New predictions suggest population changes will lead to surge in demand for rental housing and co-living spaces
The next property price and rent forecast has been released by another global real estate services firm, suggesting there are six “certainties” that will shape the market in the next five years.
According to JLL’s latest report, titled Living with 2020 Vision, housing will remain a key item on the political agenda over the coming years, whilst changes in population demographics such as families delaying having children will dampen interest for ownership and increase rental property demand.
Some of the UK’s main towns and cities will see the highest levels of housing demand, with the need for more housing density leading to a surge in co-living developments offering flexible and shared living spaces.
The report suggests that London will continue to be a top performer compared to other global property markets, whilst claiming that new housing will need to adapt to the desire for smart integrated technology.
Lastly, JLL is certain that social awareness around the planet’s climate will accelerate and feed into changing consumer habits, especially in relation to where and how they live.
Their property forecasts for the next five years assume the UK’s orderly exit from the EU in January 2020, a Conservative election majority in December, and greater business certainty resulting from trade negotiations leading to strong wage growth and a robust jobs market.
As such, JLL predicts that property prices across the UK will rise by a cumulative 14.8% by 2024 with key markets such as Central London (+18.2%), Greater London (+17.0%), and the North West (+16.5%) outperforming the rest of the country.
In the lettings market, the firm anticipates rental growth will remain steady over the next 5 years, underpinned by rising wages and the growing preference to renting over homeownership, although growth will be slightly constrained by affordability concerns.
Between 2020 and 2024, they forecast a cumulative increase of 12.0% for rents, growing by 2% to 2.5% each year across the UK.
Their housing market predictions are more reserved than Savills’ forecasts, which predicts UK-wide prices will rise by 15.3% and rents will increase by 15.4%.