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Bristol house prices to rise faster than UK average in next five years

JLL publishes research that shows Bristol house prices will rise an average of 3.9% per year

​BRISTOL, 9 February 2017 – Research recently published by property consultancy JLL shows that Bristol house prices are expected to rise at a faster rate than the UK average over the next five years.

JLL predicts that Bristol will experience an average year on year price rise of 3.9% between 2017 and 2021, compared with 2.5% for the rest of the UK.

Prices are expected to go up by 5% from last year in 2017, although JLL expects this year on year increase to slightly drop in subsequent years to 4% in 2018, 3% in 2019, 3.5% in 2020 and 4% in 2021.

JLL paints a similar picture for rental forecasts with prices expected to go up by a yearly average of 3.8% over the next five years in Bristol compared with a national figure of 3.3%.

Rental growth is expected to steadily increase with a year on year rise of 3% in 2017, 3.5% in 2018, 4% in 2019 and 2020 and 4.5% in 2021.

James Petherick, director of residential development at JLL in Bristol, said: “Bristol boasts one of the most active housing markets in the country. The city centre has really taken off and developers have so far risen to the challenge with some excellent schemes built and underway.”

“With appetite already high and with Bristol graduates choosing to remain in the city in increasing numbers, demand for city centre housing looks set to grow.

“We expect the key centres of Bristol and Exeter to outperform the rest of the South West in terms of house price and rental growth although Brexit will cast some doubts over longer term prospects.”

The strong housing market in the city is supported by a robust regional economy with employment in Bristol expected to grow well above the South West average. Employment growth in Bristol is forecast to be 3.9% during the next five years which equates to around 7,000 new jobs, compared with regional growth of 0.9%.

As a result, the number of households in Bristol is expected to increase by around 1,900 per year but the region is currently building new homes at a much slower rate than projected. How Bristol and the wider region tackles the housing shortfall will be crucial for both its residents and its future prosperity.

James added: “Unfortunately, there are not enough suitable city centre sites and Bristol has a particular task on its hands to deliver the housing that the growing population needs. New Government policies will help to some extent, as well as the Mayor’s drive for taller buildings, but we anticipate the housing market supply issues will continue for some time.

"However, new housing models which will help alleviate affordability issues are starting to emerge such as the Private Rented Sector (PRS) model, which is seeing entire developments being built for the rental as opposed to the sales market. Indeed Bristol, perhaps alongside Manchester, is leading this drive with several specialist PRS developments set to be delivered over the next few years.”

Bristol’s city centre lettings market is also very active with around half of homes in the city centre being rented out. Rents are on average £750 per month and £1,000 per month for a one-bedroom and two-bedroom apartment respectively. Buying an apartment in Bristol typically costs around £190,000 and £260,000 for one and two-bedroom flats respectively – an average increase of 4.6% on 2016 prices. Buying in one of the more central or exclusive developments costs considerably more.

Price increases are not just being seen in the centre. Westbury-on-Trym saw a 15.2% increase in house prices during 2016, and new locations such as Charlton Hayes have also seen a significant price hike. This is not only down to a lack of supply but also Bristol’s increasing attractiveness as a place to live.

James said: “We will continue to see considerable development activity in Bristol over the coming years with around 2,000 homes in the pipeline in the city centre and fringes. New residential quarters are likely to emerge including at the Temple Quarter Enterprise Zone around the station where the University of Bristol will build a new campus and where the new arena is planned. Overall, the prospects for the city and the wider region are very promising.”