The 2025 Budget provided clarity but little else to materially change our outlook for prices and rents. But a positive response from the bond markets and the Bank of England in rate cutting mode means we are seeing more competitive mortgage rates enter the market, which will, we expect, support activity and price growth over the next five years, albeit at the lower end of historic norms.
Forecasts post-Budget
The High Value Council Tax Surcharge is perhaps the least damaging to market activity of the proposed ‘mansion’ taxes floated pre-budget. And while we expect that it may impact some buyers and homeowners’ decision to purchase, the annual charge is more likely to be begrudgingly absorbed rather than directly impacting decision-making.
The 2% additional tax rate for property income also hits smaller landlords, many of whom have seen profit margins shrink and are facing additional regulatory hoops with the introduction of the Renters’ Rights Act.
We expect this will further encourage landlords on the fence to exit, constraining supply and putting upward pressure on rents.
The Budget contained many references to growth, but there were few clear policies that signalled it, a view shared by the OBR in their downbeat forecast for growth and productivity.
So, in the absence of any demand side incentives for housing we are relying on an improvement in wider market conditions to support growth. Here there is some more positive news, with the Bank of England now in the rate cutting phase of the cycle, and expectation for up to three further cuts to the Base Rate by next summer. An easing in rates and some improvements in housing affordability, with house prices having underperformed wage growth, will help here too. But we expect this will mean a recovery to long term norms, rather than any significant outperformance.
House prices
JLL forecast house prices will rise by 20% over the next five years UK-wide. More affordable regions are expected to outperform in the near-term, with London and southern England forecast to see stronger growth towards the back end of our five-year period.
Overall, we expect growth of 17.6% across Greater London between 2026 and 2030, compared with 23.4% in the strongest performing English region the North West. Scotland and Wales, usually seeing stronger growth at the tail end of the housing cycle are expected to see prices rise by 24.6% and 23.4%, respectively.
For central London, clarity around taxation, and the absence of some of the more draconian policies floated pre-Budget will confine the most significant price falls to 2025. JLL’s central London sales business had its busiest month in 17 months in November, with anxious central London buyers holding off until the Budget now transacting.
Price falls in central London are expected to bottom out in H1 2026, as fears of more onerous tax changes subside post-Budget. But with a more domestic focussed buyer pool still looking for value we don’t expect this will translate into meaningful price increase until later in the five-year forecast period. Meaning prices ending 2026 flat and rising 17% in the five years to 2030.
JLL house price forecast
| 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Change 2026- 2030 | |
|---|---|---|---|---|---|---|---|
| UK | 1.5% | 2.0% | 4.0% | 4.5% | 4.5% | 3.5% | 19.9% |
| Greater London | -1.0% | 1.0% | 2.5% | 3.5% | 5.0% | 4.5% | 17.6% |
| Central London | -5.0% | 0.0% | 2.0% | 4.0% | 5.0% | 5.0% | 17.0% |
Source: JLL Research
Rental market
The additional tax burden for landlords post-Budget, alongside concerns over the implementation of the Renters’ Rights Act will mean constrained supply continues, as more landlords exit than enter the sector, supporting rental growth.
We forecast rents will rise at marginally above wage growth over the next five years, with 15.9% growth between 2026 and 2030 nationally.
A more settled outlook for inflation and wages means our expectations on rental growth are more muted than recent highs. However, this reflects a return to pre-pandemic norms rather than a fundamental shift in market dynamics.
Rental growth is forecast to be marginally higher in London, with growth of 17% across Greater London and 16.5% in central London over the same period.
JLL rental growth forecast
| 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | Change 2026- 2030 | |
|---|---|---|---|---|---|---|---|
| UK | 3.0% | 2.5% | 2.5% | 3.0% | 3.5% | 3.5% | 15.9% |
| Greater London | 3.5% | 2.0% | 3.0% | 3.5% | 4.0% | 3.5% | 17.0% |
| Central London | 2.5% | 1.5% | 3.0% | 3.0% | 4.0% | 4.0% | 16.5% |
Source: JLL Research
JLL Research
JLL’s Residential and Living team consists of over 300 professionals who provide a comprehensive end-to-end service across all residential property types, including social housing, private residential, build to rent, co-living, later living, healthcare and student housing.
Disclaimer: © 2025 Jones Lang LaSalle IP, Inc. All rights reserved. Data within this report is based on material/sources that are deemed to be reliable and has not been independently verified by JLL. JLL makes no representations or warranties as to the accuracy, completeness or suitability of the whole or any part of the report which has been produced solely as a general guide and does not constitute advice. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of JLL. JLL, its officers, employees shall not be liable for any loss, liability, damage or expense arising directly or indirectly from any use or disclosure of or reliance on such report. JLL reserves the right to pursue criminal and civil action for any unauthorized use, distribution or breach of such intellectual property.
