A 2.5% house price growth per annum over the next 5 years is the new headline figure
In their latest residential report, global services firm JLL explores the factors triggering structural changes in the UK’s property market, indicating that political legislations and the advent of new technologies in the construction industry (i.e. Build Information Modelling), will leave a positive mark on the sector.
Whilst house price growth is expected to remain moderate in the short term, the market will achieve greater stability in the medium term, says JLL – benefitting the government, buyers, sellers and industry participants.
The UK’s exit from the European Union is not expected to interfere with the transition towards a healthier housing market; JLL believes that while scenarios for a post- Britain vary, forecasts lean towards an upside in the risk balance scale, both in terms of the economy and the property market.
In the short-term, growth in property prices is expected to average 1% in 2018 and 2% in 2019, with transaction levels remaining just below 1.2 million pa. Around 2020-2022, property prices are due to improve steadily, with increases of 3.5% pa.
The lettings market is to remain more robust, according to the company, with rental growth averaging 2% pa in 2018 and 2019, and continue to expand – achieving rises of around 2.5% pa during the 2020-2022 period – supported by the continued unaffordability in the housing market and the rise in popularity of renting.
In terms of supply, housing starts are forecast to stay at circa 200,000 pa during 2018-2019, and increase to 215,000 homes a year by 2022.