Home values are expected to rise 8.9% cumulatively over the next five years, however before those gains can take hold, 2023 will likely deliver a property price fall of 6%, the real estate investment firm.

That’s far less of a decline than some estimates are suggesting, with “predictions from the most bearish forecasters of a 20% to 30% fall in U.K. house prices,” as a result of spiking borrowing costs, continued high inflation, the cost-of-living crisis and an impending recession, wrote Marcus Dixon, director of U.K. residential research at JLL, in the report.

But not all markets are created equal. On a regional level, JLL forecast value declines ranging from roughly 4% across greater London to around 8% in Wales, the North East of England and Yorkshire and the Humber.

Prices will, in part, be supported by a national shortage of home supply. JLL forecast that there will be a shortfall of 610,000 homes over the next five years alone.

“Ultimately, we expect that there will be far less distress in the market as there was in previous crashes—as long as there is no sharp rise in unemployment,” Mr. Dixon said.

But JLL predicts there will be a steep fall in transactions.

Those still entering the market will primarily be “slightly more motivated sellers” and “opportunistic buyers,” the report said.

Those opportunistic buyers—including cash buyers who are predicted to account for about 25% of all deals—will not expect to pay the full asking price. But on the flip side, many sellers will only be willing to discount to a certain degree.

“This dynamic will create a sluggish market in which buyers and vendors haggle over price and ultimately [results in] less transactional activity,” Mr. Dixon said.