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UK house prices are projected to fall by 10% from their high in the fourth quarter in 2022, figures from the Office of Budget Responsibility (OBR) show.
This represents a drop of one percentage point more than the November OBR forecast.
Meanwhile, data showed real estate deals are expected to fall 20% from their peak in the same quarter.
Leading indicators from Halifax AND countrywide suggest that home prices have already fallen by 3-6% between their peak in mid-2022 and February 2023.
The main reasons for falling house prices and activity in the housing market are low levels of consumer confidence, declining real incomes and Expecting higher mortgage rates in the future.
Yesterday, Chancellor Jeremy Hunt announced that the OBR had stated that the UK “Don’t enter a technical recession this year.”
In his Spring Budget speech, Hunt said international factors, along with steps taken by the government, helped prevent a recession.
OBR forecasts a decline in inflation from 10.7% in the fourth quarter of 2022 to 2.9% by the end of 2023.
“We are following the plan and the plan is working,” Hunt said.
The prime minister’s overall goal is to bring inflation back to the Bank of England’s target of 2%.
Following the announcement of the budget, the real estate industry stated that was greeted by the chancellor “coldly”.
Forecasters said the government had to spend about £30bn due to lower energy costs than expected earlier last year.
However, the chancellor has decided to spend the cash he has on areas such as raising the energy price ceiling, providing larger pension baskets for the higher paid, and expanding free childcare.
Labor leader Keir Starmer said in his budget response that “there was no real ambition for housing”.
Real estate professionals expected the budget to be tight but hoped to see some action on issues such as looser planning rules, green homes, stamp duty reform or homeowner tax breaks.
But there were few in those areas, and the sector met the announcement with a mixture of disappointment and resignation.
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