Market Update - August 2025

0:02Hey everyone, it's Rob B here with Rob D and you are listening to the Property Podcast. It's market update time. We've got big news on London, lots of stories there. Interest rates have cut, what does that mean? And really fascinating data around rentals and so much more.

0:22Welcome to the Property Podcast. In case you don't know, we run a company that buys more than£100 million worth of property every single year for our clients. You can find out about that at propertyhub.net. But today, we are bringing you up to date on everything you need to know as an investor in today's property market. And make sure you stick around to the end, because in Hub Extra, we're sharing some new tools and techniques that we've been using for property research, which have blown our minds. Well, let's start with some very positive news, Rob. And that is that the Bank of England have cut interest rates again.

0:50And now we are down at 4%. We have to remember where we've come from. Two years ago, we were at 5.25 and we could be going sub 4 very very soon of course rob unless you're a saver the majority of people will be very happy with this and it's very convenient that we're going to have a mortgage expert on in the next few weeks to discuss the impact of these interest rates but the obvious impact is that mortgages will be cheaper yeah and it's crazy how quickly this is all happening if you go and look at the bank of england chart it's like a double black diamond it's insane it went up so so so so fast and yes it hasn't been coming down so quickly but to be back down to four already suggestions of sub four before the end of the year is significant this particular announcement probably isn't going to feed through to dramatic moves in the mortgage market in the short term because it was very much expected so it will have already been priced in but generally all these changes of course are going to be big news and good news for anyone with mortgages which i think is fair to say is most of us so yes we'll bring you fully up to date on that in our mortgage episode very soon.

1:53And of course, if you are on a track of mortgage, you're very happy at the moment and with the direction of travel. And the industry is happy as well. To quote a few sources, Knight Frank, expect to see mortgages at sub 3.5 % before Christmas. I mean, if that happens, very happy days. Chesterton's not quite as bullish. They expect to see sub 4 % mortgages this year, which I think is realistic based on the direction of the travel. And Vinal Country said very similar. So, hope Knight Frank get their wish. But if the other two are right, I'd be happy for that as well, Rob. Indeed. And this positivity is being reflected in the house price data.

2:32So in June, we had slight falls. And this is probably all to do with the monkeying around with the stamp duty threshold from earlier in the year that meant transactions were brought forward. But now that seems to have worked its way through and house prices are on the up again. Not dramatically by any means, but up 0.4 % in July according to Halifax and up 0.6 % according to nationwide and that puts the annual change per nationwide at 2.4 percent so boom times are very much still not here and no particular sign of it but two and a half percent annual growth is so much stronger than the sentiment would make you believe you'd think the house prices were cratering based on the general mood of the market but nope still edging up i'll tell you what is not edging up though as we move on to our next story is the amount of properties being built and we have to remember that this government and to be very fair every previous government during every election debate has promised us a huge amount of homes to be built so how are we getting on in our capital city probably the area where we need the most homes well not very well because according to a new story in construction inquirer yes we do dig deep for these new stories new home registrations have slumped by 59 percent in london so that's the amount of properties that have been registered compared to this time last year is down by 59%.

3:49It should be growing by that number. That's what we need, but it's fallen by that number. Across the UK as a whole, a modest 4%. But what we have to remember, and something we've talked about on the podcast before, and I know Rob, you've talked about this quite strongly, is that we need to be building in the right areas. We talk about supply and demand, but if we just went and built a million properties in the middle of the countryside, that wouldn't really help. You need to be building in the areas where people are trying and wanting to live. And London clearly is a place that is desperate for more supply.

4:21But with conditions for buildings so difficult, it means that the developers don't have the confidence to go and build. Because in London in particular, a lot of these buildings need to be high rise because of the lack of supply. The challenge that these developers have got is something called Gateway, in particular Gateway 2, which has been an absolute mess. and again we've talked about this in the podcast before but in short it's meant that high-rise developments across the UK have come to a ground in hope very little is being built compared to previous years because of this new legislation that was rushed through by the previous government and it still hasn't been retracted yet or be reformed and that needs to happen now there is noise that that will happen which is positive but what we are not seeing is high-rise buildings going up in London and across the UK, which is why the London number is so exaggerated, because you're more likely to build houses and low-rise across the country, which is why we've got a modest 4%.

5:16But the 59 % down in London is largely in part, not solely, but largely in part, to the gateway issues that the industry is suffering with right now. That's right. And the other region where there was a big slump was the northwestern Merseyside, because of course, in there, you've got Manchester City Centre and you've got Liverpool, both high-rise markets registrations there down 18 percent and when you look at the uk as a whole by property type registrations for flats are down 23 percent year on year whereas terrace houses registrations are up 33 so you can clearly see where they can developers are pivoting from high rise to terrace houses and that's lovely terrace houses are very nice but if you really want to build a lot which is what the government supposedly wants to do then you need some density and of course in city centre markets developers can't suddenly go oh actually we'll build a load of terraced houses in the city centre it's not going to happen so what they're doing instead is building nothing so Rob this is something that you're talking to developers about all the time but it feels to me like it's made very little impact in the wider media and public consciousness people probably don't really know that this is a thing but when house building targets are inevitably missed by country mile this will be a big factor and what can you do about it well we had to go we put an episode out a few weeks ago which was very humbly called how we'd fix the property market yes two podcasters decided they can fix the entire uk property market we had a crack at it anyway and actually jokes aside i think we come up with some really good stuff there are solutions to the challenges that exist within the property industry and this is beyond buy to let there's challenges across the industry but it's having the bravery and the conviction to do it And this government and previous governments just don't seem to have that drive.

6:58They play safe, because playing safe, unfortunately, is what politicians are incentivised to do. But we need a bit of bravery, and there's lots of things that need fixing. But even if we just do some of the low-hanging fruit stuff with property, it'd make a huge difference. So if you're curious on our views on how we tackle this issue and others, don't listen to that podcast we brought out a few weeks ago. Let's move on now to a piece of research from Savills, which is summarising the research of the English private landlord survey which apparently is the gold standard of this kind of research into the private rented sector you often see oh surveys say that 98 % of landlords do this and it turns out it was like they asked 200 people but this is a legitimate survey and there's some really interesting things in there the one that really stands out we knew it but when you see the scale of it it really is quite incredible just how small scale most landlords are 45 % of landlords own just one property 37 % own two to four and the amount of profit made per landlord, not even per property, but per landlord is so, so small.

7:55Half of landlords make a profit of less than£10 ,000 per year. So I think it's worth reminding yourself every so often that what we're talking about on this podcast, the kind of people who are listening to this podcast, the way in which you are thinking about property is so different from what most people historically have done. It's changing. But historically, property, for better or worse, has been very small scale, has been hobbyist. And that's very much how the majority of the market still is. And so when you see how most landlords are feeling, how most landlords are reacting, all this stuff, a lot of that just won't apply to you because the scale at which you are intending to operate at, even if you're not right now, and the way in which you're approaching it is completely different.

8:35Incredibly, also in this report was the stat that only 35 % of rented homes have a mortgage. And the reason why that's incredible to us is that we talk about the power of leverage and how important it is. and I'd go as far to say that actually if you're not going to leverage I wouldn't do buy to let like I think it's that important and I know Rob you agree so I don't understand how that stat is that stat that's what Savills are reporting but it shows that there's a lot of landlords there that potentially need educating yes of course for some people it will be absolutely right to have no mortgages I get that I do and actually I'm a bit of a hypocrite some of my portfolio a small proportion of it the properties have no mortgage on as well but overall i would expect to see the majority of landlords have a mortgage i would expect to see it maybe the other way around that only 30 odd percent don't have a mortgage and that from an investment point of view would be the sort of sensible level i'd expect to see it at so the leverage is so important we talk about it over and over again on the podcast there's some episodes that we've put out on that topic We'll link to those in the show notes, and I'm sure we'll cover it again in the coming weeks and months.

9:51But it's so important, and that stat really is incredible. And sticking with rents, Rob, another incredible stat, this time from the DPS, the Deposit Protection Service, is the average length of tenancy has now passed 1 ,000 days. And this is just great data. I love it when we dig out these bits and pieces, because they've also given what it was in 2021, 22, and so on. And it's just grown year on year. And for me, I don't know what you think, but for me, that shows the maturity of the sector because renting now is more of a social norm. And there's more work to be done there, but it is getting that way and people feel more comfortable about renting.

10:32It's not just something you do when you're young before you buy your own place. It's a social norm to do. maybe not quite the levels of Europe, but certainly things have changed over the last five years, and that is reflected in the data. Yeah, clearly landlords not just kicking people out on a whim whenever they feel like it. Oh, six months have gone by, I can get higher rent, off you go, next one in. No, because the average length of tenancy is, well, clearly is over three years, and that's 40 % longer than it was just four years ago, which is pretty amazing stuff. You see other data sources around this, but this is actual DPS tenancy deposit protection data, so you know that this is pretty accurate.

11:06But you know what? It's just as well that landlords aren't kicking out tenants on a whim because if you try, you're not going to be able to. The average tenancy is probably going to get longer purely because the court system is in such a shambles. This is a parliamentary committee report that has looked into the county court system and that's the part of the courts that includes if you're going through eviction and needs to be a court hearing, it will be in the county court. They do not have anything pleasant to say about it at all. They point out that there's been a 10-year-long digital transformation programme where basically nothing has happened everything's still done on paper that is shipped around the place delays are now getting worse and worse it's taking pretty much a year for any cases to come to trial and worse yet there are rat infestations in many county courts but from a point of view of property investing this is of course significant because when the renter's rights bill becomes law many many more property cases are also going to contribute to the county courts being clogged up so that is why as we have said in the past and we're going to keep on saying and we're going to do more and more episodes on this about how to do this in the future because it's so important you've got to get your tenant selection right it's always been important but it's only going to get more important you do not want to be going through this system now or in the future so when that bill finally becomes law probably in the next couple of months we'll have multiple episodes about how to handle that to make sure you're prepared also there'll be a future episode on me living through this experience the courts failing and the system not working and that and plus the changes that have been announced mean that i've completely pivoted on my decision to use insurance now and ongoing.

12:32All the money I saved by not having insurance over the many, many years has been wiped out in this one case that is yet to be concluded, unfortunately, because the system is the way it is. But when the time is right, when it's all done, I will discuss it and share my experience of going through the UK court system and being manipulated in a way that will probably shock you. But that's a story to tell on another day. a story to tell this week though is the mixed market in london and prime london is falling we touched on this in a podcast a few weeks ago but it's really a tale of two cities the property market in london right now because there are big falls in prime london but there are also some gains in areas that offer more value and i know people will probably scoff about where's the value in london but there is some value we have to remember that in london prices have been falling in real terms at least pretty much every year for the last 10 years and that has made our contrarian senses go a little and we've started as we again mentioned on the podcast to look at london neither of us have made any moves and we are not ready to make an endorsement to invest but it is interesting when a market is unloved as much as it is in london and the media will absolutely talk about prices falling right now because the sexy stuff the prime stuff is and I've seen in my network personally distressed prime assets where people are trying to get rid.

14:01I've heard on the grapevine as well that the market is really suffering. And a news report from Property Investor today, Rob, has echoed that sellers in prime central London are, to quote, accepting losses. That's right. It seems to be the case that there's no particular belief that the market is going to bounce back anytime soon. So lots of sellers deciding, well, it is what it is. It's just time to accept it now and get out. Quite a few in prime central London, I'm sure leaving the country as well and that's going to be a big factor behind it. But according to the person quoted in this article, no blood on the streets.

14:31So not yet time to go and snap up as much of Belgravia as you can because it's not a screaming bargain. Just yet anyway. And finally Rob, the merging of the real life and thick of it is pretty much complete in a story from last week where the homelessness minister has quit over rent hike claims according to the BBC. Apparently she was renting out a property. She asked the tenants to leave at the end of their term claiming that she was going to sell the property. A few weeks later, marketing it again for£700 a month more, which obviously is not the best look. Maybe it's a purely selfless move. She's just demonstrating she's making sure there's a real life case of the need for the legislation that her party is bringing forward to make sure that no one can do this.

15:07Because at the moment, that is legal. It will not be when the Renters Rights Bill comes in. So no breaking of the law, but very much not a good look, especially from the Homelessness Minister, which is why she's stepped down. Before we wrap up, it's time for Hub Extra, the part of the show where we just give you a bit more value before we get out we don't end on a low we don't peter out we give you some extreme value or we try to at least and this week we want to bring your attention to chat gpt no stick with us it's just been updated and chat gpt 5 has been released rob and i both pay for the premium version but it's my understanding that this actually is available for everyone chat gpt 5 so even if you have a free account you can use this and i have to say it's a huge upgrade on what was there before for general use.

15:51The level of research it goes into is fantastic. I'll give you a couple of examples. First of all, I was doing some research on a development that was completed in the late 90s, 1999 to be precise, and I wanted to find a plan, any marketing material for what would have existed in the 90s. Now that type of stuff wasn't always put on the internet and if you'd used the previous version of chat gbt or google you would have quickly hit a dead end but what chat gbt 5 is very good at doing is persisting and offering different solutions to try and find a way to get the information that you want and it's just kept persisting and persisting even offered to go and look on the way back machine which is like a history of the internet just really clever things that i wouldn't have thought about doing but chat gbt 5 has done for me.

16:41And that's a property example, but there's so many other user cases. The voice on ChatGBT, five, even four was incredible, but five is exceptional. You can give a guide and some prompts on how you wanted to help you, but some people use it for counseling. Some people use it for mentoring. If you want a property mentor, it's free. And I bet you they're probably better than a lot of those ones that charge for it elsewhere. You can have a business mentor. I've used it to learn, so language learning, excellent for. It feels like such a brilliant upgrade it was excellent before it really was but it just feels like even more useful if that's possible than before and i suppose rob what we're doing is telling people to get on it and use it and be creative of how you use it you're only limited in your thinking really of what you can do because if you ask good questions and can think of good prompts and good ideas of how to use it once you have those chat gbt5 will do the rest that's right the pace at which it's getting better is just crazy and while we're talking about it i also need to give a shout out to google which is not being left behind and i always default to chat gpt he's clawed a bit i tend to forget about gemini from google but gemini's got loads better recently as well and the limits to what you can do just with a regular google account without paying are really pretty high so i don't know if in chat gpt free plan you can use their deep research tool but with gemini you can the deep research is really good.

18:05So if you want to do research into an area, for example, for property investment purposes, perfect for that. I've done that. And it's also got a new guided learning mode, which I only tried out for the first time yesterday. I don't know exactly which topics it can cover, but to test it out, I just got it to teach me a bit of algebra. And the way that it teaches is so, so good. You can obviously approximate the same thing just in a regular chat, but this mode seemed far better. So if it covers things like investment principle, economics, anything like that, it's such a great way to learn. So in this Hub Extra world, we're not surfacing incredible new niche tools or anything.

18:37We're just saying keep up with what the main models, the main companies are doing, and make sure you keep refreshing yourself with what's possible and pushing it and using it to its full potential because it's just unbelievable what you can do. It is. And make sure you're using us to your full potential. We put our content in all different ways. Subscribe to our YouTube channel. You really are missing out if you've not done that. Check out Property Pulse, brings you up to speed on what is happening in the property market each and every week. You really, really should be reading that newsletter if you like these type of episodes.

19:08That's propertyhub.net forward slash pulse. And of course, we have the podcast, which we'll be back with same time, same place next week. So until then, take care, have fun. Bye-bye. Bye-bye.