017, according to estate agents Countrywide.
Whilst what “Brexit” means is still being discussed by those who campaigned for it, economists at Countrywide are predicting prices could fall by 6% by the end of the year in London alone.
Countrywide said the Brexit vote had “unsettled the UK economy” due to the uncertainty surrounding the terms of Britain’s new relationship with its European neighbours.
“We expect a weaker economy and for this to affect house prices and transactions through consumer confidence, household incomes and the labour market. After several years of double-digit price growth, expectations of future capital gain have weakened in many areas leading to reduced demand.”
Fionnuala Earley, Countrywide’s Chief Economist, said: “Forecasts in the current environment are trickier than ever as the vote to leave the EU has thrown up many risks.
“Not all of the corrections are due to the vote to leave the EU. Stamp duty and weaker house price growth expectations, particularly in London’s prime markets, have a part to play. There are supports to prices on the supply side from the continuing mismatch of supply.
“On the demand side, ultra-low interest rates and the significant discounts available to overseas buyers resulting from the fall in sterling will help support prices too.”