OBR Warns House Price Growth and Sales Volumes Set to Cool

The Office for Budget Responsibility has forecast that UK house price growth and the volume of property transactions are set to slide, as The Negotiator reported. For a market that has spent much of the past two years absorbing higher borrowing costs and stretched affordability, an official fiscal watchdog signalling further softening carries real weight. Unlike the often breezy pronouncements of estate agents or mortgage brokers with a vested interest in confidence, the OBR's forecasts feed directly into Treasury planning and public spending assumptions, which means this is not a throwaway prediction but one that will shape policy thinking in Whitehall over the coming year.

Why does this matter so much to professional investors and landlords? Because transaction volumes, not just headline prices, are the lifeblood of the property industry. Conveyancers, mortgage brokers, surveyors, removal firms and letting agents all depend on deals completing, not simply on valuations holding steady. A slowdown in transactions squeezes liquidity across the entire chain, making it harder for sellers to find buyers at the price they want and for buyers to secure the property they have set their heart on. If the OBR is right that both price growth and transaction numbers will slide, the practical effect is a market that feels sluggish even if outright price falls are modest.

The regional picture, while not detailed with specific figures in the source material, is worth considering through the lens of PropertyNews analysis. Markets that have been running hottest, London and the commuter belt around Surrey in particular, tend to be most exposed when transaction volumes contract, since these areas rely heavily on chains of buyers trading up and down. By contrast, more affordable regional cities such as Manchester, Birmingham, Leeds, Liverpool and Newcastle have historically shown greater resilience in subdued markets, partly because first-time buyers and investors chasing yield continue to see relative value there even when national sentiment softens. That said, no city is immune to a broader slowdown in deal activity, and agents in every region should expect longer marketing periods and more price negotiation.

For buy-to-let landlords, a forecast slide in transactions is a double-edged signal. On one hand, fewer sales can mean reduced competition for stock, potentially allowing patient investors to negotiate harder on price. On the other, a weaker transactions market often coincides with tighter mortgage underwriting and more cautious lender appetite, which can make refinancing or expanding a portfolio more complicated. Landlords considering disposals should also note that a slower market typically means longer void periods between an instruction and a completed sale, which has cash flow implications worth planning for now rather than discovering mid-transaction.

First-time buyers may, paradoxically, find some relief if the OBR's prediction materialises. Slower price growth reduces the risk of the goalposts moving further out of reach while a deposit is being saved, and reduced competition for transactions can translate into more negotiating power at the point of offer. Developers and commercial investors, meanwhile, face a different calculation. A slide in transactions typically feeds through to reduced appetite for new-build completions in the short term, since developers price absorption rates into their build-out schedules. Commercial investors with exposure to residential-linked assets, including build-to-rent and student accommodation, should watch for knock-on effects on rental demand if fewer households are able to complete purchases and instead remain in the rental sector for longer.

Looking ahead six to twelve months, the sensible assumption for market participants is that transaction friction increases before any meaningful change in headline price trends becomes visible. Investors who have been waiting for a clearer signal on direction now have one from a credible official source, and the prudent response is not panic but recalibration: tighter underwriting of new purchases, closer attention to realistic pricing when selling, and a renewed focus on markets and property types that have historically weathered slower transaction environments with the least disruption. The OBR's forecast should be read as a call for discipline rather than alarm, and those who adjust their expectations accordingly will be better positioned than those who assume the frantic pace of recent years will simply resume.