. The OBR was set up by the Government to give economic forecasts and analyse public spending. House prices are forecast to drop by 9% between the fourth quarter of 2022 and the third quarter of 2024. Average interest rates on current mortgages are expected to peak at 5% in the second half of 2024, the highest level since 2008, the OBR said. House prices will start falling this year, the OBR said ( Anadolu Agency via Getty Images) Due to large numbers of home owners sitting on fixed-rate mortgages, higher interest rates on new deals take a while to feed through to the stock of existing home loans. However, the OBR said its forecast was uncertain due to how sensitive house prices are to mortgage rates and how unpredictable homeloan prices are. The house price prediction was released as Chancellor Jeremy Hunt said the stamp duty cuts previously announced in the Mini-Budget will remain in place - but only until March 31 2025. Stamp duty is a tax you pay when buying a property, with how much you pay depending on the property price and if you're a first-time buyer. The Chancellor unveiled big changes to the homebuying tax in his Autumn Budget today. Former Chancellor Kwasi Kwarteng cut stamp duty in his disastrous Mini-Budget in September. The normal system in England and Northern Ireland is to pay stamp duty on properties worth over £125,000 if this is your main residence - or £300,000 if you're a first-time buyer. The £125,000 limit was then d){kind=link}
The typical house will drop in value by almost 10% by 2024, the Office for Budget Responsibility says, with property prices expected to start falling from later this year
House prices are expected to fall by 9% over the next couple of years, experts warn.
This will be because of high mortgage rates making homes more unaffordable and the UK slipping into recession.
The latest gloomy prediction about the future of property prices comes from the Office for Budget Responsibility (OBR).
The OBR was set up by the Government to give economic forecasts and analyse public spending.