Property consultancy JLL has projected a striking 20% increase in UK house prices over the next five years, spurred by lower mortgage rates and a limited housing supply. The firm’s forecast highlights mounting challenges in meeting demand as potential buyers flock back into the market.
In a recent report, JLL outlined expected national growth of 19.9% from 2025 to 2029, with London anticipated to see even higher gains at 21.6%. “London house prices are set to increase significantly due to a sustained shortage of new homes reaching the market,” JLL noted, underscoring that the capital’s housing shortage will intensify price pressures.
Regional and Rental Market Shifts
JLL forecasts that northern England and Scotland will experience the most robust price increases, driven by growing demand and relative affordability. However, higher mortgage rates continue to temper growth in pricier regions, particularly in southern England and London, where market activity has slowed this year.
Meanwhile, the rental market is expected to remain under strain, despite more renters transitioning to homeownership. JLL anticipates rents will rise by an additional 17% by the end of 2029, as demand persists for rental properties amid limited housing stock.
Construction Shortfall and Landlord Exodus Expected
In the realm of new builds, JLL projects approximately one million new homes will be constructed across the UK between 2025 and 2029. This falls short of the government’s target of 1.5 million homes, signalling continued undersupply issues that could impact affordability.
JLL also foresees a potential exodus of traditional landlords from the market, a trend that could be exacerbated by recent policy changes. Following last week’s Budget, which included a 2% increase in Stamp Duty for additional properties, JLL predicts more landlords will leave the rental sector, potentially reducing rental stock further.
As market conditions evolve, these trends suggest a challenging landscape ahead for both homebuyers and renters across the UK.