House prices set to fall by 4.5% next year, says OBR

House prices are expected to decline by 4.5% next year, according to the Office for Budget Responsibility (OBR). The OBR's forecast suggests that prices will have fallen by 7.6% from their peak by the end of 2023 and it will take the price of an average UK home to a low of £266,000. The OBR's predictions have improved by 2.4 percentage points since March. However, the forecast indicates a fall of 4.7% in 2024 due to high mortgage rates. The OBR said transactions would fall by 6.9% in 2024, a 1.9 percentage point steeper decline than its March forecast, as mortgage rates remained stubbornly high and deterred buyers. Average mortgage rates are predicted to rise from 2% in 2021 to peak at 5% in 2027. That is 0.8 percentage points higher than the forecast in March and 2.2 percentage points above the average for the last decade. 

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