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UK is one of the only major markets where house prices are unlikely to grow in 2018, according to new forecasts from Fitch Ratings. The ratings agency’s annual housing and mortgage outlook predicted average prices in the UK will be flat this year, with declines in London and the South East due to “Brexit uncertainty, stretched affordability and low income growth”.

The only housing markets assessed by Fitch with a worse outlook for 2018 were Greece, where it predicted a 2 percent decline, and Norway, where prices could drop 5 percent. In contrast, Fitch is expecting steady — albeit slowing — growth across most of the eurozone, as the European Central Bank’s stimulus measures continue to support markets.

In the United States, meanwhile, prices are expected to return to their highest levels since 2007 on the back of a fourth consecutive year of 5 per cent nominal price growth.The ratings agency said property has become “overvalued” in several cities on the west coast, but suggested “a meaningful correction should only be triggered by an unexpected economic shock”.

However, while the short-term outlook was broadly positive, Fitch did warn that many markets are approaching their top. Suzanne Albers, senior director for structured finance at Fitch, said: “Arrears are at very low levels in most markets. They will only move in one direction as mortgage rates rise.”

Canada, in particular, was highlighted as a potentially risky area, after prices in some cities such as Toronto and Vancouver climbed more than 50 per cent over the last two years.

Fitch’s analysis did not include Sweden, another market where significant house price rises over recent years have garnered attention and raised fears of a correction.