The housing market will decline for a decade due to higher rates

Aneisha Beveridge of the Hamptons said: “Given the cocktail of risks on the horizon, growth is likely to stall next year. Financial pressures fall on households as inflation bites and mortgage rates rise.”

The sharpest decline will be in the regions that recorded the highest growth in house prices this year. In the East Midlands, North West and North East, where house prices will rise by 6.5 per cent, 7 per cent and 6 per cent respectively this year, values ​​will fall by 1 per cent in 2023. In the West Midlands, Yorkshire and the Humber, values ​​will fall by 0.5 per cent. .

Across the Greater Rising house prices in London will be 0pc, but central London – the capital’s most expensive postcode – is forecast to grow by 1.5pc in 2023.

Beveridge said interest rates will be a key determinant of the housing market in the coming years. “While Bank Rate is likely to remain lower than it has been in the past, higher levels of mortgage debt will magnify the impact of even small rises.

“If mortgage rates go above the 5 percent mark, there’s a much greater chance that house prices will fall.”

Hampton predicts home prices will start rising again in 2024, when interest rates are expected to decline. Landlords will raise rents to pass on the cost of higher borrowing to tenants — though their ability to do so will be limited by tenants’ wages, Hamptons said.

It predicts 6% rent growth this year, followed by 5% growth in 2023.