<article class="rba-rate-rise-content" data-sf-ec-immutable="">
 <div class="article-body">
 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.
 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.
 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.
 <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>
 </div>
 </div>
</article>
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Reserve Bank of Australia Raises Cash Rate to 4.10%

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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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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;
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634617/resi/gb/Articles/Images/Roundup-Mar6-Chart1.jpg" />
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.
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.

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;
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634617/resi/gb/Articles/Images/Roundup-Mar6-Chart2.jpg" />
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. 
&nbsp;
Housing market
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. 
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. 
In other news
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).
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. 
In case you missed it
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>. 
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. 
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.

Residential Roundup - 6 March

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<article class="melbourne-residential-content" data-sf-ec-immutable=""><div class="article-body">Melbourne's residential market is accelerating out of the pit lane with championship-winning momentum building across the city.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.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.<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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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.
The centrepiece of these reforms is a cap on ground rents at &pound;250 annually from late 2028, dropping to a nominal peppercorn rate after 40 years. For many leaseholders currently facing escalating ground rents &ndash; particularly those trapped by
 doubling clauses &ndash; 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.
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 &pound;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.
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.
<h2>The End of New Leases</h2>
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.
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 &ndash; 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&rsquo;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.

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 &lsquo;permitted leases&rsquo; which looks to include build-to-rent schemes,
 purpose-built student accommodation and social housing.
<h2>Conversion of Existing Leaseholds</h2>
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.
<h2>Implications </h2>
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.
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.
For lenders, the transition period may also cause legal and valuation headaches. The removal of &ldquo;marriage value&rdquo; 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.
<h2>Timeline</h2>
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.
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.
<h2>JLL Research</h2>
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.
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.

Implications of Leasehold Reform

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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, too. 
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. 
UK economy
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. 
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. 
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;
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634352/resi/gb/Articles/Images/Roundup-Feb13-Chart2.jpg" />
Caution around the labour market
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.
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.
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.
UK investment
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. 
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.
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634352/resi/gb/Articles/Images/Roundup-Feb13-Chart1.jpg" />
Affordability at a decade high
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. 
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. 
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.
Housing market
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.
JLL Research
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. 
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.

Residential Roundup - 13 February

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<article class="prime-residential-content" data-sf-ec-immutable="">
 <div class="article-body">
 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.
 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.
 <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>
 </div>
 </div>
</article>
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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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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. 
Leasehold reform
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.
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634116/resi/gb/Articles/Images/Roundup-Jan30-Chart1.jpg" />
Housing delivery &ndash; a mixed picture
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.
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.
Affordable housing clarity
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.
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;
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1776634116/resi/gb/Articles/Images/Roundup-Jan30-Chart2.jpg" />
Living update
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. 
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>
Prime Central London
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> 
JLL Research
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. 
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.

Residential Roundup - 30 January

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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.
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. 
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. 
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 <a href="https://residential.jll.co.uk/insights/news/residential-forecasts-2025">here.</a>
Market activity
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.
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1768581921/resi/gb/Articles/Images/Roundup-Jan16-Chart2.jpg" /> 
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. 
Prices
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.
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1768581921/resi/gb/Articles/Images/Roundup-Jan16-Chart1.jpg" />
Rents
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.
Mortgage market
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.
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. 
JLL Research
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. 
<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 

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

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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 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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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. 
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. 
<h2>2024 outlook</h2>
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).
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.
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1730756189/resi/gb/Articles/Images/Resi-Forecast-Chart-1.jpg" />
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. 
<h2>Lessons from the (recent) past</h2>
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. 
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;
<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1730756189/resi/gb/Articles/Images/Resi-Forecast-Chart-2.jpg" />
<h2>UK Economy</h2>
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 <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>
Source: JLL Research using Office of Budget Responsibility, Oxford Economics
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. 
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.
<h2>Market activity</h2>
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 <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>
Source: JLL Research, Experian
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. 
<h2 style="text-align:left;">Sales price forecasts</h2>
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 <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>
Source: JLL Research 
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). 
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. 
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; 
<h2 style="text-align:left;">Rental forecasts</h2>
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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>
Source: JLL Research 
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. 
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. 
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. 
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; 
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.
<h2 style="text-align:left;">What to watch</h2>
<ul>
 <li style="text-align:left;">EPC C by 2030 &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. </li>
 <li style="text-align:left;">Renters Right Bill &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. </li>
 <li style="text-align:left;">Buyer incentives &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. </li>
 <li style="text-align:left;">Rates &ndash; A more rapid fall in mortgage rates could mean higher value markets see stronger growth earlier. </li>
 <li style="text-align:left;">Housebuilding &ndash; 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. </li>
 <li style="text-align:left;">International buyers and prime London &ndash; 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

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.

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.

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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.
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.
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.
So what was in the budget for housing? 
<h2>UK economy on the path to recovery</h2>
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. 
<h2>Stamp Duty Land Tax (SDLT)</h2>
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. 
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%. 
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.
<h2>Capital Gains Tax (CGT)</h2>
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;
<h2>Affordable housing</h2>
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.
<h2>Right to Buy</h2>
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. 
<h2>Inheritance tax (IHT)</h2>
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. 
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%. 
<h2>Housing supply</h2>
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. 
<h2>Non-doms</h2>
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.
<h2>What we missed</h2>
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. 
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;

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.

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.

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But as the removal vans manoeuvre into No. 10, many in the industry will be thinking about the housing market and what the incoming Labour government will bring. Of course, housing was high on the agenda in the run up to the election, but the vagaries
 of the manifesto will now need to make way for greater clarity. 
The new Prime Minister had previously committed to turbocharging the housing market from &ldquo;day one&rdquo;. Realistically, we might be waiting a few days longer to find out Sir Keir&rsquo;s plans. But those close to the top have signalled an announcement
 could be a matter of a few weeks rather than a few months away. 
They&rsquo;ll need to pull their socks up as building 1.5 million homes over the next parliament will be a Herculean task. The main plans touted so far have been a recruitment drive for planners, with the intention to recruit 300 additional planning officers
 to ease bottlenecks and get Britain building. Undoubtedly a recognition of the challenges in the planning process, in practice this is the equivalent of less than one planner per planning authority and may not be the game changer we really need (a
 step in the right direction though). 
The term grey belt is also likely to enter the vernacular as Labour attempt to make developing on the greenbelt more palatable (their landslide victory and corresponding majority will help here).
Plans are afoot, too, for encouraging first-time buyer activity through further promotion of a mortgage guarantee scheme. However, the temporary increase in the first-time buyers stamp duty threshold (from &pound;300k to &pound;425k) won&rsquo;t be extended
 under Labour &ndash; although this mostly affects higher value markets.&nbsp; 
Before we delve too deeply into what-ifs we&rsquo;ll need to wait and see what emerges in the coming weeks. Until then, let&rsquo;s look at what the new government are inheriting:
<h2>The economy</h2>
Whisper it quietly, but things might not be quite as bad as we thought. The new Labour government aren&rsquo;t inheriting an economy in rude health, but quarterly GDP growth for Q1 was revised up in June to 0.7% (from 0.6%), putting GDP 0.3% higher than
 it was a year earlier in Q1. 
With growth revised up, expectations of economic growth at sub 1% in 2024 may be looking conservative. Oxford Economics expect 0.9% and consensus forecasters 0.5% this year, but we could well see these figures creep up as we move through the summer. 
Despite CPI hitting the 2% target rate, stubborn services inflation has thrown some cold water on the prospect of multiple rate cuts this year.&nbsp; But we still expect the bank rate will be cut before the year end, meaning more favourable mortgage rates,
 which are already starting to creep into the market, continue to emerge in the second half of the year.<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1720173441/resi/gb/Articles/Images/JLL-house-prices-labour.png" />
<h2>House prices</h2>
House prices edged up in June, 0.2% higher month-on-month and 1.5% higher than they were at the same point a year ago. The latest figures from Nationwide show London was the only region in southern England where prices have risen in the last 12 months,
 up 1.6%. East Anglia saw the most significant annual fall at -1.8% with the North West and Northern Ireland both recording annual increases of 4.1% in Q2 2024. 
House prices have risen 59% since Labour were last in power back in 2010. They are up 68% since they last won an election back in 2005 and up 353% since the last won an election in opposition back in 1997. In 14 years under the Conservatives (2010 to
 2024) prices have risen by 57%, versus 191% in the 13 years under Labour (1997-2010) 
<h2>Activity</h2>
Mortgage approvals for house purchase continue to hover around the 60,000 mark, around 10,000 (or 19%) higher than they were a year ago. Despite rising off a low base, activity remains around 15% down on long-run norms. 
The number of transactions has risen too so far this year.&nbsp; The latest May figures show an estimated 91,660 sales, 24% (or almost 18,000) higher than volumes in May last year and just 2% shy of the 2015 to 2019 average.
The latest S&amp;P Global Construction Purchasing Managers&rsquo; Index (PMI) was released the day we went to the polls. The UK construction sector remained in growth territory for the fourth consecutive month in June, albeit dipping slightly month-on-month.
 Growth was led by the commercial sector, with housing, which had moved into positive territory for the first time in 19 months in May, dropping back in June.<img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1720173441/resi/gb/Articles/Images/JLL-rental-growth-price-growth.png" />
<h2>Rents</h2>
As we enter the busy summer market for lettings, prices achieved on new lets, according to the latest June figures from Homelet, were up 6.9% nationally. London and the South West were the only regions where rents fell month-on-month but were still 4.9%
 and 3.4% higher annually. 
Rental growth rates in London have finally dropped below wage growth, meaning the rent to affordability ratio dropped from 40% in January to 38.9% in May, but it remains 10 percentage points higher than it was a decade ago. 
Results for the latest JLL Buyer and Tenant Survey highlight the challenge facing tenants, with half of the tenants surveyed spending more than 50% of their take home pay on rent each month, up from 45% in 2022.&nbsp; To read more from the latest JLL
 Buyer and Tenant Survey <a href="https://residential.jll.co.uk/insights/research/buyers-and-tenants-survey-2024">click here.</a><img src="https://res.cloudinary.com/global-cms-assets-np/image/upload/v1720173440/resi/gb/Articles/Images/JLL-rent-to-income-ratio.png" />

Residential Roundup 5 July

Residential-Roundup-5-July2[2]

The Labour Party have won more than 400 seats, giving them a comfortable majority in the 2024 general election.

The Labour Party have won more than 400 seats, giving them a comfortable majority in the 2024 general election.

Residential-Roundup-5-July2[1]

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Crossrail - May 2022

m0pq0srlwrndwqpsntpc

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