This is a very interesting historical issue. There are a number of factors and a long dispute over how to interpret them.

The most important factor was the rise of working class politics. By 1918 Britain had nearly universal suffrage so the Labour party's potential constituency grew. Another was the vicious split in the Liberals between Lloyd George and Asquith which divided their votes, organisation, finances and supporters just when they were under pressure from Labour. Because of the British electoral system parties that decline can fall very fast once their vote drops below about 25%.

Then there is the war itself. The Liberals of 1906-14 were based on free trade, personal freedom and a social safety net to make up for the flaws of capitalism. The war destroyed trade and required severe repression of freedom. It also brought the coalition with the Conservatives who were able to claim at least some credit for victory and exploited the Liberals' divisions.

The debate is over whether the turning point was before or after 1914. George Dangerfield in The Strange Death of Liberal England suggested that Liberal decline was inevitable once labour politics became organised as Labour could always outbid them for workers' support. This was very influential but began to be questioned by historians who looked at constituency level and saw no evidence of decline prior to the war and the Asquith - Lloyd George split. Later theories put the turning point at a variety of dates.

I don't find the 'inevitabilists' convincing but I do see why the period 1900-30 would have been especially challenging. The project Asquith, Lloyd George and others were engaged in was to remain in the centre while offering enough social reform to make Labour unnecessary. The US Democrats managed it but the war and personal issues undermined the Liberals.