Oct 28, 2021
Budget 2021: Surge in house prices predicted to slow
The UK's pandemic house price boom is forecast to come to an end, but property prices are still expected to rise in each of the next five years. Some surveys have recorded house prices rising at a rate of more than 10% a year but the government's official, independent, forecasters have said this will drop to 3.5% by 2026.The Office for Budget Responsibility also said that mortgage rates are likely to rise from record lows. Although the surge in values was expected to slow, prices would be higher over the next five years than the OBR forecast before the Budget in March, it said. The chart shows how the OBR had predicted a fall in house prices in the near future. "Homeowners need to be aware that it is a case of if, not when, for an interest rate rise now and the clock is ticking on the record low mortgage rates we've all become accustomed to," said Laura Suter, from investment platform AJ Bell.House price rises of 1.9% in 2024, 2.9% in 2025, and 3.5% in 2026, have been predicted by the OBR, although history shows that longer-term forecasts of house prices are more difficult to make accurately.
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