Property expert Savills has warned that economic uncertainty could cause housing transactions to drop from 1.25 million in 2016 to just 1.04 million by 2018.
Of these, buy-to-let (BTL) investors are expected to be particularly badly affected, with the stamp duty surcharge and tax disincentives potentially causing transactions to fall from 120,000 this year to just 80,000 in 2018.
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Lucian Cook, head of residential research at Savills UK, said: “There is no precedent for the current market and the Brexit vote makes forecasting more challenging than perhaps ever before.
“What is clear is that the housing market does not like political and economic uncertainty and this points to a lower growth, lower transaction market across the board.”
Savills also forecast UK house-price growth to remain flat over the next year to 18 months, growing just 2% by the end of 2018.
Elsewhere, rental growth is expected to outpace that of house prices as a result of the decline in BTL investment.
Over the next five years, average rents are forecast to rise by a total of 19% nationally and 24.5% in London.
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