Rental prices will be 17% higher by the end of 2029 just behind the expected rise of 20% in the next five years as mortgage rates will fall and encourage a more buyers according to a property services company.

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Following the Chancellor's Budget, the firm’s forecasts have been revi9sed for the 2025- 2029 period. Despite the government's plans to boost housebuilding, a lack of supply and better competitive mortgage rates are expected to drive house prices higher over the next five years.

In particular, London house prices are projected to rise by 21.6% over this period mainly due to a shortage of new homes entering the market.

The firm forecasts that lower-value markets will initially experience stronger growth at the start of the five-year period as the interest rate cuts continue into 2026 and 2027 and higher-value markets are expected to outperform.

Although growth is anticipated to surpass inflation and wage increases over this period, the firm predicts that rising sales activity will eventually moderate the pace of growth.

Marcus Dixon, director of residential research at the firm, says: “Despite jitters in the run-up to Labour’s first Budget in 14 years, the chancellor’s announcements last week have done little to budge our headline forecasts for the residential sales and rentals markets.

“Yet challenges persist. EPC C deadlines could see landlords offloading less efficient properties or removing them from the market for retrofitting and pushing rents up further, while the Renters Right Bill could limit growth in some markets and prompt landlords to exit.