Prime central London property prices will rise two per cent this year, says Countrywide

Prime central London property prices are expected to rise two per cent this year

Prime central London (PCL) property prices will rise two per cent this year followed by four per cent and five per cent respectively in the next two years, according to Countrywide.

The rise in PCL property prices comes after two years of falls, the property services group pointed out.

Greater London is likely to see price growth slow to zero per cent in 2017, Countrywide said, before rising by 2.5 per cent in 2018 and four per cent in 2019.

Read more: Mapped: House price changes in every London borough since the Brexit vote

Nationally, Countrywide expects average house price growth to fall to 1.5 per cent in 2017 compared with five per cent in 2016.

"While the first half of 2018 is likely to be more difficult, we forecast prices to end the year two per cent higher. By 2019 we expect house prices to be growing at an annual rate of three per cent," the report warned.

This squeeze on household incomes is one of several factors dampening house prices, according to Countrywide. UK inflation held steady at 2.6 percent year-on-year in July, but wage growth is behind at 2.1 percent, according to data published last week by the Office for National Statistics.

“Economic conditions for households will remain challenging over the next year as inflation eats into budgets and interest rates begin to rise,” said Fionnuala Earley, Countrywide’s chief economist.

“In addition, fewer landlord purchasers and the later age at which people buy, is affecting the level of demand. But we expect the UK economy to recover and wage growth to pick up in response to global growth.”

The Countrywide report comes after the Royal Institution of Chartered Surveyors (RICS) warned earlier this month that British house prices rose at their slowest rate in over four years in July, while the number of house put up for sale fell for a 17th consecutive month.

"Sales activity in the housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come," RICS chief economist Simon Rubinsohn said.

Read more: UK house price growth ticks up - but London prices are falling

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