In terms of house prices, the outlook is much better than the previous forecast, although growth is projected to remain stunted this year. While the November forecast stated that property prices would drop by 5% this year, the new prediction is that they will dip by just 2%, less than half the previous forecast.
The forecast has changed to this degree due to the OBR’s mortgage rate forecast. As mortgage rates are anticipated to fall, they expect house prices to grow by 2% in 2026 and 3.5% in 2027 and 2028.
However, in the coming years, the OBR predicts that the average house price will surpass £300,000 by 2029, exceeding the previous peak of £285,000 in Q1 of 2027.
Explore the UK property market in greater detail with our 2024 buy-to-let area guides:
