In Q3 of 2023, when the interest rate rose to its current level, housing transactions dropped to 256,000, more than 40% lower than the post-pandemic peak. According to the OBR, there are signs that demand is beginning to recover due to mortgage rates for new mortgages falling in anticipation of a lower interest rate.
In an optimistic turn, the OBR revised their forecasts from November. While they previously stated that residential property transactions are likely to drop by 7%, now they believe that the figure will be broadly flat in 2024.
They predict that transactions will completely recover and return to pre-pandemic levels in 2025. This is two years earlier than the November forecast stated, showing a big turnaround in sentiment.
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