JLL 5 year forecast - major cities

Although a house price fall look pretty much baked in for 2023, the pain won't be equally spread. The major city centres look like being a particularly bright spot.

The last two years have seen a 20% plus increase in house prices, driven by the pandemic race for space and reinforced by tax breaks. However, this UK average figure masks significant differences between town and country. Many rural and coastal areas saw prices rise faster than the average, while city properties rose at a much slower pace. That process has already started to reverse and looks set to continue.

UK city centres

Source: JLL Research

The regional city centres are expected to outperform. In particular London, Manchester and Birmingham are forecast to see property prices rise by almost 20% over the next five years. 

Across London, the long running shortage of housing will support property prices. JLL expects that just 83,000 new homes will be started over the next 5 years. The Greater London Authority says it needs 260,000.

Manchester and Birmingham will see similar price growth to London. Both city centre economies are growing rapidly, with barely a month going by without a major organisation announcing relocation or expansion. While London remains the biggest draw for new graduates, the regional cities now provide a very strong alternative, offering good career opportunities and a lower cost of living,