House prices are forecast to fall by 1% next year as the economy weakens, according to the UK’s biggest estate agent.
Countrywide, which has over 1,500 branches in the UK, have predicted the drop in house prices due to the weakening economy caused by uncertainty after the vote to leave the EU.
The estate agent said that all regions will be affected apart from Scotland, who can expect house prices to remain the same. Prices are expected to rise 2% this year, decreasing from 6.5% in 2015.
House prices will fall next year due to weakened confidence among buyers, reduced household incomes and an increasing amount of unemployment said, Fionnuala Earley, chief economist of Countryside.
However, prices will start rising again at the end of next year, at a minor increased rate of 2% in 2018.
Ms. Earley added: “Forecasts in the current environment are trickier than ever as the vote to leave the EU has thrown up many risks. 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.”
Even before the referendum, price houses already began to slip in June, particularly within the weeks leading up to the vote.
Research by the Royal Institution of Chartered Surveyors (Rics) found that nearly half (45%) of surveyors agreed that prices were decreasing, the highest number seen since the survey began in 1998.
The supply of homes for sale fell at its sharpest rate on record since the financial crisis in 2008 and the demand from buyers also fell to its lowest ever level.