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Jones Lang LaSalle forecasts UK house prices to rise by 1% next year

House price growth in Yorkshire anticipated to move higher from 2015

Leeds, 16 December 2012 – UK house price growth will rise by just 1% on average next year with London seeing slightly higher growth of 2% whilst Yorkshire’s housing market is expected to remain relatively weak according to research from property agents Jones Lang LaSalle.
According to its latest Residential Eye research report, on average house prices in Yorkshire will see no growth for the next two years before moving higher with a forecast growth of 1.5 % in 2015. 
Guy Ackernley, head of Jones Lang LaSalle’s Residential team in Leeds, said: “Whilst the economic recovery is forecast to be rather unbalanced it will gather pace albeit it will be some time before activity and price pressures build in housing markets outside of London and the South East.
“We expect house price growth in Yorkshire to remain quite weak during 2013 and 2014 before moving higher from 2015.  Prosperous locations, like Harrogate and York, where housing wealth is greater, coupled with employment hubs such as Leeds are all likely to fare better in the region.”
High rental demand will continue in 2013 as mortgage availability and economic conditions inhibit buyers. Jones Lang LaSalle anticipates UK rents will rise by 3% in 2013, similar to 2012.
Guy added: “The rental market in Leeds city centre has continued to be buoyant and a modest rental growth of 3%, the same as the UK average, is forecast next year.”
Whilst UK housing transactions will be severely restrained Jones Lang LaSalle expects 2013 will be an improvement on 2012 and next year will be the first time transactions top one million since 2007. From 2014, the improved economy, income security and household confidence will take time to translate in to higher household spending and house buying activity however Jones Lang LaSalle anticipates the green shots of housing market improvement should begin pushing through.
Guy concluded: “The UK housing market is faced with many challenges but we believe that a gradual shift towards a better; albeit lower growth environment will ultimately transpire.
“London usually leads the UK economic and housing marketing revival and 2014 is unlikely to be any different. Job creation will ultimately be biased towards areas where the service sector dominate: London and the South will be clear beneficiaries as will employment hot spots such as Leeds.”
Jones Lang LaSalle’s Residential Eye report also forecasts in 2013 that:  
• Development activity close to historic lows throughout Britain, despite Government incentives such as Get Britain Building. Completions in England at circa 115,000 units next year will be similar to 2012;
• The Government’s Funding for Lending Scheme provides a marginal boost to mortgage lending while the New Buy Guarantee Scheme also provides support. But mortgage funding remains a key housing market constraint;
• Although funding is a dampener on development a lack of active homebuyers is the main problem.