London, the South East and East of England make up 70pc of the Treasury’s tax take from property transactions.
Mr Wishart said: “If we see a steeper drop in sales in these regions, the resulting drop in revenues would be larger.
“You do have lots of negative effects on housing demand in London. You’ve got lower migration than you used to have. You’ve got this increase in interest rates and you’ve got landlords exiting the rental market.
“If on top of that you have people getting really worried about job security, that could be pretty negative for London and South East house prices.”
‘The best we can hope for’
Doubts about the OBR’s property market predictions are not the only hole emerging in the fiscal forecasts. The watchdog’s predictions for inflation and growth also look increasingly optimistic as the war in Iran sends energy costs soaring.
Wage growth and employment may well perform worse than the watchdog expected, Mr Wishart warned, hitting the Treasury’s take from income tax and National Insurance.
If the war in the Middle East becomes more than a two-month energy price shock, Mr Wishart warned that Britain risked “a pretty steep, a pretty nasty recession” as the Chancellor may be forced to raise taxes to repair public finances even as growth slows.
Mr Wishart said: “Flat house prices is the best we can hope for.”
If house price growth were 0pc this year, Ms Reeves’s stamp duty take would be £11.5bn – which is £1.4bn less than expected, he said.
The Treasury was contacted for comment.
