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Forecasts Reveal Steady Growth for the UK’s Housing Market Over the Next 5 Years

House prices across the UK are expected to grow 13.1% by 2021, as Brexit negotiations conclude and confidence in the market returns, predicts JLL.

House prices across the UK are expected to grow 13.1% by 2021, as Brexit negotiations conclude and confidence in the market returns, predicts JLL.

In their latest annual forecast report, which covers the UK’s housing market and wider economy, investment management company Jones Lang LaSalle (JLL) claims that the UK’s outlook for the next five years will be intrinsically dependant on the terms of Britain’s departure from the European Union.


Whilst growth in the housing market is predicted to be marginally subdued in 2017, with the next year expected to be marked by Brexit-related uncertainty, the housing market is forecast to stay robust over the long-term with prices across the country rising by 1% in 2018, by 2% in 2019, and up to 5% in 2021.


Demand for property is still expected to remain strong in 2017, leading to a projected growth figure of 0.5%, with many savvy buyers expected to take advantage of the market conditions.


By 2018, Britain’s exit strategy from the European Union will be clearer, shedding light on the country’s economic outlook and reducing uncertainty. Throughout the year, the economy is expected to expand at a stronger pace – leading to higher confidence in the UK’s property market.


After the UK formally departs from the bloc, JLL projects that growth in the housing market will be exponential; by 2021, prices would have increased by a substantial 13.1%. Regionally, Greater London and the North West will lead house price growth, with prices in these locations rising by 19.2% and 18.1% by 2021, respectively.


Forecasts for the UK’s rental market see the sector remain strong all throughout the Brexit negotiating years with more activity expected in the sector. JLL predicts rents will continue to accelerate at a favourable rate of 2.5% in 2017, 3% in 2018 and 4% from 2019 to 2021.


Whilst demand is expected to remain high, the report highlights that the market may experience a subdued level of supply for the remainder of 2016 in the rental market.


In this sector, JLL advises that government action will be required to make any significant impact on the rate of construction over the long-term, with financially attractive initiatives needed to address the critical shortage.


The report also emphasises that the house price deceleration witnessed prior to the Referendum vote does not mimic the events surrounding the 2008’s economic downturn, as it is caused by mere uncertainty over the economy’s outlook rather than a “fundamental lending and global crisis”.


According to JLL, there “is not a surrounding reason why house prices should decline notably” following Britain’s exit from the European Union, and it reaffirms that there will not be boundless job cuts or households financial problems.


Earlier this week, figures released by the Bank of England showed that the number of mortgage approvals rose by nearly 5,000 between August and September, indicating that after an initial pause, buyer activity is picking up rapidly following Brexit.

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