House prices are forecast to fall by over 10% by 2025, according to the Office for Budget Responsibility.

In documents released alongside the Spring Budget, the OBR said that house prices are expected to fall by 10% by 2025 from quarter 4 2022 levels, with prices not expected to recover until 2027-28.

This is alongside a predicted 20% fall in property transactions relative to the fourth quarter of 2022.

The OBR noted in its Economic and Fiscal Outlook, published on Budget day, that ‘low consumer confidence, the squeeze on real incomes, and the expectation of mortgage rate rises to come are expected to contribute to continued falls in house prices and a reduction in housing market activity’.

Tories could lose votes over property price falls

The Liberal Democrats commissioned a survey that revealed almost two in five (38%) 2019 Conservative voters are less likely to back the party if house prices fall by as much as 10% next year.

And the party is calling for a £3 billion Mortgage Protection Fund to support hardworking families who are struggling to pay their bills.

Liberal Democrat spokesperson for Levelling Up, Housing and Communities, Helen Morgan MP, said: “For millions of families and pensioners this Budget is Jeremy Hunt’s house of horrors. People are seeing their house prices tumble, yet support from the Chancellor is nowhere to be seen.

“This is more proof that the out of touch Conservative Ministers are failing millions of hardworking families across the country.

“Rather than helping big banks the Government should introduce a Mortgage Protection Fund to protect families and pensioners from the Government’s spiralling rates.”