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Demand for new homes declined to a six-year low as prospective home buyers wait for political and economic certainty over Brexit, the Federation of Master Builders reported Wednesday.

According to the annual survey of small and medium house builders, demand for new homes decreased 8 percent from last year to its lowest level since 2013.

Small house builders report current buyer demand at 2.9 out of 5.0, which was down from 3.14 last year. The balance is forecast to fall further to 2.75 next year.

About 48 percent of builders cited the lack of consumer confidence as reason for weak buyer demand.

Brian Berry, chief executive of the FMB, said small house builders are starting to see the effects of Brexit uncertainty taking its toll on consumer confidence.

Hopefully this is just a short-term pause, and that post-Brexit, demand will pick up once again, Berry noted.

"If not, and we enter a downturn period, the Government will need to consider how best to support SME house builders to avoid many firms leaving the sector," added Berry.