The Office for Budget Responsibility (OBR), which analyses government’s finances, has predicted that house prices will fall by 0.3 per cent in 2019.
It’s a sharp contrast to its five-year forecast made in October 2018, which saw house prices rise by more than three per cent in the last three months of the year.
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Experts have blamed the lagging property market on a dragged out Brexit and lack of affordability.
In the report published on the same day as the Spring Statement, the OBR said: “Indicators of housing market activity and price expectations have deteriorated significantly since our October forecast and are consistent with a further fall in house price inflation.”
Over the past four months, house price growth has “slowed significantly” reaching 2.7 per cent down from 4.6 per cent the year before.
Now, it expects growth to slip below zero for the first time since 2012, and far below the record rate of seven per cent recorded in 2016.
The damning forecasts come as the Royal Institute of Chartered Surveyors (Rics) published its monthly market survey and warned that more than three quarters of the 300 surveryors who gave feedback believed Brexit was holding back the market.
It believes that drawn out uncertainty is putting off buyers and sellers who would rather wait for the outcome of the negotiations.
The group also found that activity in general has seriously slowed down, with new buyer enquiries and agreed sales falling for the sixth month in a row.
Hew Edgar of Rics said it was clear from the survey that the “wearisome state of British politics that has arisen from Brexit” is taking its toll on housing.