Property consultancy JLL is predicting a significant increase in rents over the next five years, with a forecast of a 17% rise by the end of 2029. This prediction comes as house prices are also expected to climb by 20% during the same period, driven by lower mortgage rates that are attracting buyers back into the market.
The revised forecasts for the 2025-2029 period were made following the Chancellor’s Budget announcement. Despite the government’s efforts to accelerate housebuilding, JLL anticipates a lack of supply and more competitive mortgage rates will continue to fuel the rise in house prices over the next five years.
In particular, London house prices are expected to see a substantial increase of 21.6% over the five-year period, with a shortage of new homes coming onto the market for sale. JLL also predicts that lower value markets will experience stronger growth at the beginning of the forecast period, while more expensive markets will outperform as interest rates remain low in 2026 and 2027.
Director of residential research at JLL, Marcus Dixon, acknowledges the challenges that lie ahead despite the positive forecasts. He highlights potential issues such as landlords offloading inefficient properties due to EPC C deadlines, which could push rental prices even higher. Additionally, the Renters Right Bill may restrict growth in certain markets and lead landlords to exit the rental sector.
While the government has set ambitious targets to boost housebuilding and support renters, Dixon emphasizes the need for a clear roadmap to achieve these objectives. Despite uncertainties surrounding Labour’s first Budget in 14 years, JLL’s forecasts for the residential sales and rentals markets remain largely unchanged.
Looking ahead, it will be crucial for policymakers to address the challenges facing the property market, including the impact of regulatory changes on landlords and the need for increased housing supply. By adopting a strategic approach, the government can work towards achieving a balance between supporting both buyers and renters in the coming years.