Market Update - August 2026

0:02Hey everyone, Rob B here with Rob Dix. This is the August market update and it's a weird month for property. August is normally a bit weird, but it's extra weird this month because if you look at the headlines, there's lots of good stuff and there's lots of bad stuff. What do you make of the month of August when it comes to property? Well, we're about to guide you through it.

0:26Welcome to the Property Podcast. Thank you for joining us. In case you don't know, we run a business that arranges more than£100m worth of property deals for our clients every year. You can find out about that at propertyhub.net slash invest. And every month here on the podcast, we round up everything that's been happening in the market that you need to know about as an investor. So let's get into it. So let's start off with everyone's favourite subject for this month's market update, which is politics, Rob. Everyone loves politics. So let's talk about politics and its impact on property because I know I'm being a bit jokey here, but it is important The government has the potential to make huge differences to our property market, to our industry.

1:04And there's been quite a lot of news when it comes to politics and property over the last month. There has. And of course, the big story of the last month is we've got a new prime minister. We've also got a new old housing secretary. Angela Rayner is back. She's back in charge of housing and local government after a 10-month break. And a flurry of news affecting property came off the back of that. Within 24 hours of Burnham taking office, Manchester councillors were covering for rent control they were saying that the new mayor of manchester should be given power to cap rents that was shut down within the week by angela rayner saying once again not going to happen rent controls nationally or locally not going to be a thing thankfully something else that was shut down quite quickly was stamp duty changes we covered on the podcast just before he became pm everything that andy burnham had said in the past about stamp duty and the reforms that he wanted to make and also wealth taxes and all of this naturally we were not the only ones who spotted this and therefore there were lots of rumors about what might happen in the budget but i think rob thankfully for the property industry he said that there will not be property tax reform as part of the budget which is a relief for all concern not because changes in themselves would be terrible but just because remember last year we had at least six months of speculation about what was going to happen in the budget which completely froze the market while everyone waited to see what's going to happen so the fact that's been taken off the table for now is pretty helpful you're right rob the speculation leading up to the last two budgets was ridiculous I think it would be fair to say it stalled the economy.

2:23So just coming out and saying no that's not going to happen I think is an encouraging sign and it will give the markets confidence. I'm all up for reform if it makes the market a better place to transact in but being vague about it and saying something might happen is not helpful at all. So certainty is a good thing. Before we move on to house prices because there's some headline grabbing stuff there I think it's worth noting that the Bank of England have had a holiday and they are not meeting in August but at the end of July they did meet and they held the rates at 3.75%. The next vote is in September so a few weeks away from that now and even though it was a split vote last time the consensus is right now that it will probably be held again in September.

3:08We will see but the markets are quite calm at the moment when it comes to interest rates and what's not as calm Rob is the noise around house prices because we'll get into our normal stuff of Nationwide and Lloyd's but Rightmove have just released this very week some headline grabbing data and the first thing that they've announced is they've revised their predictions for this year so in August they're revising their predictions for what's going to happen in the property market this year it's amazing they're going to revise it all the way to December anyway that's a whole different point but the point is that they have revised it again and now they're saying that the UK property market this year will fall by 2%, which is interesting.

3:49But what is possibly more interesting was the data that was released for August. Yeah, the right move data is pretty grim. The biggest August drop in house prices since 2018, apparently, which means that house prices are now down 1 % year on year. So you can see how they're getting to their 2 % by the end of the year figure. And the right move data can be a leading indicator for where the market is going because it's reporting on asking prices whereas the nationwide and the lloyds index lloyds renamed used to be the halifax index the first time i've seen it renamed to lloyds very exciting i'm a bit sad about that rob you're so excited i'm sad it's been 14 years we've been in the podcast it's been halifax and to see it go i don't know i feel like we should mention the moment anyway sorry carry on yeah should probably give it a proper send-off but i'm embracing the change but whatever you call it those are reporting on prices agreed at the point of a mortgage offer being issued so it's telling you something slightly different these are slightly less grim but still not great so in the july figures both indices had prices up just 0.1 across the month of july and as you'd expect by now very much a regional split in there with growth in the northeast and the northwest and falls in the southeast and london so will those right move asking price drops feed through into the nationwide and the lloyds figures in the months to come don't know maybe maybe not but it's definitely not going to be a blockbuster year, whichever way you cut it.

5:07But maybe lending could help, Rob, if we had a fresh wave of cuts. Oh, and that's exactly what we've had from Barclays, HSBC, Santander, and Coventry have all recently repriced down their mortgage offerings, which is a good sign. That's the stability that we talked about. That's the market confidence. That's the projection on future interest rates for next month. all of that combining has meant that the lenders have had a bit of confidence and trimmed their rates very recently and buy select lenders like accord and paragon have followed suit as well and they've also repriced recently so rob it changes month by month let's not now pretend that everything is marvelous we've had some minor cuts i'd prefer to have the cuts than increases so it is nice to see yeah volatility is probably the word of the year when it comes to mortgage rates So at the moment, good news.

5:57But as ever, stay close to your broker because things are moving fast and the average product is not sticking around for long at all. What is encouraging from the world of finance, though, is that buy-to-let arrears are down 26 % and repossessions are down as well. Well, there should be, Rob, with the yields everyone's getting at the moment. Well, maybe that is it. So really not much around in the way of distress at all. And that will be helped further, I'm sure, by the new surge in rents that we're seeing. So the yields that you just mentioned, Rob, well, they're set to get better because we've said that while property prices are pretty much flatlining they're going up a bit in some parts of the country but rent had been slowing down but now they're on the up again so according to homelet the average uk rent is up 4.3 percent year on year so we had the big surge of a couple of years back it'd been coming down and down and down but now we're back up to 4.3 percent growth i'm starting to feel like an old man shouting at clouds here but i've had to say it again i remember it wasn't that long ago that the average uk rent was about 750 800 pounds pretty much double that 1 ,369.

6:55It's mad how quickly this has changed. And especially if you look at areas like Manchester, Rob, where it's been reported, and I still struggle to believe this is true, but it's been reported that rents are up by 10.4 % over the last 12 months in the city centre, according to Renta Roof's quarterly report. That is huge. I mean, if that's true, even if it's off by a few percentage points, it's still massive. But that is absolutely huge. Like Manchester, people say, well, when's it going to stop? Well, it's only just got going. The numbers indicate that there's just that lack of supply. And really, really interesting, like across the whole of the UK, and we're going to touch on this in a moment, not a lot is being built right now.

7:36Not a lot is being started. So this problem could be exacerbated further with the amount of new stock coming to the market disappearing, but rent demand increasing. What's going to happen? Well, Logically, rents will continue to push up. And it's not that you can just suddenly click your fingers and start building again. Everything appears on the market. It's going to take years to ramp back up. So these numbers that we're seeing, this increase in rents that have started to tick back up again and surge in places like Manchester. I don't mean this is a blip. I think this is the start of something pushing on a bit further and would not be surprised to see it trending back upwards again.

8:11I need to issue a trigger warning at this point in the podcast because there will be listeners who are so used to the relentless negativity that we've had for the last couple of years that they just won't be able to handle some potentially good news if we just drop out on them without warning. They seem to give you a moment to steel yourself to have a sit down because there are signs of green shoots. The first of those is that according to Hamptons, landlords bought a bigger share of homes than they sold for the first time since 2019. Yes, five or six years have passed. Landlords have been relentless sellers during that time.

8:42But in June, that flipped. Landlords are net buyers again. Who would have thought that that could happen? And even one of the house builders is starting to sound positive. So Persimmon released their results. Their completions are up 13%. Their revenue was up 15%. And it was generally a very positive update. They name checked the new PM as part of that. More broadly, you're hearing people talking about a burn and bounce. Is this the beginning? Have we hit the bottom? Is this a turnaround are we seeing the return of positive vibes well i've stolen all the good stories rob because there's some bad stuff to come so i think it's probably too early to get too optimistic no but it is encouraging and it is nice to have nice news but it plays back to what i said earlier about while these builders may start to feel optimistic now it's going to take a while for things to ramp up and that's evidenced by a report from glenagan who've stated that residential construction starts are down by 46 percent year on year now i do not know if the new government is going to embrace the aggressive house building targets that they set themselves because they are now nothing but fantasy they will not be hit in the timelines that were set out absolutely not happening and actually it's gone the wrong direction but while it is negative rob what's happened it also creates a situation which is that yields will probably continue to go north more landlords will come into the market because the opportunities will start to become clearer to more people and if house prices don't move for a while as well then those yields those returns are going to continue to improve i think it's fascinating it's such a mixed bunch of news this month it's a weird month we said that at the beginning a while as somebody invests in this market or works in this market you might be thinking wowzers it's been a tough period well the green shoots are there and the fundamentals and the value is there as well value that's interesting we've got a podcast in the next few weeks that will dig into the value in the uk property market right now but i think you can make the argument rob that in certain parts of the country there's extreme value i think you can make the argument that it's setting up conditions that are very very favorable for property investors you've got terrible sentiment but you've got great numbers and returns and if you can get past the sentiment part and that is hard it's easier said than done then you can see that the numbers in play are absolutely fantastic now whether the burn and bounce happens or not and these green shoots continue to grow and flourish remains to be seen but you don't need it because the conditions right now in terms of prices versus yield are exceptional the best they've been in many many years certainly in the last decade so with that just that play itself it creates a very interesting market if the sentiment starts to improve because of the burn and bounce and these are the green shoots we've discussed then that's great for property prices maybe not great for buying opportunities but it's not going to be suddenly a property boom in the next few months it may just be that there's a bit more confidence I can't see this turning into an aggressive buying cycle, but there may be more people come to the market and maybe more competition because the numbers are just so strong.

11:52And with a slightly improving sentiment, more people might want a piece of that pie. Yeah, it's going to be really interesting. And eventually all roads lead to the same place because if rents keep going up, which it seems to be doing, and prices keep on flatlining, then eventually you're going to get into a deep value situation and people will come back into the market, probably the bigger players, and you'll have a turnaround from there. but you might get there faster if the turnaround in sentiment holds which is a big if and it's very early days and if mortgage rates get better from here rather than worse then it could happen sooner but we'll keep you updated every month through this market update and of course through property pulse our weekly newsletter if you don't get that on a friday already then just head over to propertyhub.net slash pulse sign up it's completely free you get our latest thoughts on the market and all the new stories you need to know about as an investor but that is us done for this week and we'll see you back here next thursday until then bye bye bye you