House prices are set to drop by the end of 2021 before growing again the following year, according to JLL’s UK and London Residential Forecast.

House prices will continue to remain strong until the end of the ongoing stamp duty holiday. Following this, house prices are expected to decrease and finish at -1.5% by the end of 2021.

Housing transactions are expected to remain well below pre-Covid level of £1.25m equating to less to 700,000 less transactions between 2020 and 2022.

Rental values are expected to drop by 1% in 2021, however by 2025 rents will increase by 10% due to increased housing demand.

The housing market is set to recover by mid-2022, reaching pre-Covid levels. By 2025, JLL predicted UK house prices will have risen by 18%, averaging at a 3% price growth from 2020.

JLL head of UK living research Nick Whitten said: “The global pandemic has left the housing market facing some headwinds in the short term, which will put some downward pressure on house prices. However, it is also accelerating a new trend in which our homes are becoming the centre of our lives once again. We may be changing the way we work and the way we play, but the one certainty remains - that we need places to live – and this is something that is going to have a huge effect on the market as buyers, and renters alike, change their living requirements.”