The trend of upwards-only house prices is about to break, with the worst impact being felt across London, according to a respected economics think-tank.

The Centre for Economics and Business Research (Cebr) says the UK housing market is at a “turning point” and that average house prices will drop 0.8% in 2015 having grown 7.8% this year.

In London, it says, the impact will be worse with 17.1% growth this year turned into a 2.6% slide next year. Cebr said leading indicators already point to price declines, fewer enquiries and properties sitting on the market for longer.

Unaffordable prices, a fall in overseas demand and political uncertainty after the Scottish independence vote and ahead of the general election are all factors working against the housing market, it said.

Other factors are at play too, according to Scott Corfe, head of macroeconomics at Cebr: “Tougher mortgage eligibility criteria, high deposit requirements and concerns about future rate rises are starting to take steam out of the UK housing market.

“But the risks should not be exaggerated – the price falls forecast for next year will be modest and we shouldn’t be too worried about this – we are not anticipating a crash. The market is adjusting after getting ahead of itself at the start of 2014.”