The Building Societies Association has warned the reduction in the value of sterling could hamper the UK housing market in 2017.
Robin Fieth, chief executive of Building Societies Association, said the reduced value of the pound will undoubtedly be reflected in higher inflation with the cost of core commodities like food and energy rising.
He said this could dampen discretionary home buying, and may put a strain on some household budgets.
But Mr Fieth said the mortgage market will in part be supported by continuing robust employment and low mortgage rates, though fewer homes may be put up for sale.
He said: “We have already seen activity growing faster for re-mortgaging than for house purchase and this may continue.
“Economic growth generally may be slightly weaker, though it’s important to remember that even the supposedly pessimistic figures from the Office for Budget Responsibility still forecast growth.
“The potential for the Bank base rate to fall further this year has expired, according to the Bank of England, which may provide a little relief for savers, although the existence of the term funding scheme won’t help them.
“On Brexit, I agree with (prime minister) Theresa May, that showing your negotiating hand makes little sense – you wouldn’t in any commercial negotiation.
“But this stance must be balanced with the need to minimise uncertainty, avoid cliff edges and smooth the transition when we leave the European Union.”
Reflecting on 2016, Mr Fieth said 2016 had been a good year for building societies.
Looking at the macro-economic picture, he said the UK economy grew by an estimated 0.5 per cent in the third quarter, exceeding expectations.
He said the picture for building societies can best be summed up in their third quarter lending and savings figures.
These showed a 6 per cent increase in mortgage approvals on the third quarter of 2015, with 110,129 new mortgage loans approved – a 30 per cent market share.
Mr Fieth said this strong performance was against the backdrop of a slowing mortgage market in which approvals across all lenders fell by 5 per cent and the market slowing after the increase in stamp duty on second homes in April and the uncertainty following the European Union referendum in June.