Interest rates could hit almost zero in the next two years as Brexit hits the housing market’s prospects, according to forecasts by JLL and Oxford Economics.

A report, Unchartered Territory, by JLL, forecasts that the Bank of England base rate could be cut to 0.1% this year and stay the same until 2019 when it will increase to 0.5% and then hit 1.5% by 2021.

They expect the housing market to be subdued in the next two to three years before a London-led rebound in 2020.

While recognising that much is determined by the type of Brexit deal, JLL is predicting an 11% fall in transactions in 2017 to 1.08million with prices broadly flat.

However JLL expects rents to increase around 2%.

This coincides with when the Government has said it would invoke Article 50 in March 2017.

In 2018 it predicts house building to be low and that demand will accelerate, with prices increasing 1%. But rental growth will rise by 3%, according to the report.

By 2019-2021, with Article 50 likely to have been triggered, JLL says home owners and buyers will feel more confident. By 2019 it predicts transactions will increase to 1.15million and hit 1.26million by 2021 with house prices growing 4% in 2020 and 5% the following year.

That is still below the 7.8% growth in 2015, according to Land Registry figures.

Neil Chegwidden, residential research director at JLL, said: “We are expecting UK housing markets to slow from current levels both in terms of transactions and price growth next year.

“This will be driven by Brexit uncertainty and a slightly softer economy. The outlook, however, is particularly unpredictable presently.

“Over the next couple of years we expect periods of volatility in terms of household and business sentiment as the Brexit roadmap unfolds, but the underlying shortage in supply will provide support in value terms.”