Empowering the Freelance Economy

New OBR report says house prices to slide

"Rather than devising a quantum strategy, it would be great to have a housing strategy," said Riz Malik, Director at R3Mortgages.
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  • Houses prices are expected to fall in the UK, but when will they recover?
  • Liberal Democrats are calling for a £3 billion Mortgage Protection Fund
  • Polling finds house price fall could cost Conservative party votes at the next General Election
  • Mortgage brokers respond to the Spring Budget’s lack of mortgage holder concerns
  • BOE monetary policy meeting next week could provide more answers on interest rate direction

House prices are expected to fall by 10% by 2025, with prices not expected to recover until 2027-28. That’s according to Office of Budget Responsibility documents that were released alongside the Budget on March 15th, the Liberal Democrats have revealed.

This is alongside a predicted 20% fall in property transactions relative to the fourth quarter of 2022.

Liberal Democrats have dubbed this Budget ‘Hunt’s House of Horrors’ as polling commissioned by the party showed almost two in five (38%) 2019 Conservative voters are less likely to back the party if house prices fall by as much as 10% next year.

Mortgage Protection Fund

Liberal Democrats are calling for a £3 billion Mortgage Protection Fund to support families who are struggling to pay their bills as a result of the “Conservative’s mismanagement of the economy”, the political party said in a statement.

Rather than helping big banks the Government should introduce a Mortgage Protection Fund to protect families and pensioners from the Government’s spiralling rates.

Helen Morgan MP

Responding to these new figures, Liberal Democrat Spokesperson for Levelling Up, Housing and Communities Helen Morgan MP said:

“For millions of families and pensioners this Budget is Jeremy Hunt’s house of horrors. People are seeing their house prices tumble, yet support from the Chancellor is nowhere to be seen.  “This is more proof that the out of touch Conservative Ministers are failing millions of hardworking families across the country.

“Rather than helping big banks the Government should introduce a Mortgage Protection Fund to protect families and pensioners from the Government’s spiralling rates.”

Mortgage brokers respond to Hunt’s Budget

I’m sure first-time buyers struggling to get on the ladder or people worried about their mortgages will take consolation in the fact we will be investing in a £900m supercomputer. The Government is handing Labour the keys to Number 10 on a plate.

Riz Malik, Director at R3Mortgages

“Rather than devising a quantum strategy, it would be great to have a housing strategy,” said Riz Malik, Director at R3Mortgages.

“The Chancellor must have left part of his speech at number 11 Downing Street. Even potholes got more of a mention,” said Malik.

Malik believes the Chancellor is more concerned with “filling in holes in the ground” rather than “building on it.”

“I’m sure first-time buyers struggling to get on the ladder or people worried about their mortgages will take consolation in the fact we will be investing in a £900m supercomputer. The Government is handing Labour the keys to Number 10 on a plate. The saving grace is that increasing childcare provisions for every child over 9 months will potentially help with mortgage affordability,” said Malik.

Another mortgage specialist that found the Spring Budget lacking acknowledgement of mortgage holders and landlords was Justin Moy of EHF Mortgages.

“There was little to interest the mortgage holders and landlords this time, hopefully this is not being kept back for another day!” said Moy.

“The increase in corporation tax will affect those with Limited Company Buy to let portfolios, given their recent popularity that will bring in some additional income, but that may be balanced off with the higher interest costs!

“That Corporation Tax increase will negatively impact company owners who are using their profit for mortgage borrowing, and it may encourage more people to increase salaries (rather than dividends), so the self-employed mortgage market will have some changes in affordability,” he said.

All eyes on monetary policy next week

Freelancers and the wider self-employed community will be wise to keep an eye on monetary policy over the coming weeks.

“The expectation that inflation will fall to 2.9% by the end of the year is the most important information from the budget,” said Dean Esnard at Magni Finance.

“This will undoubtedly give the Bank of England confidence that the base rate increases have worked and hopefully the end is in sight. All eyes will now be on the monetary policy committee meeting next Thursday where we will really find out where we stand,” said Esnard.

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