House prices will fall by almost 8% overall because of rising mortgage interest rates, according to the Office for Budget Responsibility.
It believes that prices will fall by 7.6% from their peak in the fourth quarter of last year to the final quarter of next year, bringing the average home down to £266,000.
It then expects prices to “recover slowly”, reaching late-2022 peak levels in the second half of 2027.
It added that prices would then rise 6.4% above this level by the end of 2029.
The peak-to-trough forecast is an improvement on its March predictions by 2.4 percentage points.
