Market Update - December 2025

0:02Hey everyone, it's Rob B here with Rob D and you are listening to The Property Podcast. It is the final market update of the year. We've got the fallout from the budget, we've got a collapse in asking prices, and we share what we think is the biggest news story of the last month, and it hasn't even made the news.

0:23Yes, welcome to The Property Podcast. Thank you for joining us. In case you didn't know, we run a company that buys more than£100 million worth of property for our clients every year. You can find out about that at propertyhub.net slash invest. And as always, we keep up with the property news so you don't have to, and we can summarise it all neatly for you once a month. So let's get into it. So let's kick off with our first story, which comes courtesy of Rightmove, and that is that asking prices fell by 1.8 % in November. If it sounds like quite a lot for one month. It's because it is. It was more than was expected, especially for this time of year.

0:57And it doesn't really come as any surprise because of the sentiment and the budget and all the noise around that. But also Rightmove have reported that we have a decade high number of homes for sale, which did actually surprise me. I didn't realize so many people were testing the market. So there's a lot of people trying to sell, not really moving their asking prices, but it seems, Rob, in the last month that there's been a bit of movement there and people are being a little more realistic about what they can achieve. It seems like it. It's very UK property, isn't it? People get very tied to their price.

1:29And if they can't get their price, unless they really have to sell, they just won't sell. And so there's always going to be people who need to for reasons of work or whatever. But there are many, many more people who are exploring it, put it on the market. But if they're not getting the offers they want, they just won't sell. And Rightmove shows that it's homes above half a million pounds that have most affected this year agreed levels of sales have dropped eight percent year on year why is that well 500 000 pounds was the magic number in all the budget rumors that's the point at which new property taxes might have kicked in as it turned out they didn't but it was enough to cool that market and the report points to two things that it says the market needs in order to kick on one is further interest rate cuts the other is less uncertainty about taxes and it's possible Rob that going into the end of the year, start of next year, we may get both those things.

2:17We may and we'll look ahead towards the end of the podcast, which doesn't sound like it should be like that, but that's what we'll do. Because we want to discuss the numbers in from HomeTrack, their house price index, and they have the property market up this year so far by 1.3%, which is a bit nothing-y, which is a bit of a theme of this year. But what's really interesting, as always, is the regional breakdown because HomeTrack helpfully give us numbers from across the regions and the cities in the UK. And Rob, listeners of this podcast will win no prizes for guessing the regions that have done the worst this year, because it's London at small falls of 0.1%, the southeast, the same number, and the southwest, an area we often reference as not a great area for buy to let, down by 0.2%.

3:05And the best areas, again, there's no prizes, Rob, but you can reveal them. Well, yeah, prepare to not fall off your seat as we hear that the northwest is the top performing area with 2.9 % growth, followed by Scotland and the northeast. So the pattern is not surprising, but it is still pretty striking when you see that reasonable level of growth in one area and actual falls in the south. And remember, none of this is factoring in inflation. As we've spoken about before, when we take the very, very low growth in the south over the last couple of years and then adjust it for inflation, you're seeing quite a real terms drop.

3:36But seeing these nominal drops is still quite something and HomeTrack is pointing once again to the budget as a reason for this. Remember those homes above half a million pounds that we mentioned? Well that makes up a quarter of all homes listed for sale in the country but most of them are in the south and it makes up over half of all homes for sale in London so of course they've been disproportionately affected. So Home Track reckons that there could be a bounce back for the south going into next year with that uncertainty removed. Will that be enough to get the south going again? I'm not so sure because it's still got so many other factors weighing against it but we will see it also depends where in the south because home track state is super interesting because it breaks it down regionally but if we go back to right moves data and the asking prices they have there they've broken down all the london boroughs and it's no surprise again if you think about it that the areas that hurt the most are the prime super expensive west london-y type area so westminster for example asking prices over the last 12 months down by over 10 percent.

4:36Kensington and Chelsea nearly 5 percent. Then you've got areas like Hackney and Lewisham which are in the plus territory. So even the capital's a really mixed story because the capital is a very mixed place. So as always the power of where you invest to get ahead with your property investment is so important. The head start it can give you or hinder you if you get it wrong is paramount and that's why every year we talk about the best areas and i'm very pleased rob at least at a regional level the areas that we have picked out this year and other years have performed really well when we do our predictions we'll break it down to city by city and see how we've done then but at least region wise we've pointed people in the right direction thankfully so that's house prices which we always report on both of those sources talking about the budget and the budget of course happened which is amazing because it means we don't have to speculate about the budget for another 10 months or so Now, we had a dedicated episode with our reactions to the budget last week.

5:31So you can go back and listen to that if you want the full blow by blow. Also on our YouTube channel, we published an interview with an accountant where he talks through some of the detail of it and what he took away from it, which of course comes at it from a slightly different perspective from us. So if you haven't watched that already, do head over to our YouTube channel. Just search Property Help on YouTube and you will find it. But I think the overall takeaway, Rob, was that it was a good-ish budget for property investors, despite the fact that taxes actually went up. Yes, because property investors aren't going to expect any tax breaks when you're generally left alone, which on the whole we were, then you take that as a success.

6:04Was it a good budget? Well, we shared our reasonably strong views on that last week, and you can go back and have a listen. I'm not going to repeat what was said, but it's a strong reminder that so many people across this country, and it's not just with property, with so many things in our life, held back because of the speculation leading up to it. And then at the end, it was like, hmm, what was all the fuss about? And now hopefully people will have a bit more confidence. Yes, I do feel like in our relief that the budget wasn't worse, we kind of glossed over some of the actual detail that was in there.

6:37But that's okay, we don't need to do that again. You can go back, listen to that pod and watch that video. and the same applies to the renters rights act it was a big november we finally had the budget and we finally found out when renters rights is going to happen the answer is may next year so we did a special episode about that and a youtube video as well talking through exactly what is going to happen and what you should be doing now to prepare so if you've just been ignoring all the noise about renters rights because it's one of those things that's been going on for years it feels like it's never going to happen all this nonsense about it and you've just tuned it out now would be a really good time to start paying attention to it because it is going to happen next year.

7:12So that episode and that video will give you what you need. Now to share some stuff that doesn't seem to have made the news, but I think it's newsworthy for any property investor or anybody in the property industry, is that gateway, something we've talked about before, which is the process that developers have to go through if they're building high-rise buildings, is improving. So the story was that for people going through this process, it could take close to two years to go through this process, which if you think about it, is absolutely crazy. How can you cost the build out when you've got to go through a process that is nearly two years long?

7:42You can't, it's crazy, which is why development for apartments, at least in city centres, pretty much ground to a halt. And now we've got that supply and demand issue coming because so many projects have not started. But there is optimism in the market. And we're speaking to developers who are now going through that process and are confident that this process can be achieved in much shorter time frames and they're seeing it being delivered in much shorter time frames and now developers know how to go at the process you've had those brave developers or maybe they were just pot committed developers who've had to persevere and go through it with no guidance because it's never been done before but now that guidance is theirs because people have gone through it successfully and the times are speeding up i think it's in part because those overseeing the gateway process know what they're doing now because it was landed on their laps without any guidance either which is something we tend to do in this country a lot, announce something with no detail.

8:33They've got some experience, but also the developers have got experience, and consultants who work on these projects have got experience. So all these things combined is meaning that builds now are starting to get through the Gateway process a lot quicker, which is good news because there hasn't been a lot launched in the last 12 months in terms of new developments. Of course, there are some, but compared to a normal year, a very, very small number. And then Gateway plus the market has made London in particular really interesting. So the London market has ground to a halt. It really hasn't been moving at all.

9:08Some areas really struggling as we talked about those prime properties in particular. But across the board, developers have had no real incentive to start building. And that's reflected in the number of properties projected to complete in the coming years. Rob, do you want to share those numbers? Because they are staggering. I actually think this could be the biggest news story of this episode because the impact of this in years to come will be huge. It is absolutely wild. So how many properties are being built in London that will be available to sell or to rent in a typical year? Well, the answer is between 60 and 65 ,000.

9:41By January 2027, there are projected to be only 15 ,000 under construction. It is mad. So as a result of this backlog, the reasons that we've spoken about with the approvals process and all the rest of it, of course there's a lot of stuff that would normally be being built right now that isn't being built and the effect of that is in the year 2027-28 there are thought to be 3 000 homes completing they'll be available for sale 3 000 new homes for the whole of london it's mental that is mental we've worked on developments where half that amount is in just one development So when you are talking about the capital city, one of the world's greatest cities, with the population increasing year on year, and there's only going to be that built, well, what's going to happen?

10:30Well, first of all, the obvious thing is rents will go up, because rents are really dictated by supply and demand. Property a bit, but rents, that's pretty much the only thing that moves it one way or another. So rents are going to keep on pushing up. And then the property market, well, that could look a lot more positive as well. Rob, for me, this deserves more attention. The whole lack of builds across the country, but in particular London, I think is absolutely fascinating. So I can see us doing a podcast on this, going into more depth in the future. What's fascinating, Rob, is what we perceive to be the biggest news story.

11:03It hasn't actually made the news yet. Maybe it will at some point. Maybe this will become use-worthy as this problem builds. So with the year as a whole, how would you sum it up in one word? Well, Rob, you've put on our show notes, it's been a nothing-y year. and I would say the property market has been a bit nothing-ky. That could be the word of the year for the UK property market. It hasn't really done anything of note. There's been some very, very modest growth, but in real terms, it's fallen. Rents and yields have absolutely improved. That's not really been covered at all. But that may sound like a bad thing, but for investors who've been active, they've had one of the best years they've ever had.

11:46Yeah, if you want to extend that one word to two words, I'd say helpfully nothingy. Because it has been a great year for actually getting on with stuff. I feel like there's been so many distractions this year. There's been, generally at an economic level, an immense amount of negativity. And I think a lot of that negativity is probably pretty well placed. But it's long-term stuff. It doesn't really affect the core thesis of why you're investing in property. It's not anything that points to mass job losses, which actually would affect property prices in the short to medium term. But it has been distracting.

12:13and then in property itself we had rent is rights discussions going on all year which has generated lots of scary headlines that will have put people off and then it feels like the whole second half of the year was dominated by speculation about the budget which turned out to be pretty nothingy so what that's meant for the market is that prices haven't done much because like we said earlier there's no mass pressure for anyone to sell but also there's not anyone who's that enthusiastic about buying but from a property investor's point of view most of the competition's been cleared out they're all distracted by all this stuff they're not in the market and that means for those people who do need to sell they're in some phenomenal deals to be done so while it'd be nice to have a bit of positivity going into next year just because it's nice to have a bit of positivity from an actual investment point of view all of this going on while it's easy to borrow and mortgage rates are falling it's been a really good year it has which is bizarre right because i don't think many other people would describe it that way what will the new year bring well the noise seemingly is out the way the budget's out the way renters rights it's been announced i know it hasn't been implemented yet but we know what we're dealing with so that's going to be out the way to some degree at some point people are just going to go better crack on then and i think that could be next year we will make predictions and we will announce them in the new year but i don't think the year is going to be the same as this year i don't think many people would have predicted that this year would throw up the opportunities that it has for so many property investors.

13:40And if you have took full advantage of this market, then well done to you, because you may feel like you've done something normal, but the reason why you've been able to take advantage of it is because others haven't been prepared to move. And if you haven't moved this year because of fear or uncertainty, you might want to get a move on because yes, it's not going to change overnight but it will change this uncertainty is disappearing interest rates are probably going to fall further yields are very strong at the moment and that's not being talked about i can see things improving but when things improve obviously the strength of the deal you get won't be as good it makes sense so if you haven't moved this year as you should have whether it's you haven't done anything or you've not done as much as you'd set out to don't let 2026 be a wasted year but of course we'll talk about that in much more depth in our january episodes well just before we go we've got time for hub extra that part of the show where we bring you a little bit more and it seems rob like you managed to tear yourself away from all the budget drama to watch something on tv i did on apple tv actually it's called blackbird and it's very very good i picked it up because the reviews were excellent and what i really like about this rob is one i didn't know this before i started watching it's based on a true story which is mind-blowing when you watch it that this is true it's not a light watch i will warn you that maybe it's not one leading up to christmas that you want to consume but it is a compelling watch it is very very good one because it's a true story which is incredible considering what happens it's not a light watch i will warn you that and two it is only one season i've watched so many programs over the years where a season's finished and you think they probably should end it there that was perfect and then season two comes out it was good but a bit worse and then three four five and before you know it's like they don't know how to end it but too much money's involved so they carry on whacking these series out year after year anyway this is not one of those it is a one series hit you are done by the end of it there will be no season two i don't think i'm spoiling anything it's just a very very good watch with some very very good actors so do check that out on apple tv if you're looking for your next binge.

15:51Well, hopefully that will take you through some dark December evenings as well. Everything that we're putting out your way. So remember, we've got lots of good stuff on our YouTube channel. Just search Property Hub UK. And of course, we will be back here with the podcast next Thursday. It's a nervy one. We're going to be reviewing our predictions. So join us for that. Until then, have a great week. Bye-bye. Bye-bye.