8:03 AM, 22nd November 2022, About 2 weeks ago 1
House prices in the UK are predicted to fall for the next two years before they will increase again, the government’s official forecaster says.
According to the Office for Budget Responsibility (OBR), it says that between now and autumn 2024, house prices will drop by 9%, the body’s Economic and Fiscal Outlook report shows.
The OBR says an economic slowdown, along with rising unemployment and high mortgage rates, will work together to push house prices down.
But, despite the recent slowdown in the UK’s economy, the organisation is forecasting a rise of 10.7% this year for average property prices.
It says that house prices will fall by 1.2% next year and 5.7% the year afterwards.
Then, in 2025 prices will rise by 1.2%, in 2026 they will grow by 3% and in 2027, they will grow by 3.5%.
The OBR report highlights that there are ‘significant concerns’ over its forecasts because of how sensitive house prices are to rising mortgage rates and borrowing costs generally.
The OBR also says that mortgage costs will probably remain higher than many borrowers have become accustomed to over the last decade.
Meanwhile, the managing director of one leading financial services firm says that while last week’s Autumn Statement did not affect the mortgage market – he did highlight that this wasn’t the case for the buy-to-let sector
Kevin Roberts, the managing director of Legal & General Mortgage Services, said that the sector was already feeling the effects of rising mortgage rates.
He said: “The new changes to capital gains tax, will add further pressure to landlords and we are likely to see more rental properties put up for sale.
“A greater supply of housing for buyers will definitely be welcomed by some, but this could prove a painful development for renters.”
He added: “The rental market is already suffering from a lack of stock and rising rents.
“This is an area of the market that needs more government attention and this latest Budget offered little in the way of relief for renters worried about the cost of living this winter.”
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