After skyrocketing in value for years, house prices are expected to drop by up to 4% next year, according to Halifax.
This prediction came after the estate agent Savills estimated that once inflation is taken into account, house prices have fallen by more than 10% since their peak in 2022.
The knock-on effect of this is that the UK is no longer seen as such a lucrative property market for foreign investors, according to Mark Wilson, from Housearch.
Mr Wilson, from the online property marketplace, explained that while this will be seen as bad news by some, first-time buyers and those looking to move are profiting from the increased affordability.
He added: “There’s an acute housing crisis in the UK and first-time buyers were due some good news.
“After years where property prices have outpaced wage rises – it looks like they are finally going to come down.
“It would be a stretch to say that property will become cheap, and it will still be beyond the reach of many first-time buyers, but it is becoming more affordable which is a good thing.
“People will always look for something to blame, and in reality there are numerous variables.
“But in my view Brexit has played a key role by making the UK’s housing market – especially in London and the south east – less attractive to overseas investors.
“London – which was a key market for foreign investors – hasn’t been seen in the same light since the referendum.
“And the country as a whole is now seen by many as less open to business which turns investors off.
“Regardless of your personal view of it, Brexit isn’t going to change any time soon so first-time buyers especially look likely to reap the rewards of this dampening of demand.
“So if you’re looking to buy your first home or move to a bigger property then you can take solace from the fact that if you save up a decent deposit then it may well be within reach.”
Despite property becoming cheaper, interest rates have risen significantly since December 2021 in an attempt to control inflation – which at one point topped 10%.
Mr Wilson admitted this presented a significant challenge for anyone with a mortgage – although he pointed out that rates could come down as inflation falls while house prices may keep going down.
He spoke as Housesearch released an index yesterday which revealed that Britain was languishing in 58th place of its buy-to-let residential investments.
It is based on a composite score, factoring in a number of key property market performance and macroeconomic indicators released in the last months of 2023.
Ireland came out top where investors are still enjoying rental yields amongst the highest in the world despite house prices and mortgage rates continuing to climb.
