<p>Following the September meeting, the Monetary Policy Committee held the UK Bank Rate at 3.75 per cent, with the number of doves remaining at six and the hawks (favouring tighter economic policy and higher rates) at three. Despite the position remaining
    the same as at their last meeting, expectations of a rate hike, fuelled by comments from the Governor Andrew Bailey that &ldquo;policy may have to tighten&rdquo;, mean focus has now shifted to the next meeting (post-Budget) on 5th November. This all
    appears to leave the Bank of England as the outlier. But it is important to remember that the UK went into this at a different point in the rate-cutting cycle, with the differential between the UK and ECB rates widening since mid-2024 as they cut
    rates earlier.</p><img src="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1790070596/resi/gb/cms/News/Images/Slide1-_Residential_Roundup_-_18_September.png" /><sup>Source: Bank of England</sup>
<h2>Economy</h2>
<p>High oil and energy costs (both a global, not just local, issue) are feeding into higher inflation. The latest CPI figures show the annual rate rising from 2.9 per cent to 3.1 per cent. This wasn&rsquo;t a surprise for economists, but with inflation expected
    to exceed 4 per cent by early 2027, double the Bank&rsquo;s 2 per cent target, it cannot be as easily dismissed as the blip some had hoped for. </p>
<p>As a result, swaps and mortgage rates remain elevated. Moneyfacts figures show average rates on two-year fixes at 5.77 per cent, the highest since May, and five-year fixed rates reaching 5.83 per cent, a level not seen since November 2023.</p>
<p>But another announcement from the Bank of England, this time in relation to gilts, is more welcome. The announcement that the Bank will pause all bond sales for six months or more and hold onto some of its longest-dated gilts was welcomed by the markets.
    As a result, 30-year gilt yields fell 0.12 percentage points to reach 5.74 per cent, marking the best day for markets since May and some much-needed relief from higher borrowing costs </p>
<h2>Housing market</h2>
<p>Rents rose nationally by 3.8 per cent in the 12 months to August, the highest annual increase so far this year. All regional markets except the South East saw rents rise at rates above-inflation, with the North East and North West both recording the highest
    annual increase at 5.8 per cent. In the sales market, just two regions (North East and North West) saw above inflation increases, nationally, prices rose 1.4 per cent, with London and the South West both seeing price falls of -3.3 per cent and -0.2
    per cent respectively.</p><img src="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1790070596/resi/gb/cms/News/Images/Slide2-Residential_Roundup_-_18_September.png" /><sup>Source: JLL Research using HomeLet, ONS, Bank of England &ndash; assumes two-year fix at 75% LTV</sup>
<h2>Rent or buy?</h2>
<p>Higher mortgage costs mean that in pricier markets the difference in cost between buying and renting a home is increasing. In London, where almost a third of homes are rented privately, it would cost on average 9 per cent more to buy a home rather than
    rent, based on average values. This compares with the period pre-2022 when buying a home with a 75 per cent loan-to-value mortgage was broadly the same cost. While some buyers could in theory bridge the monthly cost gap to buy a home, the ability
    to save a deposit remains a significant barrier. The average deposit for those looking to put down 25 per cent would be almost &pound;139,000, the equivalent of saving more than five years&rsquo; rent. Even at a 10 per cent deposit, prospective buyers
    would need to save the equivalent of two years&rsquo; rent. </p>
<h2>Housebuilding</h2>
<p>Barratt Redrow, the UK&rsquo;s largest residential developer, has trimmed its annual completion target to 17,500&ndash;17,900 homes, down from earlier guidance of 17,700&ndash;18,200. This follows an improvement in housing delivery in the year to June,
    with 17,667 homes delivered, up 5 per cent on the previous 12-month period. Chief Executive David Thomas pointed to resource-strapped local authorities as one of the reasons behind their expectations of a reduction in output over the coming year,
    with site opening delays limiting the group to around 405 active developments this year. </p>
<p>The financials painted a mixed picture. Statutory pre-tax profit jumped 48 per cent to &pound;363.5m, but adjusted profit slipped 7 per cent to &pound;572.8m as construction costs climbed and house prices edged down roughly 1 per cent. Still, the adjusted
    profit figure beat analyst expectations, sending shares up 11.7 per cent.</p>
<p style="font-size:15px;">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 - 18 September

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

The Bank of Japan has raised interest rates to 1.25 per cent, a 31-year high. This follows similar moves from the Federal Reserve, which increased rates this week for the first time in more than three years, rising to 3.75 per cent to 4 per cent.

<strong>The Bank of Japan has raised interest rates to 1.25 per cent, a 31-year high. This follows similar moves from the Federal Reserve, which increased rates this week for the first time in more than three years, rising to 3.75 per cent to 4 per cent. The European Central Bank is in a hawkish mood too, increasing rates by 25 basis points at their September meeting, the second rate rise since June.</strong>

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<p>The UAE residential market experienced notable recalibration during Q2 2026, with both sales prices and rental rates moderating from elevated levels. Dubai's total sales value reached AED 87.9 billion, though transaction volumes declined 28.6% year-on-year
    as regional uncertainty affected buyer sentiment.</p>
<p>Government intervention defined the quarter, with Abu Dhabi freezing rental increases and Dubai launching the Flexi Rent initiative to improve affordability through flexible payment terms. These coordinated policy measures signal a fundamental shift toward
    enhanced tenant protection and market stability.</p>
<p>With approximately 40,000 units scheduled for delivery in H2 2026, developers are increasingly partnering with international brands to differentiate their offerings amid rising competition. Abu Dhabi showed greater resilience with new rental registrations
    up 9.9% in H1 2026, while quarter-on-quarter trends indicate softening momentum across both emirates as cooling demand and expanding supply continue to reshape the market landscape.</p>
<p><strong>For detailed market analysis and insights, <a href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1789547237/resi/gb/cms/News/PDFs/UAE_Living_Market_Dynamics_-_Q2_2026.pdf" target="_blank">download the full Q2 2026 UAE Living Market Dynamics report.</a></strong></p>

UAE Residential Market Recalibrates in Q2 2026

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<p>The UAE residential market demonstrated relative resilience during Q1 2026 despite regional conflict impacting transaction activity from late March. Dubai's total sales value reached AED 137.3 billion, with transaction volumes up 3.9% year-on-year, though
    weekly transaction values declined nearly 50% at the conflict's peak compared to pre-conflict averages.</p>
<p>Sales prices continued growing but at a decelerating pace, with Dubai's average prices increasing 9.0% annually, moderating from previous 16-19% appreciation rates. Abu Dhabi's off-plan market drove transaction volumes to more than double year-on-year,
    supported by new project launches, while rental rates showed strong momentum with apartments up 14.3% and townhouses rising 17.8%.</p>
<p>With approximately 59,000 units under construction scheduled for delivery in 2026, the conflict heightened risks to supply-demand equilibrium. Developers began offering incentives including cash discounts, flexible payment plans, and waived fees to maintain
    sales momentum, though these remained constrained to specific segments. The off-plan market showed relative resilience compared to the secondary market, which experienced sharper declines as uncertainty challenged buyer sentiment in certain segments.</p>
<p><strong>For detailed market analysis and insights, <a href="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1789547237/resi/gb/cms/News/PDFs/UAE_Living_Market_Dynamics_-_Q1_2026.pdf" target="_blank">download the full Q1 2026 UAE Living Market Dynamics report.</a></strong></p>

UAE Residential Market Demonstrates Resilience in Q1 2026

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<p>As a result, we&rsquo;ve seen further hikes in government bond yields, with UK gilts rising to their highest level since the financial crisis in 2008 or in some cases even longer. 30-year gilts hit 5.89 per cent earlier this week, their highest since
    1998, with 10-year gilts at 5.25 per cent.</p>
<p>This won&rsquo;t be a welcome return to work for Andy Burnham or his new Chancellor, with estimates suggesting higher bond yields could wipe more than &pound;10bn from John Healey&rsquo;s fiscal headroom in advance of the next Budget on 28 October. And
    with the Office for Budget Responsibility running its usual calculations in the run-up, even if conditions improve it&rsquo;s likely that these will feed into their forecast. Meaning the government will be expected to spend more servicing debt.
</p>
<p>There are likely some new leadership wobbles impacting here too, but this is far from a UK specific issue. Indeed, the UK economy has been more resilient than many had expected earlier in the year. Back in January the consensus forecast for UK GDP was
    for growth of 1 per cent in 2026. Following heightened geopolitical uncertainty this dropped back to 0.6 per cent in the Spring, but expectations have returned to January&rsquo;s 1 per cent figure in the latest August consensus numbers. Inflation
    expectations remain higher than they were back in January, but despite recent increases inflation is expected to top out below some of the higher forecasts we&rsquo;ve seen in recent months.</p><img src="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1789449805/resi/gb/cms/News/Images/Slide1.png" />
<h2>House prices </h2>
<p>Mortgage approvals dropped back in July, with 15 per cent fewer approvals for house purchase than in the same month a year earlier. An assortment of housing stats released over the summer have pointed to what remains a broadly flat market.</p>
<p>The Nationwide House Price Index, the first to report August figures, shows prices were 1.6 per cent higher than they were a year ago. This is a slightly rosier picture than that portrayed by the Lloyds Index (formerly the Halifax House Price Index) which
    puts prices just 0.1 per cent higher than July 2025 (we&rsquo;ll need to wait until Monday for their August number). Most markets have seen marginal price increases, but price growth has remained broadly below inflation. This means that affordability
    continues to improve, at least when viewed on a house price-to-income ratio basis. Nationwide figures show inflation adjusted house prices are 18 per cent lower than they were in Q1 2022 (non-inflation adjusted they are 7 per cent higher) with the
    house price to household income ratio nationally at its lowest since 2014 at 5.6X income. But higher mortgage rates continue to erode the benefits of the increase in spending power.</p>
<h2>Mortgage markets</h2>
<p>Higher bond yields and sticky inflation have impacted swap rates, meaning average fixed rates have crept up in recent months, all at a time when we&rsquo;d been hoping for some respite. Those shopping for a two-year fix are currently paying an average
    of 5.5 per cent according to Moneyfacts, with best-buy rates circa 4.5. This means that homeowners are having to pay more each month to borrow the same amount or if they keep their outgoings the same are forced to borrow less.</p>
<p>If we take an average priced London home, currently &pound;554,000 according to the Land Registry, those purchasing at 75 per cent loan to value over 25-years would be paying just over &pound;2,550 per month for a repayment mortgage at 5.5 per cent. This
    is almost &pound;3,000 a year more than those who managed to secure a 4.5 per cent fix, and almost &pound;6,000 a year higher than if rates were at 3.5 per cent&mdash;the level best-buys hit back in early February.</p>
<p>Or to keep repayments at the &pound;2,000 a month paid at 3.5 per cent buyers paying 4.5 per cent would be borrowing &pound;40,000 less and at 5.5 per cent their borrowing power would be reduced by &pound;76,000.</p><img src="https://res.cloudinary.com/jll-global-olm-np/image/upload/v1789449807/resi/gb/cms/News/Images/Slide2.png" />
<h2>Rental Market</h2>
<p>A cautious sales market continues to benefit lettings. July figures from HomeLet show rents rose 4.3 per cent nationally in the last 12 months, with rents in London rising 6 per cent over the same period.</p>
<p>Respondents to the latest RICS survey reported an increase in new tenant enquiries for the seventh consecutive month. Meanwhile, landlord instructions remained down, with a net balance of -22 per cent reporting a fall&mdash;the last time more respondents
    reported an increase was back in March 2022.</p>
<h2>Checking our homework</h2>
<p>With English schools heading back this week it's a good opportunity to check our view on 2026. We reforecast house prices and rents back in May, downgrading our short-term outlook for prices and increasing our rental expectations for 2026. </p>
<p>Using the latest government figures shows average prices are currently 1.2 per cent higher nationally in June than they were in December. We&rsquo;re forecasting the year to end broadly flat (down 0.5 per cent), which would mean a fall in prices of 1.7
    per cent in H2. In London we&rsquo;re expecting prices to fall 2.5 per cent this year. Current annual falls sit at that level, but prices have risen marginally since December, meaning to end the year at 2.5 per cent down we&rsquo;d need a 3.3 per
    cent reduction in prices in H2.</p>
<p>Average rents (for both new lets and existing tenancies from the ONS Private Rents Index) are up 1.9 per cent since December and 3.7 per cent annually. We're forecasting 3.5 per cent for 2026, meaning we'll need a further 1.6 per cent (or &pound;22) increase
    to rents to hit our December forecast. In London we're forecasting 3 per cent this year, rents rose 2.2 per cent to December to July (up 3 per cent annually) meaning just a further 0.8 per cent needed between now and December. Not far off for the
    UK but a bit light for London? We'll need to wait and see. </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>

Residential Roundup - 4 September

Blog Post 4

With so many returning from their summer break we had hoped to share some more positive news on rates. It’s not all negative, but elevated fuel and energy costs continue to keep the market guessing on inflation, both domestically and overseas. 

<strong>With so many returning from their summer break we had hoped to share some more positive news on rates. It&rsquo;s not all negative, but elevated fuel and energy costs continue to keep the market guessing on inflation, both domestically and overseas.&nbsp;</strong>

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Big Six Residential Development Report - Summer 2026

Blog Post 5

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<p><strong>UKREiiF reflections: Morgan Skillen shares her thoughts on sector challenges and opportunities from a Next Generation perspective</strong></p>
<p><em>Morgan Skillen, Surveyor - Housing Consultancy at JLL</em></p>
<p>This year marked my first time attending UKREiiF &ndash; The UK&rsquo;s Real Estate Investment and Infrastructure Forum, a multi-day conference that&rsquo;s essentially the Glastonbury of the real estate world. All the big names were lined up to headline
    and everyone and their neighbour was attending.</p>
<p>Heading up to Leeds last week, I was a little apprehensive as to what the event would be like. In a male-dominated industry with only 20% of RICS members being female and the number dropping significantly further as you move to RICS fellow level, I considered
    whether there would be many &ldquo;only woman in the room&rdquo; moments. However, I was pleasantly surprised by the diversity across the panels I attended and the wider delegate base. That said, upon arrival, there was still a sea of navy suits and
    gilets along Armouries Way! <strong></strong></p>
<h2>A market under pressure</h2>
<p>One key takeaway from UKREiiF is that the real estate market is facing pressure from all angles - no surprise there, right? The challenges across each sector were widely discussed, with common themes emerging around viability constraints, lack of funding,
    and the need for private-public partnerships.</p>
<p>As a surveyor, specialising in Affordable Housing, I&rsquo;ve always taken a keen interest in the living sector, which is why I found Bevan Brittan&rsquo;s breakfast event on<em> &lsquo;The Future of the Living Sector&rsquo; </em>incredibly thought-provoking.</p>
<p>It moved beyond the current macroeconomic environment we are all very well versed in and focused on the operational challenges arising from the Renters Reform Act 2026. &nbsp;Discussions also explored whether we are shifting to a predominantly renting
    society and how viability challenges are in turn, putting an affordability strain on the middle-market homeowners and renters.&nbsp; These themes were echoed across the conference, along with discussion on how to overcome the wider challenges faced
    by the housing market. </p>
<p>One of the primary discussion points was investment and funding. At a panel on &lsquo;<em>Unlocking affordable homes to power growth in the south west&rsquo;</em>, Selina White, CEO of Manna Housing, shared a compelling statistic for further investment
    into affordable housing: &ldquo;For every &pound;1 invested in affordable housing, c.&pound;3 is generated for the local economy.&rdquo; This is driven by the construction phase but continues as new residents bring more local spending into the economy.
    Interest in entering the affordable housing market has increased, with more investors looking at the market. However, patient capital willing to take a long-term view is essential to help with the delivery of more affordable homes.</p>
<p>The collective view from UKREiiF was clear: investment and public-private partnerships are not just beneficial but essential to addressing the housing crisis but these are not without challenges. However, most affordable homes will still likely be delivered
    by not-for-profit Registered Providers via direct delivery/Section 106. In the midst of all the discussions on the challenges facing the market, there was an air of positivity noting that the residential market is resilient and people are optimistic
    that there are routes forward to be found. </p>
<h2>A Next Generation perspective</h2>
<p>I was invited to attend UKREiiF, as part of the Next Generation contingent. This is targeted at young professionals early in their real estate careers. I am 26 years old, and have been with JLL for almost 4 years, starting out on their graduate scheme,
    before becoming a permanent member of the Affordable Housing Consultancy team.</p>
<p>As referenced above, this was my first large-scale conference, and I was slightly unsure what to expect. Attending an event with many senior and influential people, is a little daunting to say the least. In the build-up to the event, I started to get
    that &ldquo;first day of school&rdquo; feeling and was hoping that the big kids would be nice to me! What I experienced was the best outcome that could be hoped for; there was no difference in treatment between me, a young, female, first-time conference
    attendee, and more senior people in the sector. I was actively involved in conversations, my questions in seminars were engaged with and my thoughts were heard.</p>
<p>During UKREiiF, I had a few insightful conversations with several senior people, two common threads emerged in their careers: confidence and sponsorship &ndash; the impact of having a senior person believe in them, encourage them to seize opportunities,
    and on occasion, actively create opportunities for them. </p>
<p>This is something I've benefited from personally at JLL, and I am committed to paying it forward. I hope to see more of this across the industry, particularly from senior leaders supporting up-and-coming professionals in their company and sectors.</p>
<p>My key takeaways from UKREiiF on a personal level, which I will carry with me into future conferences and advice I will share with other first-time conferences goers is, to absorb the atmosphere, learning everything you can but also to back yourself.
    Have the confidence to ask the questions, engage in conversations and share your thoughts when you have a perspective.</p>
<p><strong>&nbsp;</strong></p>

UKREiiF reflections: Morgan Skillen

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Fixing London’s New Homes Market

Our Q2 2026 London New Homes Report is here. Download now for the latest market intelligence and expert insights on London's housing sector.

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<p><strong>The JLL Rental Index reports average rents and agent sentiment within London, across the following JLL office patches: Finsbury Park, Wood Green, Nine Elms, City, Canary Wharf, Greenwich, Stratford and Kew.</strong></p>
<h3>Market summary - Q1 2026</h3>
<ul>
    <li><strong>Average rents across JLL&rsquo;s eight London offices rose 2% annually in Q1 2026.</strong></li>
    <li><strong>Greenwich and Canary Wharf recorded the highest annual rental growth in Q1, at 4%.</strong></li>
    <li><strong>All offices have reported an increase in lease renewals in the first three months of the year. The City is the only office patch which has reported no change in lease renewals over a 12-month period.</strong></li>
</ul>
<p><strong>&nbsp;</strong></p>
<p>Rising levels of supply and softening tenant demand have defined the London lettings market over the past twelve months. In turn, landlords have found themselves in a more competitive environment, putting downward pressure on rental growth across the
    capital. </p>
<p>Average rents across JLL's London offices rose by 2% annually in Q1 2026, with Greenwich and Canary Wharf outperforming, recording growth of 3.7% and 3.8% respectively.</p>
<p>We have seen a clear shift in tenant behaviour over the past two years; properties are taking longer to let, and renewal rates have risen as tenants choose to stay put rather than move, in order to avoid higher rents. Meanwhile, we expect some landlords
    to exit the rental market in the coming months prompted by the Renters&rsquo; Rights Act and higher taxation. However, we do anticipate the traditional spring and summer uptick in home mover activity to provide some opportunity for rental growth in
    the coming months. </p>
<p>In markets such as Finsbury Park, higher levels of supply have limited rental growth over the past year, while strong demand across The City and Canary Wharf have kept rents stable &ndash; a trend we expect to continue over the next two quarters as we
    see students and graduates securing homes for the 2026/27 academic year.</p><iframe src="https://flo.uri.sh/visualisation/29067356/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><br />
<h2>&nbsp;</h2>
<h2>Annual rental growth: Canary Wharf and Greenwich are top performers<strong><br /></strong></h2>
<p>Canary Wharf and Greenwich were top performers among JLL offices in Q1 2026. Average rents rose 1.9% and 2.7% over the quarter in Canary Wharf and Greenwich respectively, bringing annual growth to 4% across both markets. Strong demand fundamentals and
    good connectivity have underpinned rents in these areas.</p>
<p>However, properties rented in Canary Wharf in the last month have been on the market for an average of 38 days, which is 90.7% longer than a year ago. Despite the Elizabeth Line's transformative impact on connectivity and ongoing infrastructure improvements
    unlocking the area's potential, the extended marketing period reflects the broader softening in tenant demand affecting even well-connected locations this quarter. </p>
<p>Wood Green, Nine Elms and Stratford recorded modest annual growth between 2% - 3%, while the City&rsquo;s annual growth held steady at 1.1%. Within Nine Elms, mainstream locations maintained positive annual growth while prime areas saw average rents decline
    over the year, driven by fewer home movers and occupiers choosing to renew leases.</p>
<p>Finsbury Park shifted from positive annual growth of 1.8% in Q4 2025 to a contraction of 0.2% in Q1 2026, while Kew saw growth slow sharply from 2.2% to just 0.3% over the same period. More muted growth in these areas is a reflection of fewer new applicant
    registrations and increased days on market, both signaling weaker tenant demand and reduced pricing power for landlords in this location.</p><iframe src="https://flo.uri.sh/visualisation/29082834/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><br />
<h2>&nbsp;</h2>
<h2>3-Year Growth: Across all London locations, rents rose 11.8% over three years</h2>
<p>Rental trends across London over the past three and five years reveal a clear pattern &mdash;the market has been climbing steadily, but growth is now becoming more measured.</p>
<p>Three-year growth remains strong in most locations, ranging between 8%-17%, however increased level of supply has softened this growth in recent quarters. Wood Green led with the highest growth at 16.7%, followed by Greenwich at 16.0%, supported by consistent
    tenant demand. Other locations ranged from 9.6% to 13.3%, reflecting more balanced dynamics after the post-pandemic surge.</p>
<h2>5-Year Growth: Nine Elms and Canary Wharf Achieved Highest Growth<br /></h2>
<h2></h2>
<p>On average, rents have risen by 42% over the past five years, across all eight JLL London offices. Growth has ranged between 31% and 56%.</p>
<p>Nine Elms has been the strongest performer over the past five years, seeing 55.6% growth in rents. This has been driven by strong long-term demand in prime riverside areas. Within Nine Elms, SW11 Prime rental property saw rental growth shy of 70% over
    a five-year period. </p>
<p>Canary Wharf follows with 53.1% growth. Prime rental homes across Canary Wharf have benefitted from corporate tenant demand and proximity to financial services hubs, while the mainstream market benefits from strong student demand.</p>
<p>Significant five-year growth across London has been driven by a fundamental supply and demand imbalance&mdash;but here's what's changing: the pace is now easing as new supply enters the market and affordability constraints begin to limit rental increases.</p>
<h2>Market Sentiment: Momentum Remains Subdued as We Begin 2026<br /></h2>
<p>The number of new applicants registering over the last 12 months has decreased across most locations including Canary Wharf, Finsbury Park, Kew, Nine Elms, and Stratford, while remaining stable in the City, Greenwich and Wood Green. </p>
<p>The number of new landlord instructions over the last 12 months has increased in four locations including Canary Wharf, City, Greenwich, Kew, and Wood Green, remained stable in Nine Elms, and decreased in Finsbury Park and Stratford. This divergence between
    declining tenant demand and growing landlord supply suggests a shift towards a tenant-favourable market, creating increased competition among landlords and putting downward pressure on rental growth.</p>
<p>All locations reported increases in lease renewals over the past year except the City, a reasonable response to a more challenging economic environment where tenants look to avoid higher rents associated with moving property. Days on the market before
    finding a tenant have increased over the last 12 months in five locations including Canary Wharf, Finsbury Park, Greenwich, Stratford, and Wood Green and remained stable in others. </p>

JLL Rental Index – Q1 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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<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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<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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JLL PCL Report - Q1 2026

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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.

https://res.cloudinary.com/global-cms-assets-np/image/upload/v1774534204/resi/AU/Insights/SA-Election.png

<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%

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

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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.

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<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

Big Six Residential Development Report 2026

The JLL Big Six Residential Development Report compares activity, prices, and rents across six UK cities: Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester. This report incorporates data from the JLL UK Cities index, comparing changes in prices and rents across mainstream and prime developments in each city.

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<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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JLL PCL Report – Q4 2025

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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>
<p><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1768581921/resi/gb/Articles/Images/Roundup-Jan16-Chart1.jpg" /></p>
<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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<article class="prime-residential-content" data-sf-ec-immutable=""><div class="article-body"><p class="lead">Sydney's prime residential landscape is experiencing significant shifts that savvy investors and homeowners need to understand.</p><p>If you're considering your next move in Sydney's most coveted markets, there are critical insider trends you need to know about. Our latest Prime Residential Drivers Report reveals the key forces shaping Sydney's most desirable postcodes &ndash;
            and what it means for your property decisions.</p><div class="cta-section"><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1768991977/resi/AU/Insights/Images/Insider_Tips_-_Sydney_Prime_Residential_Market_Shift.pdf" class="cta-link" target="_blank" rel="noopener noreferrer">Download your complimentary Prime Residential Drivers Report 📊
            </a>
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Insider Tips: Sydney Prime Residential Market Shift

Discover the key shifts in Sydney's prime residential market. Get insider analysis on the most coveted postcodes and what drives property decisions in luxury markets.

Sydney Prime Residential Market: Critical Trends & Insider Analysis 2026

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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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<h2>Introduction<br /><strong></strong></h2><p>Riverside living along the Thames has a timeless appeal, combining scenic beauty, cultural heritage, and a dynamic lifestyle. This blog explores why owning a home by the river is highly coveted in London, highlighting the unique benefits and lifestyle
    opportunities that come with Thames-side properties.</p><h2>Lifestyle and Investment Benefits<strong></strong></h2><ul><li><strong>Scenic Views and Recreational Opportunities:</strong>
 <ul><li>Explain how proximity to the river enhances quality of life through leisure activities and natural beauty.</li></ul></li><li><strong>Cultural and Historic Significance:</strong>
 <ul><li>Highlight the connection between Thames-side living and London&rsquo;s rich cultural heritage.</li></ul></li><li><strong>Strong Investment Performance:</strong>
 <ul><li>Discuss market trends that indicate robust demand and stable property values in riverside locations.</li></ul></li></ul><h2>Conclusion</h2><p>Living along the Thames offers a unique blend of beauty, lifestyle, and investment appeal. For those seeking a property that embodies the spirit of London, riverside homes deliver a captivating living experience and strong long-term value.</p><h2>Sources:</h2><ul><li>JLL Lifestyle and Investment Reports</li><li>CBRE London Waterfront Studies</li><li>Historic England and Local Authority Data</li></ul><p>&nbsp;</p>

The Appeal of Riverside Living along the Thames

Experience the charm of riverside living in London. We talk about the benefits and lifestyle advantages of owning a home along the iconic Thames. #ThamesLiving #JLLRealEstate

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<h2>Introduction<br /></h2><p>Traditionally known as a global financial centre, Canary Wharf is witnessing a significant transformation as it becomes an attractive residential destination. This blog examines the drivers behind this shift, including urban regeneration, lifestyle enhancements
    and market trends that are turning the area into a sought-after residential hub.</p><h2>Transformation Drivers</h2><ul><li><strong>Urban Regeneration Projects:</strong>
 <ul><li>New mixed-use developments, improved public spaces, and enhanced transport links are redefining Canary Wharf.</li></ul></li><li><strong>Lifestyle and Community Appeal:</strong>
 <ul><li>Increased focus on leisure, dining, and green spaces is making the area more family-friendly and appealing to residents.</li></ul></li><li><strong>Investment Potential:</strong>
 <ul><li>Rising demand for residential units and strong rental yields are attracting both local and international investors.</li></ul></li></ul><h2>Conclusion<strong><br /></strong></h2><p>The transformation of Canary Wharf into a residential hub represents a new chapter for one of London&rsquo;s most dynamic areas. With robust redevelopment plans and a shift in market demand, this evolution offers significant opportunities for homebuyers
    and investors alike.</p><h2>Sources:</h2><ul><li>JLL Urban Regeneration Reports</li><li>CBRE Canary Wharf Studies</li><li>Greater London Authority Updates<br /></li></ul>

Why Canary Wharf Is Transforming into a Residential Hub

<div><span style="background-color:initial;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;word-spacing:normal;caret-color:auto;white-space:inherit;">Canary Wharf is not the same anymore! We discover why this iconic financial district is transforming into a vibrant residential hub and what it means for investors and homebuyers. #CanaryWharf #JLLRealEstate</span></div><div><br /></div>

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<h2>Introduction</h2><p>Stamp duty and other property-related taxes are critical components of the total cost of buying a home in London. Understanding how these taxes are calculated and what exemptions or reliefs might apply is essential for budgeting and planning. This blog
    demystifies the complex tax structure, offering practical insights for prospective buyers.</p><h2>Breakdown of Key Taxes</h2><ul><li><strong>Stamp Duty Land Tax (SDLT):</strong>
 <ul><li>Explain the tiered structure, thresholds, and how the tax is calculated.</li></ul></li><li><strong>Additional Property Taxes:</strong>
 <ul><li>Overview of other applicable taxes, including second home surcharges and potential capital gains implications.</li></ul></li><li><strong>Planning and Budgeting:</strong>
 <ul><li>Provide tips on how to factor these taxes into your overall property budget and strategies for tax efficiency.</li></ul></li></ul><h2>Conclusion</h2><p>A clear understanding of stamp duty and related taxes is essential for anyone buying property in London. With careful planning and expert advice, buyers can navigate these costs confidently and optimize their investment strategy.</p><h2>Sources:</h2><ul><li>JLL Taxation Guides</li><li>HM Revenue &amp; Customs Publications</li><li>CBRE Financial Insights</li></ul>

Stamp duty and property taxes can be a headache when buying overseas property. We share how to simplify these costs, providing clear guidance for buyers navigating London&rsquo;s property tax landscape. #LondonTaxes #JLLInsights

First-Time Homebuyer Tips for Navigating London’s Property Market

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<h2>Introduction</h2><p>London&rsquo;s luxury real estate sector is renowned for its sophistication and exclusivity. High-net-worth individuals (HNWIs) are driving demand for premium properties, with trends evolving in response to global events, lifestyle changes, and shifting
    investment priorities. We explore the latest buyer behavior trends and the factors influencing luxury property transactions in London.</p><h2>Trends Among High-Net-Worth Buyers</h2><ul><li><strong>Preference for Exclusivity:</strong>
 <ul><li>HNWIs increasingly seek properties that offer privacy, bespoke amenities, and unique architectural designs.</li></ul></li><li><strong>Lifestyle and Investment Considerations:</strong>
 <ul><li>Buyers are not only looking for luxurious living but also for properties that serve as sound investments, offering stable returns and long-term value.</li></ul></li><li><strong>Global Influence:</strong>
 <ul><li>International buyers are drawn to London&rsquo;s luxury market by its status as a global financial center and cultural hub.</li></ul></li></ul><h2>Market Drivers and Buyer Behavior</h2><ul><li><strong>Personalization and Customization:</strong>
 <ul><li>The demand for tailor-made properties that reflect individual lifestyles is at an all-time high.</li></ul></li><li><strong>Tech Integration and Smart Homes:</strong>
 <ul><li>Luxury buyers are increasingly seeking homes equipped with advanced technology that enhances comfort and security.</li></ul></li><li><strong>Sustainability and Eco-Friendly Features:</strong>
 <ul><li>A growing number of affluent buyers consider environmental sustainability an essential aspect of luxury living.</li></ul></li></ul><h2>Conclusion</h2><p>London&rsquo;s luxury real estate market continues to evolve, driven by sophisticated buyer behavior and global economic trends. Understanding these trends is crucial for developers and agents looking to cater to the discerning tastes of high-net-worth
    buyers while ensuring sustainable, long-term growth.</p><h2>Sources:</h2><ul><li>JLL Luxury Market Reports</li><li>CBRE Global Luxury Trends</li><li>Financial Times Real Estate Analysis</li></ul><p>&nbsp;</p>

Luxury Real Estate in London: Trends in High-Net-Worth Buyer Behavior

Luxury Real Estate in London Trends in High-Net-Worth Buyer Behavior

Eyeing your next home in London&rsquo;s luxury real estate market? We uncover the latest trends in high-net-worth buyer behavior and what drives demand for exclusive properties. #LondonLuxury #JLLInsights

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<h2>Introduction</h2><p>Entering London&rsquo;s property market for the first time can be both exciting and overwhelming. With high prices and fierce competition, first-time buyers need a solid strategy to secure their dream home. We offer practical, research-based advice from
    budgeting and financing to choosing the right neighbourhood ensuring that new buyers can confidently navigate the market.</p><h2>Essential Tips for First-Time Buyers</h2><ul><li><strong>Budgeting and Financing:</strong>
 <ul><li>Develop a realistic budget, factoring in hidden costs such as stamp duty, legal fees, and moving expenses. Secure pre-approval for a mortgage to strengthen your bargaining position.</li></ul></li><li><strong>Research and Due Diligence:</strong>
 <ul><li>Use trusted sources and market reports from JLL and CBRE to understand neighbourhood trends, price movements and potential investment returns.</li></ul></li><li><strong>Choosing the Right Location:</strong>
 <ul><li>Consider factors like connectivity, future development plans, and local amenities when selecting an area.</li></ul></li><li><strong>Engage Professionals:</strong>
 <ul><li>Work with experienced real estate agents, mortgage brokers, and legal advisors who specialize in London property transactions.</li></ul></li></ul><h2>Navigating the Process</h2><ul type="disc"><li><strong>Property Viewing and Inspections:</strong></li><ul type="circle"><li>Attend multiple viewings and conduct thorough inspections to avoid costly surprises.</li></ul><li><strong>Negotiation Tactics:</strong></li><ul type="circle"><li>Be prepared to negotiate on price and terms, and don&rsquo;t be afraid to walk away if the deal doesn&rsquo;t meet your requirements.</li></ul></ul><h2>Conclusion</h2><p>For first-time buyers in London, preparation and informed decision-making are key. By following these tips and leveraging expert advice, new buyers can overcome challenges and secure a home that meets both their needs and long-term investment goals.</p><h2>Sources:</h2><ul type="disc"><li>JLL Homebuyer Guides</li><li>CBRE Residential Market Data</li><li>UK Mortgage and Legal Advisory Services<br /></li></ul>

<span style="font-size:10.0pt;line-height:107%;font-family:'Calibri',sans-serif;mso-ascii-theme-font:minor-latin;mso-fareast-font-family:DengXian;mso-fareast-theme-font:minor-fareast;mso-hansi-theme-font:minor-latin;mso-bidi-theme-font:minor-latin;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language:AR-SA;">Buying your first home in London? We share a
comprehensive guide providing first-time homebuyers with essential tips for
navigating London&rsquo;s competitive property market. #LondonHomeBuyers #JLLInsights</span>Buying your first home in London? We share a comprehensive guide providing first-time homebuyers with essential tips for navigating London&rsquo;s competitive property market. #LondonHomeBuyers #JLLInsights

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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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Residential Roundup

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<div>There are few who would question the need to deliver more homes. Research from Centre for Cities suggests Britain has a 4.3 million home deficit compared with the average European country. Meaning we would need to build almost 450,000 homes per annum over the next 25 years to satisfy future demand and address the historic deficit. At present we struggle to hit 200,000.</div>

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Residential Roundup - 1 September

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<div class="row">
    <h2><strong style="background-color:initial;font-size:inherit;text-align:inherit;text-transform:inherit;word-spacing:normal;caret-color:auto;white-space:inherit;">Q2 2023 Sales Index</strong><br /></h2>
</div>
<p><strong></strong>The JLL Prime Central London Index saw prices fall for the third consecutive quarter.&nbsp; The Q2 2023 index recorded a quarterly fall of 2.1%, with prices 5.9% down compared with the same period in 2022. Prices are now 6.8% lower than
    they were when prices peaked in the third quarter last year.&nbsp; </p>
<p>The upper echelons of London&rsquo;s prime market are proving more resilient. With prices down 0.8% in the 12 months to June 2023 compared with a 6.7% fall in homes priced at under &pound;2 million (likely to be most impacted by changes in interest rates).
</p>
<p>Despite sentiment impacting prices we saw deals agreed (exchanges) increase in an admittedly slow Q1 this quarter, with a 28% increase in sales in Q2 2023.&nbsp; With volumes on par with Q2 2022 (down -1.2%). </p>
<p>Stock levels rose in Q2, with 8.3% more properties on the market than in Q2 2022 and 9.7% more than at the end of the first quarter this year. Stock on the market is now at the highest level since the end of Q2 2020. </p>
<h2><strong>Q2 2023 Lettings Index</strong></h2>
<p><strong></strong>The uncertainty which is hampering activity in the sales market often has the opposite effect on lettings. With households more likely to stay in rented for longer or choosing to rent when delaying their decision to buy. Just over half
    (51%) of JLL deals agreed in Q2 2023 were renewals, up from 45% a year ago and 24% in Q2 2021. This was the highest rate of renewal since Q2 2020. </p>
<p>The number of new lets rose this quarter compared with last, up 13%.&nbsp; But the second quarter is usually more active than the first. Comparing new lets agreed (excluding renewals) in the second quarter this year with Q2 last year showing there were
    18% fewer deals agreed, with the number agreed down 35% compared with the Q2 five-year average.</p>
<p>This quarter the JLL Prime Central London Index saw rents rise by 1.9%, with rents 5.4% higher than they were at the same point a year ago. Small flats (1 and 2 beds) saw this highest annual increase in rents at 6.7% whereas more expensive properties
    (&pound;3,000 per week or more) saw a more modest 2.9% annual increase. </p>
<p>Rents are now 26% higher for one-bedroom flats (which have seen the highest growth) than they were three years ago at the end of Q2 2020. With the JLL Prime Central London Rental Index 19.2% higher overall over the last three years.</p>
<p>For prospective tenants having to contend with low stock levels there appears to be some respite as we move into the summer. Stock levels are starting to increase, albeit off a low base. With the number of rental properties listed to let at the end of
    Q2 2023 up 13.8% on the same point in 2022. But volumes remain 55% down on levels we were seeing pre-pandemic in Q2 2019. </p>
<h2>All Source: JLL/ LonRes</h2>
<p><strong>Our JLL Prime Central London Index is based on a &lsquo;basket&rsquo; of properties, valued by JLL at the end of each quarter. </strong></p>
<p><strong>Director of UK Residential Research at JLL, Marcus Dixon, explains: </strong></p>
<p><em>&ldquo;The implications of stubborn inflation on the UK mortgage market are hampering activity in prime central London. While fewer buyers are heavily indebted - almost half buy cash - uncertainty surrounding the short-term outlook is impacting prices. </em><em></em></p>
<p><em>&ldquo;The lettings market remains competitive, stock levels have improved on their 2022 lows but there are still more prospective tenants than there are properties. This has resulted in further rent increases this quarter, with rents almost 20% higher than they were in 2020.</em><em></em></p>
<p><em>&ldquo;The lower end of the rental market continues to see a steady stream of (formerly) prospective buyers moving across into lettings. With smaller properties, mainly one- and two-bedroom flats, recording the highest annual increase in rents, while prices for similar properties are seeing more significant falls than homes in more expensive price bands.&rdquo;</em></p>

JLL – Prime Central London (PCL) Index – Q2 2023

The recent rise in interest rates does not impact all sectors of the housing market equally.

Prime Central London (PCL) Index – Q2 2023

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<p>The Renters (Reform) Bill was introduced to parliament on 17th May 2023. It follows the 2022 private rented sector white paper, which outlined the government&rsquo;s aspirations for the future of privately rented homes. The bill aims to deliver on the
    government&rsquo;s plan to &ldquo;bring in a better deal for renters&rdquo;, which includes the ending of &lsquo;no fault&rsquo; evictions. These changes of course have implications for landlords too, but the bill aims to allay some of their concerns
    by strengthening Section 8 powers under which landlords can recover their properties.</p><p>Further regulation includes proposals for a new property portal and rental redress scheme, which aim to make it easier for landlords and tenants to resolve issues and for councils to track and penalise rogue landlords. For landlords, increased use of
    Section 8 could also make it easier to identify tenants with a history of rent arrears and antisocial behaviour, aiding the tenant referencing process and mitigating risk for those taking on new tenants.</p><p>But we are still at an early stage. The bill is entering the approval period, where questions on the detail behind the proposals can be answered and views sought. The bill must follow a set path before receiving Royal Assent and becoming law. The next
    step will be a second reading, giving MPs the opportunity to scrutinise the bill and make any amendments to the proposals. This will also be an opportunity for interested parties to contact their MP to put forward their views on the proposals.</p><p>The bill must then progress through committee, parliament, and the House of Lords before details are agreed and Royal Assent is sought. This is a lengthy process, with the time from bills being introduced to becoming law often exceeding 12 months.</p><h2>Current proposals include:</h2><p><strong>The end of the AST - </strong>Section 21 will be abolished, aiming to provide tenants with greater security. Fixed term tenancies will be scrapped, meaning a tenancy will end only if the tenant chooses to leave (usually by giving two months&rsquo;
    notice) or the landlord is able to provide a valid reason to end the tenancy. To assist with this Section 8 will be strengthened to allow landlords to recover their properties. From six months into the tenancy landlords may give the tenant notice
    (usually two months) to vacate if they are looking to move back into the property, sell or redevelop. Landlords can also gain possession if the tenant is in breach of their tenancy or falls into arrears.</p><p>If implemented, it is likely changes will apply first to new tenancies, with existing tenancies transitioned across into the new structure within a pre-defined period. There are some exemptions for students lets, however this could we be one of the elements
    of the bill where we see some changes introduced.</p><p><strong>Annual rental reviews&nbsp;</strong><strong>&ndash;</strong><strong>&nbsp;</strong>Rental increases will be limited to one per year, with new powers for tenants to challenge above market rate rental increases through a tribunal.
</p><p><strong>Pets&nbsp;</strong><strong>&ndash;</strong><strong>&nbsp;</strong>Landlords must have reasonable grounds to refuse a tenant the right to request a pet in their rented property. It is not yet clear what constitutes &lsquo;reasonable grounds&rsquo;,
    hopefully this will become clearer as the process progresses, but tenants who are refused can use the new redress scheme to refer the final decision to the ombudsman. For landlords, existing regulations will be strengthened to ensure tenants are liable
    for any damages caused by their pets.</p><p><strong>Redress scheme &ndash; </strong>Proposals for a single redress scheme for both landlords and tenants. The ombudsman will provide a free service if tenants have complaints regarding their landlord, the standard of the property, or any outstanding
    repairs. Under current proposals landlords would not be able to make a complaint about a tenant to the ombudsman but they could be offered mediation services to settle disputes between them and their tenants. Landlords would be required to join the
    scheme with local councils empowered to take enforcement action against those who fail to sign up. Lettings agents will not be required to join.</p><p><strong>New property portal &ndash; </strong>Landlords will need to sign up to a new property portal. This will be a digital record of the landlord and their properties. Landlords will need to be registered and keep records on themselves and their rental
    properties up to date to legally market a property to let. Proposals are for councils to have access to the portal to enable them to flag any unspent offences or restrictions in the landlord&rsquo;s name.</p><p>More detail on the bill can be found <a href="https://www.gov.uk/guidance/guide-to-the-renters-reform-bill" target="_blank">here</a>.</p><p>Our team here at JLL will keep you updated throughout the process and are here to answer any questions you may have on the bill or the implications for you as a landlord or tenant.</p><h2>JLL Research | June 2023</h2><p>JLL is a leading global professional services firm specialising in real estate and investment management, with $16.6bn annual revenue in 2020, operations in over 80 countries and a global workforce of over 90,000. With over 7,000 employees and 15 offices
    in the UK, we support our investor, developer and occupier clients at every stage of the property lifecycle across both commercial and residential asset classes. This includes land purchase, access to capital, planning, development advisory, leasing,
    building management and sales.</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>&nbsp;</p><p><sup>Disclaimer: <sup>&copy;</sup> 2023 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>

Renters Reform Bill

The Renters (Reform) Bill was introduced to parliament on 17th May 2023. It follows the 2022 private rented sector white paper, which outlined the government&rsquo;s aspirations for the future of privately rented homes.

The Renters (Reform) Bill was introduced to parliament on 17th May 2023. It follows the 2022 private rented sector white paper, which outlined the government’s aspirations for the future of privately rented homes.

market-update-may-23

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<p><strong>The housing market remains more resilient than many had anticipated. The latest results from the RICS Survey show market conditions remain challenging, with agents still expecting prices to fall in the coming months in response to higher borrowing costs and uncertain market sentiment. But the outlook for the next 12 months remained more positive. </strong></p><p><strong>Over the longer term there is a clear commitment from both Labour and the Conservatives to support home ownership. But until we see rates top out, we expect the market to continue to tread water. This means lower levels of activity, but prices will, we expect, remain more resilient as a lack of distress and high levels of equity act as a buffer to more challenging economic conditions. </strong></p><h2>The economy</h2><p>The outlook for the UK economy is improving, with the IMF upgrading their 2023 UK forecast. Echoing recent announcements from the Bank of England the IMF no longer expects the UK will fall into recession this year, with their latest forecasts expecting
    GDP will rise in 2023. Growth is expected to be modest at +0.4% but reflects a welcome venture into positive territory following the previous -0.3% forecast in April. This improved outlook means the UK no longer sits at the bottom of the list of G7
    economies for 2023, now moving ahead of Germany.</p><p>But inflation is still proving stickier than many had hoped. Rates have fallen, with single digit annual increases for the first time since August 2022. It was always anticipated that rates would drop back this month, with the impact of rising energy
    costs priced into rates a year ago, but the 8.7% annual increase remained higher than the Bank of England and many forecasters had anticipated.</p><p>Further falls in energy costs in the coming months will help to bring inflation down further, but annual food price inflation remains at 19.1% according to the latest ONS figures.</p><p>Core inflation (calculating the rise in costs when energy and food, alcohol and tobacco are stripped out) rose by 6.8% in the year to April, up from 6.2% in March. With the recent increase in five-year swap rates and stubbornly high inflation meaning
    a further rise in Bank Rate at the June MPC appears more likely.</p><h2>New development</h2><p>Activity in the new homes market remains muted. While schemes on site continue to deliver homes, levels of new starts have dropped and activity in the sector has been more subdued in Q1. The National House Building Council (NHBC) reported new build completions
    fell 7% annually in Q1 2023 but the number of new homes registered to be built fell 40% to less than 28,000. This follows news that new applications in 2022 fell 14% on 2021 levels, now at their lowest level since 2006, according to figures from the
    DLUHC. In London, Molior reports constructions starts down 43% on Q1 2022.</p><h2>House prices</h2><p>Considering the considerable change that has been thrust upon the UK housing market this year it remains remarkably robust. Activity has dropped back, but we are starting to see the reaction to the initial interest rate and sentiment shock following the
    mini budget recede, as prospective buyers re- enter the market. With time on the market and mortgage approvals all starting to recover from the lows of late 2022 and early 23.</p><p>Low levels of unemployment, wage growth (albeit mostly below inflation), and more equity within the market all mean forced sales are less prevalent. But for those who are looking to transact in this market there does need to be some realism about prices
    and additional cost facing purchasers.</p><p>The latest Land Registry figures show all regions saw a monthly fall in prices in March, with prices UK wide 1.2% lower than in February, the fourth consecutive monthly fall. Prices are now 2.4% below their November peak but remain 4.1% higher than they
    were a year ago.</p><p>After seven consecutive monthly falls the Nationwide reported house prices rose 0.5% in April, but prices dropped back marginally in the latest May figures, down 0.1% month-on-month with prices falling annually by -3.4%, now -4% lower than they were at
    the peak last summer. The Halifax reported at -0.3% fall in April, following a rise of 0.8% the previous month, with prices on par (+0.1%) with April 2022. First time buyer activity is proving more resilient than expected, with a competitive rental
    market driving those who can to buy instead.</p><p>Falls in achieved prices show higher rates and rising costs are impacting the housing market, although both activity and prices appear more resilient than many had expected. The latest figures from Rightmove show asking prices rose in May, up 1.8%, higher
    than the usual 1.0% May figure.</p><p>Uncertainty over rates appears to have put the brakes on the recovery in mortgage approvals posted in March. Seasonally adjusted figures from the Bank of England showing the number of mortgages approved for house purchase fell by 5%, from 51,500 in March
    to 48,700 in April. The average rate on new mortgages rose to 4.46% in April, up 5 basis points on March figures. Overall borrowers repaid &pound;1.4bn more than was lent in April 2023, which aside from the pandemic was the biggest net repayment on
    record.</p><h2>Rents</h2><p>The rental market continues to record near double digit growth in rents on new lets. The Homelet Rental Index showing annual rental growth remains strong at 9.9% across the UK in April 2023, with a current average rent of &pound;1,199, 1.3% higher than
    the March figure. London saw rents rise annually by 11.0%, with average rents on new lets exceeding &pound;2,000 per month. Scotland saw the highest annual increase, with rents on new lets rising 12.1%.</p><h2>Global view</h2><p>In the US, the Federal Reserve increased its key interest rate by 25 basis points, pushing its benchmark rate to between 5% and 5.25%. This is the tenth time rates have increased since March 2022. Rates could be topping out though with the Fed hinting
    at a pause on further rate rises when they next meet in June.</p><p>Singapore has announced a doubling of its Additional Buyer Stamp Duty. Overseas buyers purchasing a property in Singapore will now pay 60% tax on their purchase, with those buying using a trust will pay 65%. Permanent residents buying second homes in
    the city will also pay more.</p><h2>What&rsquo;s new from JLL</h2><p>Our latest Prime Central London report shows rents rose again in Q1 2023, but prices have dropped 4.3% compared with Q1 2022. Read more <a href="https://residential.jll.co.uk/insights/research/prime-central-london-q1-2023">here </a></p><h2>JLL Research | May 2023</h2><p>JLL is a leading global professional services firm specialising in real estate and investment management, with $16.6bn annual revenue in 2020, operations in over 80 countries and a global workforce of over 90,000. With over 7,000 employees and 15 offices
    in the UK, we support our investor, developer and occupier clients at every stage of the property lifecycle across both commercial and residential asset classes. This includes land purchase, access to capital, planning, development advisory, leasing,
    building management and sales.</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: <sup>&copy;</sup>2023 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>

JLL Residential Market Update – May 2023

The housing market remains more resilient than many had anticipated. The latest results from the RICS Survey show market conditions remain challenging, with agents still expecting prices to fall in the coming months in response to higher borrowing costs and uncertain market sentiment. But the outlook for the next 12 months remained more positive.

The housing market remains more resilient than many had anticipated. The latest results from the RICS Survey show market conditions remain challenging, with agents still expecting prices to fall in the coming months in response to higher borrowing

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Spotlight on Cambridge

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JLL Residential - Spotlight on Cambridge&nbsp;

JLL Residential - Spotlight on Cambridge

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Affordable and attractive London hotspots for First Time Buyers

ftb-hub-blog-1

House prices have risen significantly nationally over the last three years, and it feels as if the first step onto the housing ladder has become more challenging. Despite this, the dream of owning their first home for many is not dwindling.

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<p><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1683722906/resi/gb/Articles/PDFs/PCL_Report_Q1_2023_-_V8.pdf" target="_blank"><button class="Button primary" style="text-align:center;">Download full report</button></a></p>
<p>A higher proportion of homes bought with cash and a sustained lack of stock in the most sought-after locations means Prime Central London (PCL) is less tied to fluctuations in UK mortgage rates.<strong> </strong>However, the central London market is not
    immune to changes in economic conditions, with sentiment rather than interest rates often having a greater impact on activity and pricing. And while Prime Central London is less reliant on debt the discretionary nature of many purchasers buying decisions
    means PCL is often more reactive to changes in sentiment and economic headwinds than mainstream, both when prices fall and when they increase.</p>
<p>&nbsp;For the rental market, uncertainty often increases demand with prospective purchasers holding off on their decision to purchase and renting or remaining in rented instead. We continue to see demand outstripping supply for prime homes, but there
    is more balance in the market this year than we have seen over the last 12 months. Stock levels, while still significantly lower than the pre-pandemic norms have improved, and rental growth recorded in the Q1 2023 JLL Prime Central London Index has
    returned to single rather than double digit annual growth.</p>
<p><a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1683722906/resi/gb/Articles/PDFs/PCL_Report_Q1_2023_-_V8.pdf" target="_blank"><button class="Button primary" style="text-align:center;">Download full report</button></a></p>

Prime Central London – Q1 2023

jll-residential-market-update-april-2023

How has the Prime Central London (PCL) housing market performed so far this year, and how much of an impact will the ongoing economic headwinds have on the sector?

<strong>How has the Prime Central London (PCL) housing market performed so far this year, and how much of an impact will the ongoing economic headwinds have on the sector?</strong>

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<p><strong>Inflation remained stubbornly in double digits (just) in March. With a rate of 10.1% meaning expectations of
        a further rate rise at the next MPC meeting are looking more likely. Consensus amongst forecasters is for rates
        to now top out higher than the 4.25% to 4.5% anticipated earlier in the year. Albeit, then expected to fall back
        later this year. Confidence in the UK economy is returning, with ratings agency S&amp;P Global upgrading the UK
        rating, reversing the post mini-budget downgrade, as well as reaffirming the AA rating for UK debt.</strong></p><p>News is mixed on the jobs front too. Unemployment edged up in March to 3.8%, from 3.7% in February. The number of
    payrolled employees is rising, with figures showing a million more payrolled workers nationally in March 2023
    compared with pre-pandemic
    in March 2020 (a 3.5% increase). Rates had risen the most in London (+4.0%) and Northern Ireland (+5.0%) in the
    three years to March. Despite this the job market has been slightly less frenetic than it has been of late, with
    government figures showing
    the number of vacancies fell for the ninth consecutive month in March, albeit at 1.1 million they remain higher than
    the pre-pandemic norms. Wage growth in the three months to February averaged 6.6%. But spending power continues to
    be eroded by increases
    in living costs, particularly food and energy, with real wages (accounting for inflation) dropping 2.3%.</p><h2>Sales market</h2><p>The latest figures on house prices show quite a spread in performance between indices, with the Nationwide figures
    for March suggesting an annual fall of 3.1%, with prices falling for the seventh consecutive month. Figures from the
    Halifax put prices
    in March 1.6% higher than they were a year ago, up 0.8% on the previous month (Nationwide is reporting a 0.8%
    monthly fall). The Land Registry, tracking completions and usually less reactive to changes in the market, is
    reporting February figures,
    with prices down 1.0% monthly but still showing an annual increase of 5.5%.</p><p>But the consensus amongst agents is that prices have softened so far this year. The latest RICS survey suggesting
    respondents were more likely to have seen houses prices fall in their market in the last three months, with the net
    balance -47% for the
    UK and -43% for London.</p><p>According to the RICS survey, demand for homes remained more subdued in March too.&nbsp; More agents reported a
    reduction in new buyer enquiries, with the net balance relatively unchanged from the previous month at -29%
    nationally. London respondents
    reported a fall in new buyer enquiries too, but results were less clear cut, with a net balance of -7% seeing fewer
    buyers.</p><h2>The mortgage market</h2><p>Just over 40,000 loans were approved for house purchase in February, 37% up on the lows of January 2023 but still 37%
    down on volumes last February and 18,000 (31%) shy of February 2019 levels. Yet despite further rises in the Bank
    Rate, fixed rates offered
    by lenders are more competitive, with both two- and five-year fixed rates at their most competitive since the
    mini-budget in March 2023, with rates sub 4.3% for a two-year fix and below 4.8% for a five-year according to
    figures from the Bank of England.</p><h2>The rental market</h2><p>Rents are still rising nationally.&nbsp; The latest figures from Homelet show all UK regions saw rents rise both
    annually and month-on-month. UK rents rose to a new high of &pound;1,184 per month, up 0.8% on February 2023 and
    9.8% on March 2022. London
    recorded the highest annual increase of any UK region, with rents up 0.2% monthly and 11.8% annually in March.</p><p>Tenant demand nationally continues to be strong. The non-seasonally adjusted net balance is at a five months high of
    +46%, while landlord instructions still lag, with more agents reporting landlord instructions falling in the last
    three months. In London,
    market conditions are similar, with more agents reporting an increase in tenants registering (the net balance
    increased from +31% to +40% month-on-month) and landlord instructions failing to keeping pace with demand, with a
    net balance of -20% in
    March. A shortage of stock combined with strong demand is expected to put additional pressure on rents. The
    near-term rent expectations balance (those expecting them to rise) increased from +45% to +59% month-on-month.</p><h2>Forecasts</h2><p>JLL forecasts remain unchanged. We anticipate price falls in most markets this year as purchasers try to balance
    increases in living costs and higher interest rates. But with significant levels of equity and a resilient
    employment market we expect these
    falls to be limited to single digits in 2023. Rents are forecast to rise in all markets this year, supported by
    increases in wages and supply shortages.<br /></p><h2>JLL Research | April 2023</h2><p>JLL is a leading global professional services firm specialising in real estate and investment management, with
    $16.6bn annual revenue in 2020, operations in over 80 countries and a global workforce of over 90,000.&nbsp; With
    over 7,000 employees and 15
    offices in the UK, we support our investor, developer and occupier clients at every stage of the property lifecycle
    across both commercial and residential asset classes. This includes land purchase, access to capital, planning,
    development advisory,
    leasing, building management and sales.</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>&nbsp;</p><p><sup>Disclaimer: <sup>&copy;</sup> 2023 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>

JLL Residential Market Update – April 2023

Inflation remained stubbornly in double digits (just) in March. With a rate of 10.1% meaning expectations of a further rate rise at the next MPC meeting are looking more likely.

https://res.cloudinary.com/global-cms-assets-np/image/upload/f_auto/q_auto/v1682585949/resi/gb/Articles/Images/Market_update_-_April_23.jpg

<p>2022 was a record-breaking year for Prime
Central London (PCL). Buyers spent almost &pound;5.2
billion on homes last year, 9% higher than in
2021, already a strong year, and the highest
amount spent for more than ten years. Even in
2014, when sales reached &pound;4.94 billion, 5% less
was spent than in 2022.</p><p><a href="https://res.cloudinary.com/drt5ol8ck/image/upload/v1673866400/videos/APAC%20Articles/JLL_PCL_Report_Q4_2022.pdf" target="_blank">Download report </a></p>

Prime Central London Report - Q4 2022

thumbnail_Cover Photo - UK Report

https://res.cloudinary.com/drt5ol8ck/image/upload/v1674037890/videos/APAC%20Articles/thumbnail_Cover_Photo_-_UK_Report.png

<p><a href="https://storymaps.arcgis.com/stories/5c2aeccd86c64c6abe619f4e73b8b183" target="_blank"><button class="Button primary">View the full report</button></a></p><br /><p><strong>The JLL Big Six Residential Report compares activity, prices, and rents across six UK cities outside London: Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester. This report incorporates data from the JLL UK Cities index, comparing changes in prices and rents across mainstream and prime developments in each city. </strong></p><p>In the last ten years UK cities have recorded some of the highest increases in new residents. Figures from the 2021 census show that across England &amp; Wales more than 33.6 million people, over 56% of the population, lived in cities, 2 million more
    than in 2011. </p><p>With the pandemic accelerating the adoption of hybrid working some questioned the future of urban living. But the influx of new residents heading for our regional cities proves there is more to city living than just the attraction of a short commute.
</p><p>Demand for homes has risen across our Big Six cities this year. Back in 2020 and early 2021 we saw an acceleration in the number of households looking to leave urban areas and escape to the country. Yet 2022 has firmly signalled the return to the city.
    Students and young professionals are returning in their droves. Rents have risen this year across all our Big Six cities and the new homes market, both build-to-sell and build-to-rent has seen activity increase too. </p><p>Help to Buy has been a key source of demand for city centre new build over the last ten years. Across the four English cities, over 13,200 equity loans have been issued on Help to Buy homes since the beginning of the scheme. &nbsp;But with 31 October
    marking the end of Help to Buy registrations nationally we were already anticipating interest from first-time buyers would fall in 2023. Combine this with recent rate rises and we expect the number of first-time buyers could fall further.&nbsp;But
    with fewer households buying homes we anticipate demand for rental properties will increase. </p><p>Almost 100,000 homes have been completed in the city centres of the Big Six in the last ten years. </p><p>Demand for homes has meant prices achieved in the last three years have risen by an average of 14.6%. The JLL Cities index, which values new flats in each city shows prices have risen by between 4.9% and 17.6%. </p><p>Demand for rental properties has increased too. With rents rising by an average of 15.4% across the Big Six. Leeds recorded the highest annual increase in rents, with scarcity of stock pushing average rents for new homes in the city up by more than 20%
    in summer 2022 compared with the same period a year earlier.</p><p>&nbsp;</p><p><a href="https://storymaps.arcgis.com/stories/5c2aeccd86c64c6abe619f4e73b8b183" target="_blank"><button class="Button primary">View the full report</button></a></p>

Big Six Residential Development Report

big6 image

The JLL Big Six Residential Report compares activity, prices, and rents across six UK cities outside London: Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.

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<a href="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1667401050/resi/gb/Articles/PDFs/JLL_UK_Residential_Forecasts_Q4_2022.pdf" target="_blank"><button class="Button primary">Download full report</button></a>
<p>&nbsp;</p>
<p>The last 15 years have seen UK house prices reach new highs on the back of a period of record low borrowing costs. Never prior to 2008 had the UK base interest rate dipped below 2%. But in the period since the Global Financial Crisis (GFC) it has averaged
    0.5% and hit a low of 0.1% during Covid.</p>
<h2><strong>Interest Rates</strong></h2><iframe src="https://flo.uri.sh/visualisation/11644913/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;text-align:center;" 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><br />A spike in borrowing costs &ndash; and an anticipated further steep rise in mortgage rates - alongside continued high inflation and a rising cost-of-living have prompted predictions from the most bearish forecasters of 20%-30% falls in UK house
    prices. </p>
<p>But UK house prices have never fallen by more than 20%. And this prompts a question of whether the underlying market prospects are now truly worse than the early 90s recession where house prices fell 20% cumulatively between 1989 and 1993; and the GFC
    where prices fell by 15% between January 2008 and May 2009.&nbsp;&nbsp;</p>
<p>&nbsp;</p>
<h2><strong>House price crashes have been rare in the UK</strong></h2><iframe src="https://flo.uri.sh/visualisation/11645505/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;text-align:center;" 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>In the early 90s, inflation was high (like today) and GDP was low and falling into negative territory (like today). But, a key differentiator was that unemployment was extremely high at circa 10% in the early 1990s &ndash; today it is at a record low
    of 3.5%. And while unemployment is expected to rise in the coming 18 months, it is expected to hit 4.9%, below the average of 6.7% since 1971 and the past 10-year average of circa 5.2%.&nbsp;</p>
<p>Meanwhile, the GFC was fundamentally a credit crisis built on poor lending practices through the early 2000s which saw people with poor credit history and no equity lent sums of money they could ill-afford to repay. Ultimately the &lsquo;house of cards&rsquo;
    collapsed, banks failed, millions lost their jobs and people were forced to walk away from mortgages they could never afford in the first place.</p>
<p>In the period since, lending practices have been tightened significantly &ndash; and the housing market is now built upon much stronger foundations.</p>
<h2><strong>Absence of distress</strong></h2>
<p>JLL analysis of the Bank of England Mortgage and Lending Report found that 62% of the UK&rsquo;s 8.4m mortgaged owner occupier households have at least 25% equity in their house. Another 34% have between 10-25% equity and 4% have between 5% and 10% equity.</p>
<p>Just 0.2% or circa 17,000 owner occupied households in the UK have less than 5% equity &ndash; and, statistically at least, there are no households with zero equity. Meanwhile, more than 95% of the circa 3m UK buy to let landlords who own with a mortgage,
    own at least 20% in their property.</p>
<h2><strong>Mortgage affordability</strong></h2>
<p>But ultimately the amount of equity the UK&rsquo;s homeowners possess only tells half of the story. An era of cheap borrowing is ending and mortgage affordability is about to become squeezed. However, mortgaged households in the UK have the highest incomes
    by tenure &ndash; averaging &pound;80,000 per annum. Before the recent rise in UK interest rates, the average household income spent on a UK mortgage was equivalent to 18%. With the average two-year fixed rate mortgage cost having risen to circa 6%,
    that income to mortgage expenditure percentage has risen to circa 27% - the level it was around the time of the Global Financial Crisis. And if mortgage rates hit 7%, the average household income to mortgage cost ratio would hit 30% - the rate it
    was in the early 1990s. But merely spending 30% of a household income on housing costs is not a reason to assume a collapse into distress. With low unemployment and the highest average incomes, the UK&rsquo;s mortgaged households have a more stable
    financial footing than the GFC or the early 1990s recession.</p>
<p>The vast majority should be able to ride out a squeeze on their household incomes avoiding the need to sell their home to make ends meet. But it will be a further extension of the current cost of living crisis.</p>
<p>Circa 1.1m households were on the current Standard Variable Rate coming into this recent rate rise. Another 1.2m households will come to the end of their fixed term over the next year. JLL calculates that those 2.3m households combined will be spending
    an additional &pound;8bn on mortgages by Q4 2023. This could ease some of the current high inflation, but it could also hamper GDP growth. The customers spending that extra on their mortgage would perhaps most likely be transferring that from their
    previous savings/investment allocations or from their typical discretionary spend on food, leisure and entertainment.</p>
<h2><strong>Low repossessions</strong></h2>
<p>Furthermore, banks currently have a low appetite for repossessions. In the early 1990s, banks repossessed circa 100,000 homes per annum. In the GFC the rate was about 50,000 per annum. Currently there are about 4,000 repossessions per annum which out
    of the UK&rsquo;s circa 11m mortgage properties represents a rate of about 0.04% per year. It takes two years to repossess a home &ndash; and in the current cost of living crisis, it could be a difficult public profile position to be seen to be adopting
    a repossession strategy. However, banks are a regulated entity so they cannot turn a blind eye to customer defaults. But there are other options that can be explored such as tracker rates or interest only periods and it is highly likely banks will
    exhaust all these options before pursuing a route of foreclosure.</p>
<h2><strong>Opportunistic buyers</strong></h2>
<p>Ultimately, we expect that there will be far less distress in the market as there was in previous crashes &ndash; as long as there is no sharp rise in unemployment.</p>
<p>But JLL predicts there will be a steep fall in UK housing transactions.</p>
<p>The number of First Time Buyers (FTBs) before the GFC typically totalled 400,000 per annum out of a total of circa 1.5m annual transactions.</p>
<p>Post GFC, FTBs fell to 325,000 and total transactions to 1.2m. JLL predicts there will now be circa 200,000 viable FTBs with sentiment among aspiring homeowners taking a hit, mortgage affordability becoming stretched to new homeowners and the ending of
    help to buy, which typically helped circa 50,000 FTBs onto the ladder per annum. This cocktail of transactional headwinds will see overall transactions fall to circa 1m in 2023.</p>
<p>The transactions that do occur will be dominated by slightly more motivated sellers (but not financially distressed) faced with a higher proportion of &lsquo;opportunistic&rsquo; buyers (such as cash buyers who will account for about 25% of all transactions,
    up from the current 18%). These opportunistic buyers will not expect to pay asking price. But the vendors who are not distressed will only accept a fall in values to a certain level &ndash; ie more of a discount than a fully blown correction and certainly
    not a crash.<strong></strong></p>
<h2><strong>Sluggish market</strong></h2>
<p>This dynamic will create a sluggish market in which buyers and vendors haggle over price and ultimately less transactional activity occurs with the supply of new homes for sale gradually becoming constrained.&nbsp;</p>
<p>Against this backdrop, JLL is forecasting that UK house prices will fall in value in 2023 by 6% which equates to an average discount of &pound;17,500 from the average UK house price of circa &pound;290,000.</p>
<p>Of course, as in any market, there will be winners and losers. Not all types of home, cities or regions will be impacted to same level.</p>
<p>On a regional level JLL&rsquo;s forecasts falls ranging from circa 4% across Greater London to around 8% in Wales, the North East and Yorkshire &amp; the Humber.</p>
<h2><strong>But transactions are forecast to fall sharply with price falls to follow</strong></h2><iframe src="https://flo.uri.sh/story/1729166/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;text-align:center;" 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><strong><br />Falling supply</strong></h2>
<p>However, in many of the housing supply constrained UK city centres, where there is a greater concentration of equity rich buyers, price growth is still expected.</p>
<p>Ultimately new housing supply is expected to fall even further behind target as a result of the tightening market conditions.</p>
<p>JLL forecasts that there will be a national shortfall of 610,000 homes over the next 5 years alone &ndash; up from JLL&rsquo;s previous expectations for an already stark shortfall of 500,000 homes. In London private new home starts are forecast to average
    circa 16,000 per annum &ndash; well below the Greater London Authority target for 52,000 new homes per annum.</p>
<h2><strong>And UK housing supply will continue to fall well short of targets</strong></h2><iframe src="https://flo.uri.sh/story/1729214/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:600px;text-align:center;" 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><strong><br />Rental market</strong></h2>
<p>The current supply demand imbalance across the UK rental market looks set to endure as fewer households move across into owner occupation and demand for rental properties increases further.</p>
<p>We expect that prospective buyers, as well as those who would under normal circumstances have transacted under Help to Buy, will remain in the rental market. This adds further fuel to an already constrained rental market and will, we expect, mean the
    supply demand imbalance and resulting rental growth will continue. Rental growth is expected to be particularly strong at the front end of the five-year period before falling back in line with historic norms of circa 2% - 3% as inflation is brought
    back under control.</p>
<p>The outlook for investors is mixed. Demand for rental properties looks set to continue, and forecasts of rising rents and falling prices suggest we could see a rise in yields across the board. But the cost to service debt will remain a key issue for more
    highly indebted landlords.</p>
<p>The purpose-built UK BTR sector is expected to outperform the wider UK rental market in terms of rental value growth.</p>
<h2><strong>Economic Forecasts</strong></h2><iframe src="https://flo.uri.sh/visualisation/11646570/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:400px;text-align:center;" 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><br /><br /></p><iframe src="https://flo.uri.sh/visualisation/11646658/embed" title="Interactive or visual content" class="flourish-embed-iframe" frameborder="0" scrolling="no" style="width:100%;height:250px;text-align:center;" 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><strong><br />Forecasts</strong></h2>
<p>
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            margin-right: calc(var(--bs-gutter-x) * -.5);
            margin-left: calc(var(--bs-gutter-x) * -.5);
        }

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            height: 100px;
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</p>
<section>
    <div class="row">
        
        <div class="column-four height-100">
            <div style="max-width:540px;">
                <h2><strong>UK House Price Growth (%pa)</strong></h2><img src="https://olmresi-sg-prod.jll.com/images/default-source/agency/picture3c661fa16-e344-4166-b880-888d9a918512.png?Status=Master&amp;sfvrsn=69cedcd0_1" sf-size="100" alt="" /></div>
            <div style="max-width:540px;">
                <div>
                    <table class="table table-borderless k-table" align="center">
                        <tbody>
                            <tr>
                                <td style="min-width:50px;width:20%;text-align:center;">2023</td>
                                <td style="min-width:50px;width:20%;text-align:center;">2024</td>
                                <td style="min-width:50px;width:20%;text-align:center;">2025</td>
                                <td style="min-width:50px;width:20%;text-align:center;">2026</td>
                                <td style="min-width:50px;width:20%;text-align:center;">2027</td>
                            </tr>
                            <tr>
                                <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">-6</td>
                                <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">1</td>
                                <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">4</td>
                                <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">5</td>
                                <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">5</td>
                            </tr>
                        </tbody>
                    </table>
                    <h2><strong>Cumulative Growth</strong></h2>
                    <p><strong>8.9%</strong></p>
                </div>
            </div>
        </div>
        

        <div class="column-four height-100">
            <div style="max-width:540px;">
                <h2 style="color:black;"><strong>UK Rental Value Growth (%pa)</strong></h2><img src="https://olmresi-sg-prod.jll.com/images/default-source/agency/picture2a3722ef1-673e-4ce1-bb95-44b6dae7a33a.png?Status=Master&amp;sfvrsn=cdbed46_1" sf-size="100" alt="" /></div>
            <div style="max-width:540px;">
                <table class="table table-borderless k-table" align="center">
                    <tbody>
                        <tr>
                            <td style="min-width:50px;width:20%;text-align:center;">2023</td>
                            <td style="min-width:50px;width:20%;text-align:center;">2024</td>
                            <td style="min-width:50px;width:20%;text-align:center;">2025</td>
                            <td style="min-width:50px;width:20%;text-align:center;">2026</td>
                            <td style="min-width:50px;width:20%;text-align:center;">2027</td>
                        </tr>
                        <tr>
                            <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">4</td>
                            <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">3.5</td>
                            <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">2.5</td>
                            <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">2.5</td>
                            <td style="min-width:50px;width:20%;font-size:24px;font-weight:600;text-align:center;">2.5</td>
                        </tr>
                    </tbody>
                </table>
                <h2><strong>Cumulative Growth</strong></h2>
                <p><strong>15.9%</strong></p>
            </div>
        </div>
    </div>
</section>
<p><strong><em><sup><br />Forecast disclaimer -&nbsp;</sup></em></strong><em><sup>Forecasting is a complex task at the best of times, but with so many moving parts making predictions in the past six months has been made all the more difficult. As always, we at JLL will continue to revisit our forecasts on a regular basis.</sup><strong></strong></em></p>
<p><sup>Disclaimer: &copy; 2022 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>

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