House price growth will drop this year, says business consultancy PwC – but the fall will be much less than it had originally predicted.

The firm predicts house prices will grow at 3.7% this year compared with the 1% it forecast when the results of the EU referendum came in.

Meanwhile, Zoopla has said that the value of residential property crept up by just 1.1% in the first half of this year, compared with 5.28% in the first six months of last year. Zoopla said this “marks a significant slowdown”. However, the portal also said that it was not seeing the “stark downturn in values” that had been predicted.

PwC says it is transaction numbers and not house prices which have been hit hardest by the Brexit issue.

Transactions have fallen from 155,000 in the first two months of last year to just 132,000 in the same two months this year.

PwC believes lack of supply will keep house prices up.

It estimates that house price inflation will rise slightly in 2018 to 3.9% but will be flat in 2019 and then hit 4.1% on average between 2020 and 2025.

Growth in London is predicted to be lower at 2.8% this year and 3.8% next, hit by political uncertainty and Stamp Duty changes.