JLL forecasts “subdued” market in 2020

The housing market will remain “subdued” next year, showing only a 1% growth in average house prices, according to the latest forecast from property agency JLL.

The firm’s five-year forecast said that the market would begin the year weakly, and that “coming to terms with Brexit and the further political and economic uncertainty” would likely see low growth “linger for the first few quarters of the year.”

The firm forecast the same level of growth – 1% – in London as in the UK market as a whole.

However, JLL’s forecast said that from the end of 2021 the housing market was likely to recover, showing stronger growth of 3-4% from 2022 onwards. Over the five years, the firm said the average house price will grow by a total of 15%.

In addition, the firm said the number of house sales would recover from just 1.22 million forecast next year, to 1.36 million in 2024. This improvement will translate in to an increase in housing starts, the firm said, rising from just over 190,000 next year, to 210,000 by 2024.

The firm’s forecast said: “We expect the economic and political backdrop to the housing market will be more robust over the next five years compared to the last five. Some economic and political uncertainty will remain, especially initially.

“Despite this, we forecast notable increases in house prices, transactions and housing starts across all regions of the UK over the next five years. Indeed, the medium-term outlook for the UK housing market is remarkably positive.”

JLL’s forecast follows a similar analysis from rival Savills earlier this month, which also predicted an average national price rise of 15% in the next five years. However, Savills was much gloomier about the outlook for London, predicting falling prices this year and next, and no strong recovery until 2024.

According to latest monthly Residential Market Survey from the RICS, estate agents expect prices to fall over the next three months, but a modest rise over the year ahead.