But rents set to rise more quickly than previously anticipated
Real estate giant JLL is predicting UK house prices to remain “broadly flat” in 2026, a significant downgrade on its previous forecast for the year.
The business had previously expected 2026 to “usher in a new phase of the housing cycle”, with improved performance in more expensive markets expected on the back of two anticipated base rate cuts.
But after the outbreak of conflict in the Middle East, the JLL now thinks it is “unlikely that we will see the lower rates and improvements in market sentiment” necessary to support its previous view.
In its latest UK residential forecast, the firm predicted that prices would end the year down 0.5% compared with its previous forecast of 2% growth.
It said that more affordable markets should end the year “in positive territory”, but still below inflation, while prices are forecast to fall 2.5% in Greater London and 5.5% in central London. In the latter, it said “sentiment rather than rates” would have the greater impact.
Meanwhile, rents are now expected to rise 3.5% nationally, up from the 2.5% forecast in November, as fewer people move into owner-occupation and with inflation set to be higher than previously expected.
Higher rental growth is also forecast for London, with rents set to increase 3% in the year.
Over the longer term, JLL said pressure to comply with EPC C standards by 2030 would also fuel rental growth as properties are removed from the market for sale or improvement.
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