UK house prices could decline if there are any further negative shocks to the housing market or wider economy, the European Mortgage Federation has warned.
The EMF was writing in its quarterly review of European mortgage markets.
The EMF said: “The housing market in London, which is often a lead indicator of wider UK housing trends, has hovered just above zero price growth since Q1 and dipped briefly into negative territory in February.
“The central scenario remains one of low single figure growth, but there is a material risk that house prices could see a modest decline, especially if there are further negative shocks to the housing market or wider economy.”
Elsewhere the EMF commented that UK first-time buyer numbers are holding up well, owing to government support. However homemover and buy-to-let purchase activity is depressed.
Remortgaging was said to be “very strong” in both buy-to-let and residential, owing to the number of fixed rate mortgages becoming available for refinance and the prospect of a Bank base rate rise this year.