Two-year fall for prices predicted

House prices across Britain will fall for the next two years before starting to rise again, according to the UK Government’s official forecaster.

A drop of 9 per cent is expected between now and autumn 2024, the Office for Budget Responsibility (OBR) has stated.

The cost of a mortgage is also likely to stay higher than homeowners have become accustomed to in the last decade.

Higher mortgage rates and the wider impact of a slowdown in the economy, such as rising unemployment, will unite to push down house prices, the OBR said.

It forecast that there will still be an average increase in property prices this year of 10.7 per cent despite the recent slowdown. That will be followed by two years of falls, it predicts, with house prices down by 1.2 per cent next year, and 5.7 per cent in 2024.

The OBR suggests that will be the year when property prices will start to rise again at a rate slightly faster than people’s incomes – up by 1.2 per cent in 2025, 3 per cent in 2026, and 3.5 per cent in 2027.

However, the OBR pointed out there was still significant uncertainty over its forecast.