![\"Matt](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/06\/Matt-Swannell-Item-Club.jpg\")
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The housing market is set to lose momentum in the next 18 months as higher mortgage costs and a weakening economy weigh on demand, according to forecasts from one of the UK\u2019s longest-established economic forecasting groups.<\/p>\n
The Item Club says house price growth is set to slow sharply. Its latest outlook forecasts prices will rise by just 1.1% this year, followed by growth of only 0.7% in 2027. It is compared to 2.7% last year.<\/p>\n
Matt Swannell (pictured), its Chief Economic Adviser, told The Times: \u201cAn economy that\u2019s under pressure will cause the housing market to lose steam.<\/p>\n
Brake on demand<\/p>\n
\u201cRising living costs and higher joblessness will prove a brake on housing demand for the rest of this year and into next.\u201d<\/p>\n
Swannell added that the British economy is expected to \u201cflirt with recession\u201d later this year.<\/p>\n
The slowdown is expected to vary across the country, with a 0.1% fall in London house prices this year, but growth of more than 2% in the North East, North West and Yorkshire.<\/p>\n
The era of London driving the housing market is on hold.\u201d<\/p>\n
\u201cThe era of London driving the housing market is on hold,\u201d says Tim Lyne, Economic Adviser to the Item Club<\/a>. \u201cHigh prices, weakness in the flat market and landlords leaving the sector are weighing on the capital, while more affordable regions in northern England continue to outperform.\u201d<\/p>\n