Reserve Bank of Australia Holds Cash Rate Steady at 4.35%

uae-residential-market-demonstrates-resilience-in-q1-2026

RBA holds cash rate at 4.35% as inflation eases to 3.8%. Cautious sentiment affects housing markets, but strong population growth and supply shortages support long-term fundamentals for strategic buyers.

RBA holds cash rate at 4.35% as inflation eases to 3.8%. Market caution persists, but strong population growth and supply shortages support long-term housing fundamentals for strategic buyers.

RBA Holds Cash Rate at 4.35% for Second Consecutive Month

The Reserve Bank of Australia maintained the cash rate at 4.35% on August 11th, continuing its 'wait-and-see' approach as inflation eases to 3.8% but remains above the target range. While the hold provides relief from rising borrowing costs, cautious sentiment persists in housing markets. However, strong population growth and housing supply shortages continue to support long-term fundamentals, presenting opportunities for buyers with a medium to long-term investment horizon.

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<article class="rba-june-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">As the dust settles on the 2026-27 state budget season, a powerful and unified theme has emerged across Australia: fixing housing is a critical priority. Faced with ongoing pressure on affordability and supply, state governments have delivered
            budgets featuring billions in funding aimed at building more homes faster and creating new pathways to home ownership. Two dominant strategies are being utilized&mdash;significantly boosting housing supply by cutting red tape and funding supporting
            infrastructure, and providing direct financial relief to help more people, especially first home buyers, enter the market. Nearly every state has allocated significant funding to unlock land, streamline planning approvals, and invest in enabling
            infrastructure like water, power, and transport, with the goal of reducing development bottlenecks and getting new homes built more quickly. However, success will depend on execution and coordination between government and industry, particularly
            as these initiatives intersect with recent federal tax reforms to Capital Gains Tax and negative gearing restrictions, creating a complex landscape where buyers, developers, and investors must navigate new state incentives, federal tax rules,
            and economic headwinds simultaneously.</p><div class="cta-section"><a href="https://res.cloudinary.com/jll-global-olm/image/upload/v1782717882/Residential%20AU/Residential_Insight_-_State_Budgets_2026-27.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full Report 📊</a>
 </div></div></article><style>.rba-june-content {
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Housing Front and Centre: Round-Up of 2026-27 State Budgets

Australia's 2026-27 state budgets prioritize housing with billions committed to boost supply through streamlined planning and infrastructure investment, while providing enhanced financial support for first home buyers amid complex federal tax reforms and economic headwinds.

Australia's 2026-27 state budgets commit billions to boost housing supply via streamlined planning and infrastructure, while supporting first home buyers amid federal tax reforms and economic pressures.

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<article class="rba-june-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">This decision signals a period of cautious stability for Australian housing markets.</p><p>Headline inflation has eased to 4.2% in April 2026, down from 4.6% in March, while trimmed mean inflation rose marginally to 3.4% from 3.3%. Both measures remain above the RBA's 2-3% target range. The RBA noted that disruption to global oil supply
            is directly adding to inflation and has been passing through to prices of other goods and services.</p><p>The rate hold brings relief to homeowners facing cost-of-living pressures and provides prospective buyers an opportunity to assess the market from a position of relative stability. First-home buyers can more accurately evaluate borrowing capacity
            and make purchasing decisions without several market factors shifting simultaneously.</p><p>Despite near-term headwinds from softening year-on-year sale price growth and auction clearance rates in some locations, JLL remains confident in the fundamental drivers supporting Australia's housing markets. Population growth and chronic supply
            shortages across major cities ensure that housing demand consistently outpaces supply, underpinning long-term value.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1782325953/resi/AU/Insights/Residential_Insight_-_RBA_June_Meeting.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full RBA June Meeting Analysis 📊</a>
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Reserve Bank of Australia Holds Cash Rate at 4.35%

The Reserve Bank of Australia held the cash rate at 4.35% on June 16th, 2026, marking a pause in the tightening cycle after three consecutive increases through the first half of 2026.

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<article class="federal-budget-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">These changes affect negative gearing provisions and capital gains tax treatment, while a new AUD 2.0 billion infrastructure investment aims to unlock up to 65,000 new homes.</p><p>From the budget date forward, the ability to offset rental property losses against other income will be removed for new investments in existing properties, with a grace period to July 2027. However, the critical carve-out for new-build dwellings
            allows investors purchasing newly constructed properties to continue accessing existing tax settings, including negative gearing and the 50% CGT discount option.</p><p>These reforms will drive substantial shifts in investor behavior. A significant proportion of new investor activity will likely target the new-build sector, particularly off-plan investment options. This pivot from existing stock to new-build
            properties may increase the supply of established dwellings entering the market, potentially reducing competitive pressure for first home buyers.</p><p>For developers, understanding and responding to the investor segment motivated by new-build tax advantages will be essential. The infrastructure funding unlocking constrained sites presents additional opportunities to bring supply to market where
            investor demand may be strongest.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1778787609/resi/AU/Insights/JLL_Residential_Insights_Federal_Budget_May_2026.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full 2026-27 Federal Budget Housing Analysis 📊</a>
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The 2026/27 Budget Creates New Pathways for Property Investors

The 2026-27 Federal Budget reforms negative gearing and CGT while exempting new-build properties. JLL examines how AUD 2.0 billion infrastructure funding redirects investor demand.

The 2026-27 Australian Federal Budget introduces significant reforms to housing taxation policy, fundamentally shifting how residential property investment will be treated. 

The 2026-27 Australian Federal Budget introduces significant reforms to housing taxation policy, fundamentally shifting how residential property investment will be treated.&nbsp;

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<article class="rba-rate-hike-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">The Reserve Bank of Australia has raised the cash rate to 4.35% on May 5th, marking the third consecutive hike in 2026 and reversing all cuts made in 2025. With inflation reaching 4.6% in March&mdash;well above the RBA's 2-3% target range&mdash;this
            monetary tightening cycle presents both challenges and opportunities for Australia's residential property market.</p><p>The current rate environment will moderate near-term sales market activity as borrowing costs rise and affordability deteriorates for homeowners and first-home buyers. Variable rate mortgage holders face immediate repayment increases, while those
            on fixed rates will confront higher costs at refinancing. Market participants now forecast the cash rate peaking at 4.7% in late 2026, signaling further hikes ahead and sustained pressure on purchasing power.</p><p>However, the fundamental drivers supporting Australia's housing market remain robust. Chronic supply shortages persist across major cities, while population growth continues pressuring existing housing stock. These structural imbalances ensure
            housing demand consistently outpaces supply, providing medium to long-term support regardless of near-term monetary policy fluctuations</p><p>The real opportunity lies in rental markets, which will absorb displaced demand as prospective buyers face extended timelines to homeownership. Reduced sales market affordability drives increased rental demand, with limited supply additions ensuring
            sustained rental growth through 2026 and beyond. This dynamic creates compelling opportunities for investors, as rental yields strengthen even as sales market activity moderates. Well-positioned investment-grade properties in supply-constrained
            locations remain positioned for continued performance, with the divergence between weakening sales conditions and strengthening rental fundamentals underscoring the defensive characteristics of quality residential assets during periods of
            monetary tightening.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1774533614/resi/AU/Insights/2026.05_RBA_Announcement_Blog.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full RBA Rate Hike Housing Market Analysis 📊</a>
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Reserve Bank of Australia Raises Cash Rate to 4.35%

The RBA raised the cash rate to 4.35% on May 5, 2026, the third consecutive hike this year. While sales markets face pressure from rising borrowing costs, rental markets strengthen as displaced buyers sustain demand. JLL analyzes the investment opportunities in Australia's residential sector amid monetary tightening.

RBA raises cash rate to 4.35% in May 2026. JLL examines how rising rates moderate sales markets while creating compelling rental investment opportunities amid sustained housing demand.

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<p><strong>The Monetary Policy Committee voted at eight votes to one to hold rates at 3.75 per cent on 30 April. This follows a similar hold stance from the Fed and the ECB this week. The Bank acknowledged that the energy price shock and continued geo-political uncertainty will mean energy prices and inflation will remain higher than they expected a few months back. But the decision to move rates essentially hinged on which of three scenarios the committee thought most likely over the next two years.</strong></p><p>In Scenario A inflation rises to 3.6 per cent by the end of 2026, wages rise a little but fall back to 3 per cent by late 2027 as labour market conditions weaken. As a result, second round effects &ndash; essentially higher inflation meaning workers ask
    employers for (and get) more significant wage increases &ndash; are reduced, as a weaker jobs market limits the need to increase wages. </p><p>In Scenario B inflation follows a similar path, second round effects are still modest, but wage growth is more persistent, hitting 3.5 per cent in Q1 2027, declining gradually over the year. In Scenario C inflation peaks at more than 6 per cent in Q1
    2027. This triggers more significant second round effect, with wages rising and inflation remaining elevated. Following the MPC meeting most members appeared to be leaning towards Scenario B.</p><p>But there was some positive news for borrowers as even pre-MPC several larger lenders reduced their fixed rate deals as swap rates (the benchmark lenders use to price fixed-rate mortgages) stabilised after a volatile few months. Barclays re-introducing
    a sub-4 per cent two-year fix for the first time since March (albeit only for their Premier customers) with HSBC and NatWest also announcing lower rates from 30 April.</p><iframe src="https://flo.uri.sh/story/3684258/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;" sandbox="allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation"></iframe><h2>&nbsp;</h2><h2>Renters&rsquo; Rights</h2><p>The first phase of the Renters&rsquo; Rights Act came into force on 1 May. Landlords who already have a written tenancy agreement in place do not need to change it or issue a new one. Instead, they will be required to provide tenants with a copy of the
    government &lsquo;Information Sheet&rsquo; on or before 31 May 2026 <a href="https://www.gov.uk/government/publications/the-renters-rights-act-information-sheet-2026#full-publication-update-history" target="_blank">Click here to access the Renters' Rights Act Information Sheet.</a> For new tenants landlords will need to provide a written tenancy agreement from 1 May.</p><p><strong>Changes introduced on 1 May include:</strong></p><p>Assured Periodic Tenancies introduced&ndash; Section 21 no fault evictions are now abolished, and most new and existing tenancies becoming Assured Periodic Tenancies. Tenants will be able to stay in their property for as long as they want, or until a
    landlord serves a valid section 8 notice. Tenants can end their tenancy by giving two months&rsquo; notice. Landlords retain access to specific grounds for possession when they have legitimate reasons to reclaim their property. These include persistent
    rent arrears, anti-social behaviour, or a genuine need to sell or move back in. Rent increases &ndash; limited to one a year, with landlords being required to follow a revised section 13 procedure. Notice of rent increases must be given at least two
    months before it is due to take effect. All rent increases can be challenged by tenants at the Property Tribunal. Rent in advance and bids &ndash; Properties must be advertised at a specific asking rent and offers above this amount cannot legally
    be accepted. Landlords or their agents can no longer request more than one month&rsquo;s rent in advance. Pet policies - Tenants have strengthened rights to request pets, which must be considered within 28 days. Landlords must provide a valid reason
    to refuse. Anti-discrimination policies &ndash; It is now illegal to discriminate against tenants with children or those receiving benefits. Landlords and letting agents cannot take any action to discourage or prevent these groups from renting, including
    hiding property information, refusing viewings, or denying tenancies based on having children or receiving benefits.</p><p>&nbsp;</p><iframe src="https://flo.uri.sh/visualisation/28989951/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;" sandbox="allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation"></iframe><p>&nbsp;</p><p>If you have any questions or would like to discuss the implications of the Renters&rsquo; Rights Act as a tenant or landlord, please <a href="https://residential.jll.ae/#contact-us">contact us.</a></p><h2><br />Prime Central London</h2><p>Prime Central London sales hit their lowest Q1 level since 2020 last quarter, with volumes down 24 per cent year-on-year as global uncertainty dampened buyer confidence. The JLL PCL index shows prices fell 2.2 per cent quarterly and 8.7 per cent annually,
    with properties under &pound;2 million hit hardest &ndash; down 9.8 per cent year-on-year as mortgage-reliant buyers feel the pinch of higher borrowing costs.</p><p>The rental market proved more resilient, with lettings up 13 per cent year-on-year as cautious buyers adopt a 'wait and see' approach. Increased stock levels &ndash; up 29 per cent &ndash; have kept rental growth flat, but the gap between asking and achieved
    rents for premium properties narrowed, suggesting competitive conditions at the top end.</p><p>Five sales over &pound;50 million this year alone (versus one in all of 2025) show the ultra-prime segment remains active. Higher stock levels across sales and lettings will likely moderate prices near-term, though strong letting activity suggests PCL's
    fundamental appeal endures. <a href="https://olmresi-sg-prod.jll.com/insights/research/jll-pcl-report-q1-2026">Click here</a> to read our latest Q1 PCL report.</p><iframe src="https://flo.uri.sh/visualisation/28990096/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;" sandbox="allow-same-origin allow-forms allow-scripts allow-downloads allow-popups allow-popups-to-escape-sandbox allow-top-navigation-by-user-activation"></iframe><p>&nbsp;</p><h2>Student housing leads with record Q1</h2><p>Student housing investment topped &pound;2.2bn in Q1 &ndash; the fifth-highest quarterly total on record and a rare bright spot in an otherwise subdued start to the year for UK Living. Close to a third came from Unite's acquisition of Empiric Student
    Property, which completed in January. Student accounted for 60 per cent of the &pound;3.7bn invested in UK Living in Q1 2026, significantly above the typical 35 per cent.</p><p>Build to Rent (BTR) had a quieter quarter, though the sale of Ebb &amp; Flow in Reading became the UK's largest ever operational asset transaction. Pension Insurance Corporation paid &pound;200m for the 598-bed scheme &ndash; surpassing Greystar's Barking
    Wharf purchase as the biggest single asset deal on record.</p><p>However, it was the only major multifamily transaction, pushing total BTR volumes to &pound;736m &ndash; the lowest Q1 figure since 2017. Multifamily investment fell to &pound;257m, though single family performed better at &pound;479m, boosted by Kennedy
    Wilson and Canada Pension Plan Investment Board's &pound;300m expansion. Click the link to read more in our latest <a href="https://www.jll.com/en-uk/insights/uk-living-roundup-series" target="_blank">UK Living Roundup April 2026.</a></p><p>JLL&rsquo;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. </p><p><sup>Disclaimer: &copy; 2026 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</sup></p>

The Residential Roundup - 1 May

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<p><strong>Welcome news of a two-week ceasefire in the Middle East has seen markets react favourably. Brent crude prices dropped to below $100 a barrel and shares in several UK and US property REITs have rallied. The outlook for the Bank Rate has also shifted, with markets now expecting a more cautious approach to rate hikes from the Bank of England this year. Forecasters, who had been predicting up to three 25bps increases in 2026 are pulling back and now expecting one. Swap rates at time of writing have also dropped, a positive sign for the fixed rate mortgage market. </strong></p>
<p><strong>But even if, as hoped, the ceasefire holds, much of the damage done to global supply chain and energy costs will take some time to unravel, with a similar impact on mortgage rates. All of which means any significant rebound in activity in the housing market may well take time to feed through. </strong></p>
<p><strong>Uncertainty hangs over the housing market</strong></p>
<p>A series of decidedly glum indicators have been released over the last week, highlighting the impact of geopolitical unrest on the UK housing market. First up Halifax, whose house price index suggested prices dipped 0.5 per cent in March compared with
    February, meaning prices were just 0.8 per cent higher than they were a year ago. </p>
<p>This was followed by the latest RICS survey, the first to fully cover the impact of Middle East conflict, which showed a drop in activity and appetite in the sales market. Needs based buyers were still looking to transact, and those with pre-March mortgage
    deals locked in were still active, but the discretionary market looked like it retreated again last month. </p>
<p>New buyer enquiries fell sharply, with the net balance declining to -39 per cent from -29 per cent in February&mdash;the weakest reading since August 2023. Agreed sales followed suit, dropping from -13 per cent to -34 per cent, also the lowest since summer
    2023. Near-term sales expectations turned markedly pessimistic at -33 per cent (from -4 per cent), whilst twelve-month outlook sentiment weakened to -1 per cent. New instructions registered a net balance of -6 per cent, indicating a marginally slower
    flow of listings. Unsold stock on agents' books rose to an average of 47 properties, up from 45 at the start of the year.</p>
<p>On pricing, near-term expectations dropped to -43 per cent from -19 per cent in the previous month indicating accelerating downward pressure anticipated over the next three months. The twelve-month outlook sits at +2 per cent, suggesting a broadly flat
    trend&mdash; but is down sharply from +43 per cent in January.</p>
<p>But while caution reigned in the sales market, tenant demand rose (+10 per cent net balance in March) alongside a continued drop in landlord instructions (remaining firmly negative at -25 per cent). Expectations for rental growth strengthened to +29 per
    cent, with agents citing persistent supply-demand imbalances and expectations that the uncertain outlook in the sales market could benefit the rental market.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776635385/resi/gb/Articles/Images/Roundup-Apr10-Chart1.jpg" /></p>
<p><strong>Construction activity remains muted</strong></p>
<p>Geopolitical uncertainty also weighed heavily on the latest construction PMIs. The UK construction sector's woes deepened in March 2026, with house building bearing the brunt of the downturn, compounded by a wet first quarter that made construction even
    more challenging. Residential activity recorded the sharpest decline across all construction categories, with the index falling to 38.2&mdash;well below both commercial construction (47.1) and civil engineering (44.8). Remember, a score below 50 signals
    a contraction in activity. This marks the fifteenth consecutive month that the sector has contracted, driven by falling client confidence and a dearth of new project starts.</p>
<p>What's particularly concerning for housebuilders is the acceleration and unpredictability of build costs. Input price inflation surged to its highest level since November 2022, with nearly half of all construction firms reporting rising cost burdens.
    The outbreak of war in the Middle East has disrupted supply chains, pushing up fuel, transportation and raw material costs. International shipping delays meant that supplier delivery times rose for the first time since last summer, adding further
    pressure to already squeezed margins.</p>
<p><strong>Falling short</strong></p>
<p>The latest estimated net additions figures highlight the need for further incentives to develop. Government figures suggest 191,300 homes were completed in England between 1 April 2025 and 15 March this year. This was 17,300 short of the previous 12-month
    total. Comparing estimates on net additions with housing needs targets shows the clear need for further intervention, with net additions (the most generous measure of housing delivery) 48 per cent shy of the 370,000 annual housing need across England.&nbsp;</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776635385/resi/gb/Articles/Images/Roundup-Apr10-Chart2.jpg" /></p>
<p><strong>Housing Bank to the rescue? </strong></p>
<p>With a 180,000-home supply shortfall, debt more expensive, and viability more challenged, the launch of the National Housing Bank could not have come at a more important time. The National Housing Bank (NHB) is part of a raft of Homes England and GLA
    initiatives to promote further activity in the housing market, effectively aiming to alleviate some of the debt-based challenges faced by those delivering homes. </p>
<p>The scheme was launched with much fanfare, with a &pound;100m JV with Aviva championed as an example of how the schemes could turbocharge activity. The NHB has &pound;16 billion of debt, equity and guarantees aiming to assist in the delivery of half a
    million new homes. The bank also needs buy-in from the private sector, with an investment prospectus published to attract more than &pound;50 billion of private capital. Announced in the 2025 Spending Review, the Bank is a wholly government-owned
    subsidiary of Homes England. Its mission is to drive housing delivery and create communities, with returns only covering the cost of government borrowing. The Bank will work alongside Homes England as an independent subsidiary to provide tailored
    support packages.</p>
<p>The NHB is open to different providers from large housebuilders to SMEs. Crucially it is not limited to those operators providing affordable or build-for-sale homes, with build-to-rent and later living also able to access funds. From 1 April 2026, the
    NHB offers seven debt products:</p>
<p><strong>1-SME accelerator loans</strong> - providing site-specific lending enabling smaller developers to establish track records and scale operations. Targeted at supporting firms currently delivering up to 250 homes a year but looking to grow their
    output. </p>
<p><strong>2-Revolving credit facilities</strong> - working with commercial lenders to provide multi-site facilities and land loans, again targeted at helping SME developers expand capacity.<strong></strong></p>
<p><strong>3-Senior and mezzanine loans &ndash;</strong> targeted at mid-size developers with project-level funding, particularly for build-to-rent, later living and brownfield regeneration. Funding will sit alongside private capital to bring forward stalled
    projects.
</p>
<p><strong>4-Corporate balance sheet lending</strong> - supports housebuilders directly and sits alongside commercial lending, a key focus is supporting those specialising in Modern Methods of Construction.</p>
<p><strong>5-Lending alliances - </strong>creating platforms leveraging private sector capital to broaden the Bank's reach and scale debt finance availability to SME housebuilders.</p>
<p><strong>6-Infrastructure loans</strong> - long-term funding up to 15 years to large housebuilders and master developers for upfront infrastructure needs ranging from roads to placemaking.</p>
<p><strong>7-Low interest loans for RPs - </strong>offers below-market interest rates to Registered Providers to unlock social and affordable housing investment, addressing pressures from increased debt costs and rising capital expenditure demands.</p>
<p>Partners are urged to reach out to their regional Homes England teams with specific sites or potential opportunities. With more information on the National Housing Bank available <a href="https://www.gov.uk/government/publications/homes-england-and-national-housing-bank-investment-prospectus-2026/homes-england-and-national-housing-bank-investment-prospectus-2026-html#fnref:1">here.</a><br /></p>
<p>JLL&rsquo;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. </p>
<p>Disclaimer: &copy; 2026 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</p>

Residential Roundup - 10 April

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<article class="sa-election-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">Following a successful re-election, Premier Peter Malinauskas's Labor Government has a clear mandate to execute its expanded housing strategy for South Australia. This comprehensive plan responds to the state's unprecedented economic growth and
            projected population of two million by 2031, serving as a direct invitation to the private sector to partner in building the state's future.</p><p>The government's coordinated framework tackles the housing crisis from multiple angles. On the supply front, a $1 billion Fast-Track Fund will inject capital to purchase strategic land and kick-start apartment projects, while a massive $1.5 billion
            infrastructure investment will build essential water and sewer networks. This is complemented by planning reforms designed to provide developers with greater certainty and reduce costly delays.</p><p>On the demand side, the plan stimulates key buyer groups to create a reliable customer base. A stamp duty abolition for downsizers provides a powerful incentive for older South Australians to move, unlocking larger family homes for the next generation.
            For new entrants, an expansion of HomeStart's low-deposit loans opens the door for thousands of first-home buyers, including essential workers. The innovative 2,000-home Rent-to-Own scheme creates a structured pathway to ownership, allowing
            participants to build savings while leasing at reduced rent with the purchase price locked in.</p><p>These policies create fertile ground for private investment by lowering barriers to entry and making the government an active partner in mitigating risk. For developers, projects once considered too large or financially marginal become immediately
            feasible, providing the green light for more ambitious master-planned communities and high-density urban renewal projects. The market is already responding, with apartment median sale prices showing 12.9% year-on-year growth and houses at
            10.0%.
        </p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1774533614/resi/AU/Insights/2026.03.25_SA_Election.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full SA Election Housing Investment Analysis 📊</a>
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South Australian election 2026: Unlocking housing investment

Premier Malinauskas's re-elected Labor Government has unveiled a $2.5 billion housing strategy combining infrastructure investment, planning reforms, and demand-side policies like stamp duty abolition for downsizers to unlock private investment as South Australia approaches two million residents by 2031.

Premier Malinauskas's Labor Government unveils a $2.5 billion housing strategy with infrastructure investment, planning reforms, and stamp duty abolition for downsizers as SA approaches two million residents by 2031.

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<p><strong>All nine members of the Monetary Policy Committee unanimously voted to hold rates at 3.75 per cent at the March meeting. This came as little surprise considering the many unknowns around the length and impact of the conflict in the Middle East. Just a few weeks back, following the February meeting the odds on a rate cut topped 80 per cent, with observers hinting at further downward movements in the coming months. Obviously much has changed since then.</strong></p>
<p>But with odds on a reduction in the Bank Rate falling from near certainty to less than 10 per cent in the run-up, market attention shifted to what committee members were saying rather than the decision itself. Some thought (or hoped) the committee would
    choose to &lsquo;look through&rsquo; energy cost driven inflation risk and concentrate on the ongoing weakness in the employment market. But the Bank&rsquo;s key focus &ndash; keeping inflation in check rather than focussing on growth &ndash; won
    out. </p>
<p>The Bank of England's decision to maintain its current interest rate stance reflects a broader pattern of monetary policy restraint among major central banks worldwide this week. The narrative emerging from all the Central Banks&rsquo; announcements was
    one of caution. The US Federal Reserve opted to keep rates within its existing 3.5 per cent to 3.75 per cent range, signalling continued caution in its approach to monetary adjustment. Canada held firm at 2.25 per cent, while both the Bank of Japan
    at 0.75 per cent and the European Central Bank at 2 per cent announced they too would be maintaining their respective rates for the time being.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634954/resi/gb/Articles/Images/Roundup-Mar20-Chart1.jpg" /></p>
<p><strong>Outlook for inflation</strong></p>
<p>Maintaining its key focus on inflation, the Bank emphasised that it will be monitoring developments "extremely closely" and stands ready to act to ensure inflation returns to the 2 per cent target level. With the Consumer Prices Index (CPI) having fallen
    to 3 per cent in January, MPC forecasts back in February had anticipated inflation dropping back towards 2 per cent from as early as April, largely thanks to falls in the energy price cap. However, on Thursday, the MPC acknowledged that recent increases
    in wholesale energy costs would delay inflation's return to target, as these rises were already translating into higher fuel prices at the forecourt. The Committee now expects inflation to sit at around 3 per cent in the second quarter of 2026, a
    notable increase from the 2.1 per cent in the February forecast. </p>
<p>Looking ahead, higher wholesale gas prices are likely to feed through into a higher Ofgem energy price cap from July, which the Bank anticipates could add 0.75 percentage points to inflation over the third quarter. When combined with the prospect of firms
    passing on elevated energy costs to consumers, the MPC warned that CPI inflation could climb to as much as 3.5 per cent in the third quarter, considerably higher than the previous 2 per cent forecast.</p>
<p><strong>Employment figures</strong></p>
<p>The latest government figures revealed continued weakness in employment markets. Growth in private sector wages, excluding bonuses, was 3.3 per cent in the three months to January, below the 3.5 per cent expected by the markets. The jobless rate remained
    at 5.2 per cent, marginally lower than the 5.3 per cent forecast previously.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634954/resi/gb/Articles/Images/Roundup-Mar20-Chart2.jpg" /></p>
<p><strong>Impact on mortgage rates</strong></p>
<p>With oil breaching $100 a barrel and the prospect of higher inflation for longer, swap rates (the benchmark rate for fixed rate mortgages) have risen. Markets are certainly pricing in the uncertainty &ndash; particularly in the short term, with two-year
    swaps now sitting higher than five-year. Products are being pulled, with the last of the sub 4 per cent deals now disappearing from lenders&rsquo; books. Moneyfacts data shows the average shelf-life of mortgage products fell from 33 days in early
    February to 14 in early March, the lowest for over two years.</p>
<p>Moneyfacts tracked the removal of 600 mortgage products over the past few weeks. Not great news for borrowers, but this does reflect only around 10 per cent of the overall market.&nbsp; The number of mortgage products available is still more than double
    those offered in the weeks following the 2022 mini-Budget. Average two-year fixed rates have risen from 4.84 per cent at the start of March to 5.32 per cent on the morning of the MPC meeting. </p>
<p><strong>What does this mean for the housing market? </strong></p>
<p>Uncertainty often leads to greater caution among buyers, particularly those who are less needs driven. In the short term, we expect those who have already locked in more favourable mortgage deals will be keen to push through transactions. But for those
    thinking of entering the market, heightened uncertainty alongside higher rates will likely deter some from moving. </p>
<p>Our 2026 forecast, made back in November, always predicted a stronger H2 than H1. It&rsquo;s still too early to call, and we are obviously all hoping for a swift resolution to the current conflict. But if the conflict persists, we could see a delay in
    the recovery this year. We&rsquo;re reviewing our outlook and will keep you posted once we have a clearer view.<br /></p>
<p>JLL&rsquo;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. </p>
<p>Disclaimer: &copy; 2026 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.</p>

Residential Roundup - 20 March

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<article class="rba-rate-rise-content" data-sf-ec-immutable=""><div class="article-body"><p>Following a series of cuts throughout 2025 that provided relief to borrowers and stimulated the residential property market, the RBA announced on March 17th that the cash rate will increase from 3.85% to 4.10%. This decision comes as headline
            inflation rose to 3.8% in January 2026, with recent Middle East conflict driving substantial fuel price increases that may further contribute to inflationary pressures.</p><p>Homeowners with variable rate mortgages can expect increased repayments, while first-home buyers face further deterioration in affordability as home-buying budgets are reduced. However, investors may benefit as rental demand strengthens when sales
            market affordability declines, with CPI rents often trending in parallel with the cash rate.</p><p>Despite this rate increase, Australia's market fundamentals remain unchanged. Population growth, demographic changes, and chronic supply shortages continue to maintain pressure on prices in both sales and rental markets across Australian cities.
            The underlying strength in population growth and economic activity will continue to drive fundamental demand for housing, suggesting any softening in market activity may be temporary.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1773927466/resi/AU/Insights/2026.03.18_RBA_Announcement_Blog_v2.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download the full RBA Rate Rise Market Analysis 📊</a>
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Reserve Bank of Australia Raises Cash Rate to 4.10%

Blog Post 4

The Reserve Bank of Australia has raised the cash rate by 25 basis points to 4.10%, marking the second increase in just over a month as inflation pressures resurface.

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<p><strong>With the government committing to one &ldquo;fiscal event&rdquo; a year, the Spring Forecast was, as expected, policy light but forecast heavy. There was some (rare) positive news for the Chancellor, with cash receipts coming in stronger than the Budget watchdog expected, rising to the tune of &pound;22bn. An increase in receipts from self-assessment tax returns (including the impact of fiscal drag pulling more taxpayers into higher bands) alongside VAT and CGT increases are helping fill the coffers. This will be welcome news for the government, particularly following the loss of the Gorton and Denton by-election, with both the Greens and Reform making significant gains.&nbsp;</strong></p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634617/resi/gb/Articles/Images/Roundup-Mar6-Chart1.jpg" /></p>
<p>The outlook for UK GDP remains subdued, with the Office for Budget Responsibility downgrading their view on 2026 growth from a 1.4 per cent forecast in November to 1.1, although the outlook for 2027 and 2028 improved marginally from 1.6 per cent growth
    to 1.7. This downgrade was due, in part, to a drop in net migration, with the OBR now expecting net migration to average 235,000 a year between 2026 and 2030, 60,000 a year lower than the 295,000 it was predicting in November.</p>
<p>Unemployment is now expected to peak at 5.3 per cent this year, up from a November forecast of 4.9 per cent. Youth unemployment remains particularly challenging, with 16 per cent of 16- to 24-year-olds out of work in Q4 2025, nearing an 11-year high.
</p>
<p>Inflation is expected to fall back from 3.5 per cent in 2025 to 2.3 per cent in 2026 &ndash; down from November&rsquo;s forecast of 2.5 per cent. But as the conflict in Iran continues to escalate, the Office for Budget Responsibility&rsquo;s forecasts
    looked out of date even before they were published, with continued military action in the Middle East sending shockwaves through the markets. Airline stocks dropped by more than 10 per cent while fears over oil supply saw the share prices of BP and
    Shell spike. Oil has hit $85 a barrel but crucially remained below the $128 threshold reached following Russia&rsquo;s invasion of Ukraine in 2022. Similarly, the price of liquefied natural gas, of which around 20 per cent of global supply comes out
    of Qatar, almost doubled compared with pre-conflict levels as QatarEnergy confirmed a suspension in production following an attack on its primary operational hubs.&nbsp;</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634617/resi/gb/Articles/Images/Roundup-Mar6-Chart2.jpg" /></p>
<p>There are many reasons aside from the fiscal to hope for a quick resolution, but fears over the impact of a drawn-out conflict on inflation remain. Expectations that we may see a further rate cut at the next MPC meeting on 19th March have all but evaporated
    - the odds on a rate cut in March slashed from north of 70 per cent last week to around 20 per cent at time of writing. </p>
<p>&nbsp;</p>
<p><strong>Housing market</strong></p>
<p>There was little in the Spring Forecast for housing, with those pinning their hopes on an outside chance that much needed buy side incentives would be announced again disappointed. Although rumours abound that the government is continuing to consult on
    how best to support first-time buyers. The OBR still expect the government&rsquo;s housebuilding aspirations are unachievable, forecasting 1.3 million homes UK wide by 2029/30, 200,000 short of the government&rsquo;s England only target. That said,
    the Spring statement adds 30,000 to the previous figures published in November. Here at JLL we&rsquo;re a little more pessimistic, with expectations of closer to 1 million homes over the forecast period. </p>
<p>House prices were expected to rise by an average of 2.5 per cent per annum over the next five years, with only a marginal 0.2 percentage point increase and another 0.1 percentage point rise expected in 2027 and 2028 over the November outlook. This is
    more pessimistic than the JLL view, with our UK forecast expecting just shy of 20 per cent increase in prices by the end of 2029 against 16.4 per cent forecast over the next five years by the OBR. </p>
<p><strong>In other news</strong></p>
<p>Houses prices edged up in February, with the Nationwide Index showing prices rising 0.3 per cent month-on-month. But with inflation at circa. 3 per cent, prices on an inflation adjusted basis fell, meaning further improvement in affordability. For rents,
    Homelet&rsquo;s reported average UK rental values rose 2 per cent in the year to February. The North East was the only English region to record above inflation increases in rents at 4.6 per cent, with rents rising in real terms in Scotland (+4.6 per
    cent) and Wales (3.1 per cent).</p>
<p>Yet despite notional increases in spending power in most markets, prospective buyers remained cautious in January. Mortgage approvals dropped below 60,000, their lowest for two years. Of course, January is never the busiest month for the mortgage markets,
    but the promise of better rates ahead, as well as continued economic uncertainty around growth and job security could well be impacting here. We&rsquo;ll need a few more months of data to tell. </p>
<p><strong>In case you missed it</strong></p>
<p>Our latest JLL Big Six Residential Development Report shows the average price of new build apartments across the six cities rose 2.4% in 2025, while rental growth slowed to 1.7%. In the build-to-rent market, total investment volumes exceeded &pound;1bn
    in 2025, 21% higher than 2024. North of the border the passing of the Scottish Housing Bill, and the exemption of BTR from future rent caps is expected to boost activity and put Scotland firmly back on investors&rsquo; radars. To download a copy of
    the report <a href="https://residential.jll.co.uk/insights/article/big-six-residential-development-report-2026">click here</a>. <br /></p>
<p>JLL&rsquo;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. </p>
<p>Disclaimer: &copy; 2026 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.</p>

Residential Roundup - 6 March

Blog Post 5

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<article class="melbourne-residential-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">Melbourne's residential market is accelerating out of the pit lane with championship-winning momentum building across the city.</p><p>After years of underperformance due to heavy taxation and revised tenancy laws, Melbourne is making a strategic comeback. New investor loan commitments have surged 38% year-on-year, apartment prices are climbing 2.1% annually, and market fundamentals
            are reasserting themselves with renewed buyer confidence.</p><p>Leading forecasters predict Melbourne will see over 5% dwelling price growth year-on-year across 2026 and 2027 &ndash; the first sustained positive momentum in roughly three years. One-bedroom apartments are claiming pole position with yields
            sitting at 6.3%, offering immediate income returns while positioning for capital growth.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1772725790/resi/AU/Insights/Residential_Insight_Blog_-_Melbourne_F1.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download your complimentary Melbourne Market Insights Report 🏁</a>
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It’s Lights Out and Away We Go: How Melbourne is Making a Comeback to Pole Position

Melbourne property market comeback: 38% surge in investor loans, 2.1% apartment price growth, and forecasts of 5%+ dwelling price growth for 2026-2027. Discover why Melbourne is racing back to pole position.

https://res.cloudinary.com/global-cms-assets-np/image/upload/v1772782733/resi/AU/Insights/GettyImages-1162484390.png

<p>The government unveiled the draft Commonhold and Leasehold Reform Bill at the end of January. This follows the adoption of the Renters' Rights Act, which ends “no-fault” evictions, and the ban on upwards-only rent reviews in commercial leases. This proposed
    legislation represents a significant overhaul of residential property ownership structures, with the potential to impact over five million existing leaseholders.</p>
<p>The centrepiece of these reforms is a cap on ground rents at £250 annually from late 2028, dropping to a nominal peppercorn rate after 40 years. For many leaseholders currently facing escalating ground rents – particularly those trapped by doubling clauses
    – this provides substantial savings throughout their lease term as well as certainty over costs. The changes will be particularly welcomed by homeowners whose properties became difficult to mortgage or sell due to onerous ground rent terms.</p>
<p>The legislation also looks to abolish the controversial and widely criticised forfeiture system. Under current rules, leaseholders can lose their homes and equity over debts as low as £350. The new enforcement regime introduces a structured court process.
    Where properties must be sold, leaseholders will receive any balance after landlords' claims and mortgage debts are settled.</p>
<p>However, this retrospective capping of existing contractual arrangements is a significant departure from traditional legal principles and is likely to face legal challenges from investors who have acquired ground rent income streams in the past.</p>
<h2>The End of New Leases</h2>
<p>Building on the 2022 ban on new leasehold houses and ground rent ban on new flat leases, the Bill prohibits new leasehold flats entirely. Instead, newly built residential developments will use commonhold structures, where homeowners collectively own both
    their individual properties and a proportional share in the building itself. This offers greater control to those ultimately bearing the costs.</p>
<p>However, commonhold isn't without challenges, and despite being introduced in 2002 has seen low levels of take-up. Owners will still need to grapple with collective decision-making and shared responsibilities – issues familiar to anyone involved in right-to-manage
    companies or share of freehold arrangements. Owners of commonhold properties will also be legally responsible for building safety requirements, with failure to adhere to rules opening owners up to legal action, fines or even imprisonment. If commonhold
    owners don’t want to collectively manage their buildings, they may choose to engage a managing agent. However, management companies, used to dealing with single freeholders, may also find it more challenging and more costly to engage with multiple
    commonhold owners or committees, most of whom are unlikely to have previous property management experience. This lack of track record may also prove challenging for lenders, with newly established commonhold structures unable to demonstrate the managerial
    and financial track record larger management companies or freehold owners can offer. All of which means the success of commonhold will depend heavily on whether the updated framework addresses these practical complexities effectively.</p>
<p>For developers this also represents a fundamental shift away from the traditional model of retaining or selling on freehold ownership. However, the ban includes exemptions for ‘permitted leases’ which looks to include build-to-rent schemes, purpose-built
    student accommodation and social housing.</p>
<h2>Conversion of Existing Leaseholds</h2>
<p>Existing leaseholders aren't left behind. The reforms attempt to simplify conversion to commonhold, replacing the current unanimous consent requirement with a 50% threshold. Buildings will be able to maintain mixed ownership during transition periods,
    with mechanisms ensuring effective management whilst preserving rights for homeowners.</p>
<h2>Implications </h2>
<p>These changes will impact both leaseholders and those who invest, lend and develop in the sector. Freehold investors, including several pension funds, face reduced income streams, while developers lose a traditional revenue source from freehold sales,
    potentially affecting development viability.</p>
<p>For homebuyers, commonhold developments may become increasingly attractive due to enhanced transparency and owner control. But the ability to convert should prevent market segmentation between leasehold and commonhold properties.</p>
<p>For lenders, the transition period may also cause legal and valuation headaches. The removal of “marriage value” in lease extensions will significantly reduce the cost of extending a lease but also distorts long established and legally ratified approaches
    to valuation used to assess the differential in the value of short lease properties. This could lead to uncertainty around true value and cause issues for those looking to lend or secure finance on short lease properties.</p>
<h2>Timeline</h2>
<p>Currently in draft form, the legislation faces parliamentary scrutiny and likely legal challenges. The ground rent cap won't take effect until late 2028, providing time for market adjustment and legal resolution.</p>
<p>The transition presents challenges, particularly for existing investors, but the legislation promises greater security and control for millions of homeowners. Ultimately success will be measured by the extent to which these complex reforms deliver the
    improved homeownership experience the government promises, both for current leaseholders and future residents.</p>
<h2>JLL Research</h2>
<p>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.</p>
<p><sup>Disclaimer: © 2026 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.</sup></p>

Implications of Leasehold Reform

Demystifying Stamp Duty and Other Taxes When Buying Property in London

The government unveiled the draft Commonhold and Leasehold Reform Bill at the end of January. This follows the adoption of the Renters' Rights Act, which ends &ldquo;no-fault&rdquo; evictions, and the ban on upwards-only rent reviews in commercial leases. This proposed legislation represents a significant overhaul of residential property ownership structures, with the potential to impact over five million existing leaseholders.

https://res.cloudinary.com/jll-global-olm-np/image/upload/v1772693064/resi/gb/cms/News/Images/26-insights-implications-of-leasehold-reform.jpg

<p><strong>It&rsquo;s been quite a week (again) in Westminster, with further revelations about the former U.S. Ambassador looking at points as if they could topple Starmer. Yields on ten-year government debt rose to just shy of 4.6 per cent in response but have since settled, with the pound weakening against both the dollar and euro</strong><strong>, too. </strong></p>
<p><strong>But despite calls from Scottish Labour leader Anas Sarwar for the PM to stand down, the cabinet came out broadly in support. For Sarwar, the upcoming Holyrood election will be at the forefront of his mind, but for Starmer, too, the 7 May local elections remain a thorn in Labour&rsquo;s side, with the potential for &lsquo;protest&rsquo; voting to further destabilise Starmer and Labour&rsquo;s front benches. </strong></p>
<p><strong>UK economy</strong></p>
<p>Like front line politics, unpicking what&rsquo;s happening to the UK economy remains challenging. Following a surprise 0.3 per cent uptick in GDP in the three months to November, the December (Q4) figures came in at a somewhat underwhelming 0.1 per cent,
    the same as recorded in Q3. This took full-year 2025 growth to 1.3 per cent, notably above the figure most forecasters predicted earlier in the year. </p>
<p>The announcement of these results resulted in some significant political cherry-picking, with Labour citing the UK as the best-performing European G7 nation (effectively we did better than France, Germany and Italy). The Conservatives took a different
    stance, with the flatlining of GDP in the second half of the year blamed squarely at Rachel Reeves&rsquo; decision making. </p>
<p>Looking ahead, the OBR expects growth of 0.9 per cent in 2026, whereas consensus forecasts are a little higher at 1.0 per cent.&nbsp;</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634352/resi/gb/Articles/Images/Roundup-Feb13-Chart2.jpg" /></p>
<p><strong>Caution around the labour market</strong></p>
<p>The labour market has continued its gradual cooling from the post-pandemic tightness that characterised recent years. The unemployment rate remained at 5.1 per cent in the three months to November&mdash;October, the highest level since 2016 when excluding
    the pandemic disruption. But there are now 3.7 million more people in employment than when unemployment last reached this level. Job vacancies remained stable in November at 2.3 per 100 employee jobs for the fourth consecutive month, sitting modestly
    below the pre-pandemic average of 2.6.</p>
<p>The inflation picture presents a much brighter outlook than we've seen over the past two years, despite some uneven progress. Core inflationary pressures, particularly in goods, continue to subside, and slower wage growth is expected to gradually filter
    through to services inflation.</p>
<p>Most forecasters anticipate inflation will continue its downward trajectory throughout 2026, drawing closer to the Bank of England's 2 per cent target. Financial markets expect this will permit further gradual monetary easing as we move through 2026.
    The Bank of England maintained its policy rate at 3.75 per cent at its most recent meeting but signalled the possibility of additional cuts. Markets and economists are forecasting up to two further 25 basis point reductions in the year ahead.</p>
<p><strong>UK investment</strong></p>
<p>JLL data on UK real estate investment volumes (all sectors), shows volumes increased 64 per cent quarter on quarter to &pound;16.4bn in Q4, from &pound;10.0bn in Q3.&nbsp; This represented a 28 per cent increase on 2024 where volumes reached &pound;12.8bn
    in Q4. Growth also remained higher than the long-run average, at 10 per cent above the 10-year Q4 average. </p>
<p>A strong Q4 means total 2025 volumes rose to &pound;49.0bn, 27 per cent above 2024 volumes of &pound;38.7bn and 2 per cent above the 10-year average.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634352/resi/gb/Articles/Images/Roundup-Feb13-Chart1.jpg" /></p>
<p><strong>Affordability at a decade high</strong></p>
<p>UK wage growth dropped to its lowest level since 2022 in the three months to November, rising 4.5 per cent year-on-year. Yet despite the recent drop in the rate of wage inflation, increases in earnings have been outpacing house prices for some time now.
    This has resulted in house price to earnings ratio dropping from a high of 6.9 times earnings in Q2 2022 to 5.6 times in Q4 2025. This means house prices, when measured as a multiple of earnings are at their most affordable for over a decade. </p>
<p>London has followed a similar trajectory. Back in 2016 average London house price hit 11.7 times earnings but almost a decade on the ratio had fallen to 8.8. The last time London had a similar ratio was back in Q4 2013. </p>
<p>The challenge more recently has been around mortgage costs, with higher rates effectively wiping out affordability advantages. But rates are improving, best-buys are under 3.6 per cent and the effective interest rate on new mortgages edged down to 4.15
    per cent in December from 4.20 per cent in the previous month.</p>
<p><strong>Housing market</strong></p>
<p>Responses to the January RICS survey point to some green shoots in the residential market this year. The 12-month view on house prices rose for the fifth consecutive month, with a net balance of +43 per cent of respondents expecting prices to be higher
    at the same point in 2027. The outlook for rental growth remains positive too, with a net balance of +28 per cent expecting near-term rental increases.</p>
<p><strong>JLL Research</strong></p>
<p>JLL&rsquo;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. </p>
<p>Disclaimer: &copy; 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.</p>

Residential Roundup - 13 February

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<article class="prime-residential-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">The Reserve Bank of Australia has raised the cash rate to 3.85% for the first time in over two years, marking a significant shift in monetary policy.</p><p>This rate rise responds to inflation reaching 3.6% and will directly impact mortgage holders through higher borrowing costs. While first-home buyers may face affordability challenges, strong population growth and chronic supply shortages continue
            to support fundamental housing demand. The rental market is expected to remain resilient with continued growth potential as economic fundamentals stay robust.</p><ul><li>First rate rise since 2024 as inflation exceeds target range</li><li>Direct impact on borrowing costs and housing affordability</li><li>Rental market expected to remain resilient with continued demand</li><li>Economic fundamentals support long-term growth trajectory</li></ul><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1770796743/resi/AU/Insights/2026.02.04_Blog_-_RBA_Announcement.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download Full RBA Analysis Report 📊
            </a>
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Reserve Bank of Australia Raises Cash Rate to 3.85%

RBA raises cash rate to 3.85% - first increase in two years as inflation hits 3.6%. Expert analysis on impacts for mortgage costs, housing affordability, and rental markets. Download JLL's full residential insights report.

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<p><strong>Government announcements have been coming in thick and fast this week. They&rsquo;ve confirmed the detail behind much-anticipated changes to leasehold ownership, provided clarity on decent homes, minimum energy efficiency standards, warm homes, affordable housing rent convergence and low-cost loans for housing associations. Here at JLL we&rsquo;ve been busy releasing reports of our own too, with our latest Prime Central London and Living Roundup out now. So, buckle up, take a deep breath, and we&rsquo;ll run through what we&rsquo;ve learnt in the last fortnight. </strong><strong></strong></p>
<p><strong>Leasehold reform</strong></p>
<p>The government has finally published the Draft Commonhold and Leasehold Reform Bill. Reactions differ depending on which side of the leasehold fence one sits. Owners of freeholds bought as investments (which include individuals and larger institutions)
    will be assessing the implications for income. Developers too will be keen for more clarity on the impact of commonhold structures for future development, something which we&rsquo;ll be looking into more in the coming weeks. But for individuals owning
    leasehold properties or those looking to buy the reaction remains positive. The proposed capping of annual ground rents at &pound;250 from 2028 (dropping to a peppercorn rent after 40 years) will mean existing homeowners who own properties with more
    complex ground rent structures (doubling ground rents being one of the most challenging) finding it easier to secure a mortgage or sell their homes. It also reassures prospective owners that costs will not escalate going forward, supporting increased
    activity in the market. With challenges around escalating service charges, the greater transparency a commonhold structure brings may mean common holders have more control (or at least better oversight) of fees charged too.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634116/resi/gb/Articles/Images/Roundup-Jan30-Chart1.jpg" /></p>
<p><strong>Housing delivery &ndash; a mixed picture</strong></p>
<p>The government&rsquo;s commitment to 1.5 million homes appears unwavering, however 18 months from coming to power the delivery of new homes has reached near record lows. The government will welcome some positive headlines, with an 18 per cent annual increase
    in housing starts in the year to September 2025. But this isn&rsquo;t the full picture. Changes to building regulations meant starts spiked and then dropped back in Q2 2023, meaning the hike in starts comes off an abnormally low base.</p>
<p>In London Molior&rsquo;s latest release was mixed too. The number of starts totalled just over 5,500 in 2025 - it was 34,000 a decade earlier - meaning Molior&rsquo;s London starts in 2025 were just 6 per cent of London&rsquo;s 88,000 housing needs target.
    But there was a glimmer of hope, with Q4 starts rising, accounting for 41 per cent of the albeit low 2025 total.</p>
<p><strong>Affordable housing clarity</strong></p>
<p>The government has set out the detail behind rent convergence for social housing. The announcements are designed to address the difference in rents charged for some social homes and formula rents for comparable properties. This means more fairness for
    tenants who won&rsquo;t pay vastly different rates for similar homes just because they&rsquo;ve lived in a property for longer or have a different social landlord. From April 2027 affordable housing providers will be able to increase rents by &pound;1
    per week over and above CPI plus 1 per cent rising to &pound;2 per week above CPI+1 from April 2028. Rent convergence can run for up to ten years, or until they reach parity. London has the widest gap and is expected to take the longest with some
    regional markets needing only a year or so to regain lost ground. The announcements on rent convergence are seen as key in underpinning providers&rsquo; balance sheets and ensuring they have the confidence and financial ability to deliver more homes.</p>
<p>Details were also shared on the &pound;2.5bn of low-cost loans for housing associations announced at the spending review. The 25-year loans will have an interest rate of 0.1 per cent. &pound;250m will be set aside to support section 106, with the remaining
    90 per cent supporting the delivery of social housing through grant-funding.&nbsp;</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634116/resi/gb/Articles/Images/Roundup-Jan30-Chart2.jpg" /></p>
<p><strong>Living update</strong></p>
<p>A record &pound;22.8bn was invested in UK Living in 2025, with healthcare contributing more than half of the total as it ended the year with several &pound;1bn+ M&amp;A deals. Excluding healthcare, investment grew a more modest 2 per cent to &pound;10.1bn,
    rising for the second year running from the trough in 2023 (&pound;8.9bn). Single family investment overtook multifamily in 2025 with &pound;2.6bn invested, accounting for just over half of all build-to-rent investment last year. </p>
<p>The 2024/25 student data released by HESA this week gives us a glimpse at the first full year impact of restrictions on international students brought in at the start of 2024. The number of international students has fallen 10 per cent from its 2022/23
    peak, totalling 686,000 in 2024/25. Though still above the UK's (now scrapped) 600,000 target, it does represent a significant fall at a time that universities remain reliant on international tuition fees. The slowdown among international students
    resulted in a marginal 1 per cent decline in total university students. Despite a degree of uncertainty, investors were still active in the student market, with &pound;4.6bn of investment completing across the year, up 22 per cent annually. For more
    analysis on the UK living sector read Karl Tomusk&rsquo;s latest Living Roundup <a href="https://www.jll.com/en-uk/insights/uk-living-roundup-series">here.</a></p>
<p><strong>Prime Central London</strong></p>
<p>Pre-budget anxiety means drawing firm conclusions from Q4 data isn&rsquo;t advisable, but there were some glimmers of hope for a sunnier year ahead. Prices across PCL were down 7.3 per cent year-on-year in Q4, following a 1.6 per cent quarterly decline.
    But with more clarity post-Budget activity began to pick up with transactions above &pound;10 million rising by 36 per cent over the quarter, with buyers who&rsquo;d agreed prices pre-Budget gaining the confidence to exchange. Activity below &pound;2million
    was driven largely by domestic buyers, with transactions at this price point rising 7 per cent over the quarter. Activity in the &pound;2&ndash;5 million and &pound;5&ndash;10 million ranges was more subdued, likely reflecting lingering uncertainty
    earlier in the quarter around proposed tax changes. To read Meg Eglington&rsquo;s take on the Q4 PCL market <a href="https://residential.jll.co.uk/insights/research/jll-pcl-report-q4-2025">click here.</a><br /></p>
<p><strong>JLL Research</strong></p>
<p>JLL&rsquo;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. </p>
<p>Disclaimer: &copy; 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.</p>

Residential Roundup - 30 January

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<p>Hopes of a more settled geopolitical landscape in 2026 have been quickly dashed, with Trump&rsquo;s intervention in Venezuela, little progress on a peaceful resolution in Ukraine, the return of transatlantic friction over Greenland and distressing scenes
    in Iran leaving questions over the prospect of further US intervention.</p>
<p>But there are signs that economically 2026 could prove more settled. The Budget is behind us and the promise of one fiscal event a year &ndash; and hopefully lessons learnt from the pre-Budget paralysis last year &ndash; mean we could see more activity
    this year. The Bank of England has hinted they expect inflation will drop back to levels at or close to their 2 per cent target by the end of 2026, with two or more rate cuts this year looking more likely.<strong> </strong></p>
<p>There was some promising news on GDP in November, recovering from an October contraction of 0.1 per cent to grow 0.3 per cent in November, a five-month high. It isn&rsquo;t always prudent to read too much into monthly GDP numbers, but the increase in
    November does point to modest growth rather than a contraction once the Q4 figures surface. The reopening of the Jaguar Land Rover production line supported the November figure (and fed into the negativity in October), with car manufacturing rising
    26 per cent month-on-month. </p>
<p>For the housing market 2026 also brings some much-needed clarity on acronyms, with the NPPF, SAHP, RRA and rent settlement now published or expected to be released in Q1. We&rsquo;re forecasting a slow recovery rather than a step change in prices and
    activity this year. Our latest forecasts, published in early December, point to marginal growth of 2 per cent in prices and 2.5 per cent in rents this year. If you missed them, you can read more on our latest forecasts<strong> </strong><a href="https://residential.jll.co.uk/insights/news/residential-forecasts-2025">here.</a><strong></strong></p>
<p><strong>Market activity</strong></p>
<p>UK property transactions reached 100,350 in November, up 7.7 per cent annually and 1.3 per cent month-on-month, according to HMRC data. This sits just 1 per cent below the long-term pre-pandemic average (2013-2019). Rightmove&rsquo;s full year figures
    show sales agreed in 2025 were 3 per cent higher than 2024. But with transactions taking more than six months to progress from listing to exchange the slowdown in activity observed later in 2025 will take months to show up in the figures, meaning
    we&rsquo;re in for a few months of underwhelming figures, even if the market is feeling a little rosier.</p>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1768581921/resi/gb/Articles/Images/Roundup-Jan16-Chart2.jpg" /><br /></p>
<p>The RICS survey provides a timelier picture of market sentiment. It has been decidedly gloomy of late, with uncertainty pre-Budget weighing heavily on respondents&rsquo; market outlook. But their December survey, the first post-Budget, looks more promising.
    December isn&rsquo;t the best month to take the temperature of the housing market, with little change in new instructions reported by RICS and the near-term outlook for prices remaining broadly flat, but a higher number of respondents are now expecting
    prices to rise in 2026. A net balance of +35 per cent of respondents expect an increase, up from +16 in October and +24 in November. Sales expectations rose too, with a net balance of 34 per cent of respondent expecting activity to increase in 2026,
    the highest reading since December 2024. Rents are expected to rise in 2026 too, with respondents to the survey forecasting growth of 3 per cent nationally in 2026. <br /></p>
<p><strong>Prices</strong></p>
<p>Budget jitters acted as a dampener on house prices in the final months of 2025. Both Halifax and Nationwide reported UK house prices declining month-on-month in December, with Halifax showing a 0.6 per cent decrease and Nationwide recording a 0.4 per
    cent drop. Despite these monthly declines, annual price growth remained marginally positive at 0.3 per cent (Halifax) and 0.6 per cent (Nationwide) for the year ending December 2025. At a country and regional level prices in Q4 2025 rose in all areas
    bar East Anglia, where prices fell 0.8 per cent annually. Growth in the price of houses continues to outpace flats, with semi-detached houses recording 2.4 per cent growth annually, UK wide, compared with a 0.9 per cent fall for flats.<strong></strong></p>
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<p><strong>Rents</strong></p>
<p>The rental market followed typical seasonal patterns, with the final months traditionally bringing higher stock levels and modest rental adjustments. December 2025 saw average rents for new lets fall 1.5 per cent month-on-month, resulting in annual growth
    of 2.6 per cent for the year according to Homelet. The North East was the strongest English region at 6.6 per cent, Scotland recorded a solid 4.0 per cent annual increase, with Wales achieving 2.9 per cent growth over the same period.</p>
<p><strong>Mortgage market</strong></p>
<p>UK mortgage approvals dipped in November, with 0.7 per cent fewer approvals month-on-month and 6.7 per cent fewer annually. But considering this coincided with the run up to the Budget, falls were more marginal than some predicted and the 12-month rolling
    rate remains resilient.</p>
<p>This points to increased activity this year, supported by an increase in more competitive mortgage rates reaching the market. The effective interest rate on newly drawn mortgages averaged 4.20 per cent in November, down from 4.53 per cent in February,
    with best-buy fixed rates falling to 3.5 per cent in mid-January.<br /></p>
<p><strong>JLL Research</strong></p>
<p>JLL&rsquo;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. </p>
<h5>Disclaimer: &copy; 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.</h5>

Residential Roundup - 16 January

Discover the latest insights from Marcus Dixon in the first Residential Roundup of 2026 

<strong>Discover the latest insights from Marcus Dixon in the first Residential Roundup of 2026&nbsp;</strong>

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Renters' Rights Act

The Renters&rsquo; Rights Bill (RRB) proposes significant reform within the private rental sector. The bill itself has been making fast progress through Parliament, having already passed through the House of Commons. It is now widely expected to come into effect from this<em> </em>spring onwards.&nbsp;

The Renters’ Rights Bill (RRB) proposes significant reform within the private rental sector. The bill itself has been making fast progress through Parliament, having already passed through the House of Commons. 

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<p>With the October Budget behind us, the outlook for both prices and rents remains positive. The government is forging ahead with its plan to deliver more homes, but it will take some time before we see any real impact on overall supply. Increased government
    borrowing means the latest inflation forecasts from the Office for Budget Responsibility have come in higher than expected, which could throw some cold water on more bullish forecasts for mortgage rates.&nbsp; But the direction of travel appears to
    be the same, even if it may take a little longer to get there. </p><p>Lack of supply and more competitive mortgage rates are expected to underpin growth in prices over the next five years. Rental growth is expected to exceed inflation and wages over the five-year forecast period, but an increase in activity in the sales
    market means rental growth is expected to lag price growth, with rents forecast to be 17% higher by the end of 2029. </p><h2><strong>2024 outlook</strong></h2><p>Back in May we forecast house prices nationally would rise by 2% in 2024. This was underpinned by a continued resilience and lack of distress in the sales market, with prices holding firm despite the challenge of higher rates and uncertainties in the
    run up to the election (which at that point we were thinking would take place in the autumn). An early election was seen as a positive for the market, but Budget jitters meant much of that hoped for momentum was lost (or at least delayed).</p><p>Looking at the latest government figures (year to August 2024) shows prices have risen 2.8% annually, with more recent Nationwide figures for the year to October at 2.4%. There are obviously a few months to go but we expect year end growth to come in
    marginally above our 2% forecast. Scotland and the north of England are expected to see higher growth. Higher mortgage rates remained most challenging for more expensive markets in London and southern England, with growth in these regions, as forecast,
    lower than other areas of the UK this year.</p><p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1730756189/resi/gb/Articles/Images/Resi-Forecast-Chart-1.jpg" /></p><p>We forecast UK rents would end 2024 4.5% higher annually.&nbsp; The ONS Private Rents Index, which we benchmark against, is still showing growth of 8.4% in the year to August, but new lets data from Homelet data shows average rents were 4.3% higher in
    September 2024 than they were a year earlier. We expect ONS figures could end the year higher than our 4.5% forecast, but the significant imbalance between tenant demand and supply has levelled off in recent months so we expect some further heat will
    come out of the rental market as we move into 2025. </p><h2><strong>Lessons from the (recent) past</strong></h2><p>Looking back over the last 25 years, price growth (taken here in five-year chunks to mirror our five-year outlook) shows three distinct periods for growth. Before the Global Financial Crisis five-year growth of 60% or more was the norm. But the period
    of re-correction that followed saw much of this froth removed from the market as five-year growth fell back to single digits or low teens to compensate for the significant tightening of the debt markets. </p><p>But for the last decade, despite significant variation in mortgage rates and a global pandemic, house prices rises over a five-year term have remained remarkably consistent. Peaking in 2017 at 33% but otherwise ranging from 21% to 27%.&nbsp;</p><p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1730756189/resi/gb/Articles/Images/Resi-Forecast-Chart-2.jpg" /></p><h2><strong>UK Economy</strong></h2><style>td,
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<div style="overflow-x:auto;" align="center"><table cellspacing="0" cellpadding="0" border="1" align="left"><tbody><tr class="red"><th scope="col"></th><th scope="col">2025</th><th scope="col">2026</th><th scope="col">2027</th><th scope="col" data-role="resizable">2028</th><th scope="col" data-role="resizable">2029</th><th scope="col">Change 2025-29</th></tr><tr><td>CPI (OBR)</td><td>2.6</td><td>2.3</td><td>2.1</td><td>2.1</td><td>2.0</td><td>11.6</td></tr><tr><td>Wages (OE)</td><td>2.7</td><td>2.4</td><td>2.5</td><td>2.8</td><td>2.9</td><td>14.0</td></tr><tr><td>UK GDP (OBR)</td><td>2</td><td>1.8</td><td>1.5</td><td>1.5</td><td>1.6</td><td>8.7</td></tr></tbody></table></div><p style="text-align:left;">Source: JLL Research using Office of Budget Responsibility, Oxford Economics</p><p style="text-align:left;">The outlook for economic growth remains muted, with inflation expected to sit a little higher than the Bank of England&rsquo;s 2% target until 2029.&nbsp; But the Bank of England rate cutting cycle is expected to continue and assuming swap rates settle
    post Budget and the US election we&rsquo;ll likely see mortgage rates fall back too - if not quite as quickly as we had hoped. </p><p style="text-align:left;">Consensus forecasts suggest rate cuts will run through until the end of 2026, with mortgage rates expected to become more competitive over this period. Following a similar trend to 2024 we anticipate lower value markets will benefit first.&nbsp; Activity
    will be driven by first time buyers, with home movers following once rates become more attractive. Higher value markets in London and the south are expected to see stronger growth in the second half of our five-year forecast period.</p><h2><strong>Market activity</strong></h2><style>td,
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<div style="overflow-x:auto;" align="center"><table cellspacing="0" cellpadding="0" border="1" align="left"><tbody><tr class="red"><th scope="col" data-role="resizable"></th><th scope="col" data-role="resizable">2024</th><th scope="col">2025</th><th scope="col">2026</th><th scope="col" data-role="resizable">2027</th><th scope="col">2028</th><th scope="col">2029</th></tr><tr><td>Housing Starts</td><td>135,000</td><td>157,000</td><td>179,000</td><td>199,000</td><td>224,000</td><td>244,000</td></tr><tr><td>Transactions</td><td>1.0m</td><td>1.2m</td><td>1.3m</td><td>1.3m</td><td>1.3m</td><td>1.4m</td></tr></tbody></table></div><p>Source: JLL Research, Experian</p><p>Committing to build 1.5 million homes over the course of this parliament, the government has set itself an ambitious target.&nbsp; But ramping up delivery without any demand side stimulus will be a real challenge. Current supply side plans have started
    to put the building blocks in place to ramp up delivery but increasing delivery in a meaningful way with current planning, labour force, and supply chain constraints won&rsquo;t be a quick fix. JLL forecast new housing starts across the UK will total
    1 million homes between 2025 and 2029.&nbsp; Conversions of existing stock (currently accounting for around one in ten net additions) are expected to rise too, so we&rsquo;ve allowed (possibly sightly ambitiously) for 200,000 in the next five years
    taking us to a forecast of 1.2 million homes.<br /></p><h2 style="text-align:left;"><strong>Sales price forecasts</strong></h2><style>td,
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<div style="overflow-x:auto;" align="center"><table cellspacing="0" cellpadding="0" border="1" align="left"><tbody><tr class="red"><th scope="col">Sales price growth (% pa)</th><th scope="col">2025</th><th scope="col">2026</th><th scope="col">2027</th><th scope="col" data-role="resizable">2028</th><th scope="col">2029</th><th scope="col">Change 2025-29</th><th scope="col">Average pa 2025-29</th></tr><tr><td>UK</td><td>3.5</td><td>4.0</td><td>4.5</td><td>3.5</td><td>3.0</td><td>19.9</td><td>3.7</td></tr><tr><td>Greater London</td><td>2.5</td><td>3.5</td><td>5.0</td><td>5.0</td><td>4.0</td><td>21.6</td><td>4.0</td></tr></tbody></table></div><p style="text-align:left;">Source: JLL Research </p><p>A new government with ambitious plans for housebuilding and more comfortable with a higher tax environment, particularly for wealthier households, could mean future growth prospects differ from the recent past. But neither of the these seem a sufficient
    departure from the current trend to meaningfully change the path of growth over the coming five-year period (2025-2029). </p><p>We do expect higher rates (even if they fall back from current levels) will limit growth prospects, meaning our 2025-2029 forecasts sit at the lower end of the recent five year averages. </p><p>We expect growth of 19.9% nationally 2025-2029. London house prices are expected to increase by 21.6% over the same period, underpinned by a lack of new homes reaching the market for sale. We expect lower value markets to see stronger growth towards the
    beginning of our five-year forecast period, with more expensive markets outperforming once the rate cutting cycle continues into 2026 and 2027.&nbsp; <br /></p><h2 style="text-align:left;"><strong>Rental forecasts</strong><strong></strong></h2><style>td,
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<div style="overflow-x:auto;" align="center"><table cellspacing="0" cellpadding="0" border="1" align="left"><tbody><tr class="red"><th scope="col">Rental growth (% pa)</th><th scope="col">2025</th><th scope="col">2026</th><th scope="col">2027</th><th scope="col" data-role="resizable">2028</th><th scope="col">2029</th><th scope="col">Change 2025-29</th><th scope="col">Average pa 2025-29</th></tr><tr><td>UK</td><td>3.0</td><td>2.5</td><td>3.0</td><td>3.5</td><td>4.0</td><td>17.1</td><td>3.2</td></tr><tr><td>Greater London</td><td>2.5</td><td>3.0</td><td>3.5</td><td>4.0</td><td>4.0</td><td>18.2</td><td>3.4</td></tr><tr><td>UK BTR</td><td>3.0</td><td>3.5</td><td>3.5</td><td>4.5</td><td>4.5</td><td>20.5</td><td>3.8</td></tr></tbody></table></div><p style="text-align:left;">Source: JLL Research </p><p style="text-align:left;">In the five years to September 2024 rents rose nationally by 27%. But the rapid rise in rents in the last three years isn&rsquo;t reflective of the long-term trend.&nbsp; Five-year growth figures in early 2020 sat at around 12%, when rents broadly tracked
    wage growth. </p><p style="text-align:left;">The supply demand imbalance which has in part driven rent rises (wage growth and inflation also contributed) is now becoming more balanced, but a lack of new stock entering the market means we anticipate rental growth will exceed wage growth and inflation
    over the next five years. </p><p style="text-align:left;">The October Budget did little to change our view.&nbsp; Capital Gains Tax for residential property remained the same, meaning exit costs didn&rsquo;t rise, but entry costs did.&nbsp; Landlords looking to purchase homes now having to pay an additional
    2% stamp duty over the previous already elevated bill. We expect this will mean more traditional buy-to-let landlords will leave the market than enter over the next five years. </p><p style="text-align:left;">But activity in the sales market is expected to increase too, likely meaning an increase in tenants moving across into owner occupation, alleviating some demand side pressures in the short term.&nbsp; </p><p style="text-align:left;">JLL forecast UK rents will rise 17% over the next five years, with rental growth in the London expected to total 18% over the same period.</p><h2 style="text-align:left;"><strong>What to watch</strong></h2><ul><li style="text-align:left;"><strong>EPC C by 2030</strong> &ndash; Around half of all privately rented homes nationally are EPC D or below.&nbsp; As we move closer to the 2030 deadline, we expect some landlords will offload less efficient stock or remove properties from the
        market to retrofit to meet the new standard. Expect rents to rise in the run up as stock levels fall. For sales, landlords selling properties could bring more lower value homes to the market impacting average prices.<br /></li><li style="text-align:left;"><strong>Renters Right Bill</strong> &ndash; Current proposals include the provision for tenants to challenge market busting rental increases. Our forecast for lower annual increases will help cushion the impact here but may limit the potential for
        growth in some markets, particularly if the courts are overwhelmed with applicants. Landlords concerned around the impact of the bill could also chose to exit the market, particularly as the sales market improves.<br /></li><li style="text-align:left;"><strong>Buyer incentives</strong> &ndash; With the stamp duty threshold returning to its previous &pound;300,000 level for first time buyers next spring there was surprisingly little in the budget to incentivise buyers.&nbsp; However, there was reference
        to Phase 2 of the Spending Review in Q2 2025, so we could see further incentives or concessions introduced then.<br /></li><li style="text-align:left;"><strong>Rates &ndash; </strong>A more rapid fall in mortgage rates could mean higher value markets see stronger growth earlier.<br /><strong></strong></li><li style="text-align:left;"><strong>Housebuilding &ndash; </strong>The government has ambitious plans for new homes.&nbsp; We do expect activity to increase but still assume starts will lag the 1.5 million target. Our current forecast accounts for stock scarcity in the new homes
        market towards the start of the five-year period with new development activity not expected to be sufficiently high to have any negative impact on prices.<br /></li><li style="text-align:left;"><strong>International buyers and prime London &ndash;</strong> Changes to non-dom rules and increases in SDLT on additional properties mean higher costs for overseas buyers. But a lack of stock, particularly of new homes, means those who are in the
        market may find choice scarce and competition for the best stock remains strong.&nbsp;</li></ul>

JLL Residential Forecast 2025-2029

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Houses prices expected to rise by 20% in the next five years as lower mortgage rates bring buyers back to the market. Rental growth slows from recent highs.

<strong>Houses prices expected to rise by 20% in the next five years as lower mortgage rates bring buyers back to the market. Rental growth slows from recent highs.</strong>

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<p>The announcement on additional borrowing had already unsettled investors in the run up to the budget, driving government borrowing costs to a five-month high.&nbsp; But leaks and briefings on some key policies pre-Budget appear to have had the desired
    effect meaning we&rsquo;re still below post mini-budget levels.</p>
<p>For housing there was little evidence of some of the much-speculated changes we heard rumour of in the run up. Some will see this as a missed opportunity.&nbsp; But this is far from the worst-case scenario many had feared. And clarification on government
    plans, or at least an end to pre-budget speculation, should bring more prospective buyers back to the market.</p>
<p>After all, the housing market looks to be in decent shape.&nbsp; Mortgage approval figures in September were at their highest for more than two years, with lower rates bringing more prospective buyers back to the market.&nbsp; Prices are edging up in
    response and activity across the market is recovering, too.</p>
<p><strong>So what was in the budget for housing? </strong></p>
<h2><strong>UK economy on the path to recovery</strong></h2>
<p>The latest figures from the Office for Budget Responsibility (OBR) suggest the UK economy will grow by 1.1% this year and by 2.0% in 2025 in real terms. Inflation (CPI) is expected to sit marginally above the 2% target each year until 2029. </p>
<h2><strong>Stamp Duty Land Tax (SDLT)</strong></h2>
<p>Changes to stamp duty rules mean those purchasing properties in addition to their main residence (buy-to-let and second homes) will now pay a 5% rather than 3% surcharge. Adding &pound;10,000 to the stamp duty bill for a &pound;500,000 home. </p>
<p>The single rate of SDLT charged on the purchase of dwellings costing &pound;500,000 or more by corporate bodies will also rise from 15% to 17%. </p>
<p>Increases in rates were not necessarily viewed as a significant revenue raiser (an extra &pound;400 million by 2029/30) but would rather level the playing field between first time buyers and investors. But extra stamp duty for additional properties was
    not accompanied by an increase in incentives for first time buyers, with nothing in the budget on the first time buyer zero rate thresholds, which are due to drop back from &pound;425,000 to &pound;300,000 in April 2025. Instead, the government has
    committed to consult the industry on extending the mortgage guarantee scheme, effectively a 5% deposit scheme for first time buyers. News on that is promised in Phase 2 of the Spending Review next Spring.</p>
<h2><strong>Capital Gains Tax (CGT)</strong></h2>
<p>Tax on gains for residential property were left at their current level of 18% for lower rate and 24% for higher rate tax payers. Disposal of other assets, including shares, was normalised with residential property at 24%. With suggestions that &lsquo;normalisation&rsquo;
    could have been imposed with income tax rates, this should add some comfort to those in the sector. &nbsp;</p>
<h2><strong>Affordable housing</strong></h2>
<p>The government reaffirmed its commitment to deliver more affordable homes.&nbsp; A &pound;500million top up was promised for the Affordable Homes Programme and a consultation for an ongoing five-year rent settlement at CPI+1 (guaranteeing the rent cap
    on the amount providers can charge) was announced.&nbsp; Those wanting clarity on future grant investment will need to wait until the Spending Review in Q2 next year.</p>
<h2><strong>Right to Buy</strong></h2>
<p>Discounts for those purchasing through Right to Buy scheme will be reduced and councils in England will be able to keep all the receipts from sales to deliver new homes. This will need further investment to stem the loss of social housing through the
    scheme, with the latest annual figures showing 3,046 homes started using Right to Buy receipts versus 6,275 sold. </p>
<h2><strong>Inheritance tax (IHT)</strong></h2>
<p>The Chancellor announced current inheritance tax thresholds will be frozen until 2030, two years ahead of plans pre-budget. This means individuals can continue to leave &pound;325,000 free of tax, rising to &pound;500,000 if leaving your home to your
    children. Couples can inherit each other&rsquo;s allowance, meaning if you tick all the boxes &pound;1million can be left free of IHT. </p>
<p>But new rules will bring previously exempt assets into play, meaning pensions, which had been IHT exempt, will fall within the totals from April 2027. Owners of agricultural and business property, again previously able to benefit from exemptions, will
    from April 2026 need to consider their liabilities over certain thresholds, although allowances will mean an effective rate of 20% rather than 40%. </p>
<h2><strong>Housing supply</strong></h2>
<p>We&rsquo;ve already heard from the government on its plans for delivering more homes, so perhaps a lack of detail within the budget was to be expected. The government committed &pound;5bn to their housing building programme in 2025/26 and repeated its
    commitment to provide 300 new planners (effectively less than one per authority), but the new planning framework (NPPF) due at the end of the year is expected to fill in some further gaps here. </p>
<h2><strong>Non-doms</strong></h2>
<p>As expected, the government announced it will end current non-domiciled tax rules from April 2025 and introduce a new residence-based system. For those looking to bring assets into the UK, the government will extend the temporary repatriation facility
    from two to three years. This isn&rsquo;t new, and follows similar plans announced under the Conservatives. The budget confirmed that only gains made after April 2017 will be considered as part of the new proposals, but the door is still open for
    government to bring worldwide assets within the scope of UK inheritance tax.</p>
<h2><strong>What we missed</strong></h2>
<p>With the government having already announced plans to reinstate ambitious housing targets post-election we had hoped the budget would include some news on stimulus for demand. Yet incentives for home purchase, changes to stamp duty land tax (aside from
    the increase for additional properties) and the reintroduction of Multiple Dwellings Relief were conspicuous in their absence this time around. </p>
<p>More positive news on the UK economy and further interest rate cuts expected before the end of the year will likely support house price growth. But while we acknowledge increasing demand when supply remains low could challenge affordability further, the
    government needs to reassure developers and investors that there will be a market for a higher number of new homes they&rsquo;ve committed to deliver.&nbsp;</p>

Residential Roundup – Budget Special

With the plans from the first Labour Budget in 14 years expected to bring in an extra &pound;40bn &ndash; read Marcus Dixon&rsquo;s overview of what was included for housing, in this week&rsquo;s Residential Roundup.

With the plans from the first Labour Budget in 14 years expected to bring in an extra £40bn – read Marcus Dixon’s overview of what was included for housing, in this week’s Residential Roundup.

<strong>The first Labour Budget in 14 years was never going to please everyone. This was a tax raising Budget, with the Chancellor&rsquo;s plans expected to bring in an extra &pound;40bn. Employers will be shouldering much of the financial responsibility, with funding public services core to Labours plans.</strong>

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<h3 class="featuredProperties__title"><span class="featuredProperties__title-featured typography-hero">Featured </span><span class="featuredProperties__title-project typography-hero"> properties </span></h3>

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