By Kingsley Adegboye

Fear of interest rate rise and Brexit is expected to either halt house price growth or result in a small below-inflation rise.

House price growth looks set to judder to a halt in 2018 or at best manage a small below-inflation rise, as the twin spectres of Brexit and rising interest rates put the brakes on the property market.

UK housing estate

Following what some have called a lacklustre year, homeowners and those looking to sell in the coming months have been told to expect an underwhelming and subdued 2018, with a number of leading commentators predicting UK house prices will either stay flat this year or perhaps rise by 1 per cent or so.

However, the prognosis for London – which according to the estate agent, Savills, has experienced house price growth of 70 per cent over the past decade – is more downbeat, with many economists forecasting that prices in the capital will once again slide into negative territory.

A number of commentators are penciling in UK average price growth of about 1%, which would mean property values falling in real terms. Of the two big lenders that operate well-known price indices, Nationwide said it expected property values to be “broadly flat in 2018, with perhaps a marginal gain of around 1%”, while Halifax allowed itself some wiggle room by predicting UK growth in the range of 0% to 3%.

Meanwhile, according to a Reuters poll of 28 housing market specialists published last week, property prices will rise by 1.3 per cent nationally, but fall by 0.3 per cent in London. The former figure is less than half the current rate of consumer price inflation.

But while much of the language used in the forecasts is gloomy – “a weakening market”, “muted” and “another tough year” are among the words and phrases that crop up – such predictions are likely to be welcomed by the burgeoning numbers of aspiring first-time buyers who currently cannot afford to join the housing ladder.

Many homeowners had become used to viewing their property as a money-making machine, and some will find it hard to disagree with the assessment of Miles Shipside, a housing market analyst at the property website, Rightmove, that “homeowners have had a good run” with the national average price rise over the last six years totalling just shy of 31 per cent  – equivalent to 4.6 per cent a year.

Economists predict that a range of factors will weigh on house price growth in 2018.