According to Budget forecasts, house prices will rise 13% over the next five years after a record 2021.










According to Budget forecasts, house prices will rise by 13% in the next five years after a bumper 2021.

The Office for Budget Responsibility (OBR) said property values were on course to rise by 8.6 per cent this year – significantly faster than previously expected. 

Prices are expected to rise each year until the 2026 end of its forecast. 

Increase: The Office for Budget Responsibility said property values were on course to rise by 8.6 per cent this year

Increase: The Office for Budget Responsibility said property values were on course to rise by 8.6 per cent this year

OBR in March predicted that prices would fall in 2022 and then return to growth in the following year.

It believes that this outlook was too pessimistic due to the rise in property values during coronavirus crises. After months of lockdowns, the pandemic triggered a ‘race to space’ in which families sought larger homes. 

The boom in mortgages and savings was caused by cheap mortgages, and the stamp duty holiday reduced it to just months, the spending watchdog for the Government said yesterday. 

According to the OBR, the boom caused house price increases ‘far beyond’ what they would have expected. They reached record highs in June. 

It updated a March forecast, which predicted that prices would fall by 1.7% in 2022. However, it said they will rise 3.2 percent. 

Figures last week showed house prices rose £25,000 in a year between August 2020 and this year. The average home cost £264,000 in August, the Office for National Statistics (ONS) said, close to the record in June of £265,000. It meant that house prices had risen by more than 10% in the past year, one of largest rises ever recorded. 

The ONS reported that the housing market is returning to normal following a period when activity was elevated during the pandemic as well as the stamp duty holiday. 

The tax break removed tax on sales below £500,000 in England, letting sellers bump up prices as buyers’ costs were reduced. 

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