AN INTERNATIONAL estate agency has warned that house prices are set to grow by just one per cent this year.

A report by Knight Frank describes how house price growth has been slowing since the summer of 2014 and predicts that it will not pick up until 2018.

It expects prices to rise UK-wide by 2.5 per cent in 2018 and to have risen by 14.2 per cent by 2022.

The report highlights key factors behind the slowdown in housing market activity, including lack of available housing stocks for potential buyers. It also warns of challenges facing the housing market including the uncertainty surrounding Brexit and the potential for a slowdown in economic activity.

Meanwhile it also warns that affordability is becoming a challenge in many areas of the country and could lead to a slowdown in the market: “The shortage of housing stock available to buy coupled with ultra-low mortgage rates have put a floor under pricing across the UK, but the question of affordability is becoming more pressing in some areas.”

The report predicts that the slowdown in house price growth in London will continue for the rest of the year, however it expects prices in the capital to rise by two per cent next year, by 2.5 per cent in 2019, three per cent in 2020 and by 5.5 per cent in 2021.