Real estate prices won’t rise again until 2025, says a major real estate company

  • JLL said the UK property market remained “resilient” despite higher interest rates
  • House price declines in 2023 are expected to be “less significant” than in 2008

According to figures from property group JLL, house prices across the UK will have fallen by 6 per cent by the end of 2023 and by 3 per cent the following year.

However, it said the property market remained “more resilient than expected” amid rising interest rates and cost of living pressures, meaning declines would be “less significant” than at the height of the 2008 global financial crisis.

Tighter lending rules after 2008 and higher equity levels mean that while the property market has come under pressure, “we are not yet seeing any significant signs of distress,” a report said.

UK house prices: House prices across the UK could fall by 6% by the end of 2023

UK house prices: House prices across the UK could fall by 6% by the end of 2023

The group expects UK house prices to bottom in 2024, but claims there will be annual declines in most markets by the end of the year.

After that, real estate prices are expected to rise again in 2025.

The report added: “We forecast a return to growth in our 2025 forecast as fixed rates begin to decline and we have greater certainty about the outlook.”

In mortgage deals, JLL expects fixed rates to become cheaper as the prospect of further rate rises fades, but says households are still facing higher interest rates than many have been used to for some time.

Separate data from the Bank of England last month showed that mortgage approvals for home purchases, an indicator of future borrowing, fell from 45,400 in August to 43,300 in September, the lowest level since January.

The shortage of homes coming onto the market for sale is likely to remain a thorny issue.

JLL said: “JLL expects this undersupply to continue to worsen, with a cumulative shortage of 720,000 homes between 2023 and 2028.”

Marcus Dixon, director of UK residential property research at JLL, said: “Despite the uncertainties facing the UK property market, we have seen resilience and stability over the past year.”

“Looking forward, we forecast prices to bottom in 2024, with single-digit annual declines likely.”

“The UK housing market still faces supply challenges, with a cumulative shortfall of 720,000 homes expected between 2023 and 2028.”

“Removing these structural barriers is critical to achieving meaningful increases in supply and alleviating affordability issues.”

Figures from Nationwide released on Wednesday showed house prices beat expectations in October with a 0.9 per cent rise, although they remained 3.3 per cent lower compared to the same period last year.

According to the index, which is based on home mortgage lending, the average house price rose from £257,808 in September to £259,423 in October.

Nationwide said prices were likely to remain “subdued”.

JLL said: “Thirteen months after peaking in summer 2022, house prices have fallen 5.3 per cent, according to figures from Nationwide.”

“This compares to a decline of more than 13 percent at the same time following the 2007 peak.”

Rents are rising: According to JLL, the cost of renting a home could rise by 5% in 2024

Rents are rising: According to JLL, the cost of renting a home could rise by 5% in 2024

Rental costs are rising for tenants

While property prices may fall, JLL said tenants should expect further rent increases in the coming years.

It said: “The imbalance between rental inventory and tenant demand led to double-digit rental growth in 2023.”

“We expect a shortage of new rental stock over the next five years. With fewer new home completions and a more difficult interest rate environment, we will see rent growth that outpaces wage growth.”

JLL expects rents across the UK to rise by 5 per cent in 2024.

Rental growth is expected to be higher in London as greater competition for inventory and affordability issues in the sales market drive demand.

They expect that lower mortgage rates from 2025 will lead to more renters moving into their own homes, which will provide some relief to the market.

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Drew Weisholtz

Drew Weisholtz is a Worldtimetodays U.S. News Reporter based in Canada. His focus is on U.S. politics and the environment. He has covered climate change extensively, as well as healthcare and crime. Drew Weisholtz joined Worldtimetodays in 2023 from the Daily Express and previously worked for Chemist and Druggist and the Jewish Chronicle. He is a graduate of Cambridge University. Languages: English. You can get in touch with me by emailing:

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