Market Update - February 2026

0:00Rob Dix:Have you ever wondered what successful property investors actually do? Well, after more than a decade of helping thousands upon thousands of people invest, we found that actually it's really simple. The investors who do the best are just following some basic principles and sticking by them. So we put together an entire guide that sums up these principles, an investment philosophy, if you like. And you can find that for free at propertyhub.net forward slash strategy. Hey everyone, Rob B here with Rob D and you are listening to the market update on the Property Podcast. This week we've got insights on rate changes, we cover the mortgage market, interested news around rents, the now and the future, and we bring you a big news story on ground rents.

0:47Rob Dix:All that and more in this week's episode.

0:55Rob Bence:Welcome to the Property Podcast. If you don't know by now, we run a business that buys more than 100 million pounds worth of property every single year for our clients you can find out about that at propertyhub.net slash invest and we and our team of course are always staying close to the news always keeping an eye on what's going on with house prices and rents and trends and legislation and all the rest of it and so you don't have to do all that we're going to round it up for you right now okay let's get straight into our market update bring you up to date with everything that's happened in the world of property over the last month and we'll start rob as we often do big picture and the big economic news of the last week or so has been the bank of england's latest interest rate decision so on the face of it not that exciting because they held rates where they are but it was close it was really close and i think that's the

1:35Rob Dix:news story here that's the big point of this is how close it was for those who don't follow these things as closely as us there's a committee and they vote and there's nine of them so you have to have a majority vote for a rate cut or or rise and it was five to four in favor of holding for voting to cut. Now that is as close as it can get. So I think it's reasonable to expect a rate cut very, very soon. I would be surprised, Rob, if we didn't cut next month, especially on the latest inflation news that we've had, that it's predicted to hit its 2 % target by spring this year. I actually can't remember, Rob, the last time it hit its target of 2%.

2:14Rob Dix:We are going back many, many years but even without hitting target we've been on a cutting spree of rates so if we actually hit the target the rates could come down quite significantly and what we predicted and what the market's been forecasting so far that could start to shift we could see significant rate cuts now i don't think they're going to go crazy they're not reckless that's you know that's kind of their job to to be sensible these things but that's a big event if we actually hit target for the first time in many, many years. I think it's fair and reasonable to expect that rates will start to fall further.

2:49Rob Bence:I think that's a reasonable expectation. And that, of course, is supportive of higher house prices, as is the fact that because inflation is at the moment lower than it has been for a long time, real wages are growing. So people's earnings are growing faster than inflation, which means, of course, that affordability improves. You've got affordability increasing from the fact that people are earning more in real terms and the fact that house prices have been pretty much standing still. So house prices are getting cheaper in real terms, as we've spoken about recently. So it very much falls into this pattern that we've been speaking about.

3:20Rob Bence:It's like, things are getting a lot better for property than people realise. And at some point, they will realise. But at the moment, the narrative and the reality are miles apart.

3:29Rob Dix:Well, let's talk about house prices, Rob, because Halifax, as they do every month, have released their data. And the data for January is telling us that house prices rose by 0.7 % in one month. And that is significant because it's pushed the typical home value above£300 ,000 to£300 ,077 for the first time. But what's also interesting is that in the last 12 months, it's grown by 1.1%, which absolutely backs up what you just said, Rob. You know, house prices haven't gone anywhere. Inflation's been a lot higher. But 0.7 of that growth is in January alone. Now, it could be just a January bounce. It could be a one-month thing, and next month the prices fall again.

4:10Rob Dix:We will see. But it's interesting that it's broken that threshold. But for me, it's more interesting that the majority of the last 12 months' growth has come in January alone.

4:18Rob Bence:Yeah, and all the sources are pointing in the same direction, which hasn't always been the case for the last few years. We've got the Halifax data there. Nationwide is showing the same thing, even though the overall numbers are more modest. They're showing a 0.3 % increase in January after a fall in December. and right move as well they look at asking prices rather than sold prices and there's always a January bounce in asking prices but they're seeing an even bigger than normal January bounce in asking prices and the pattern here that everyone's talking about is basically now the budget is out the way that uncertainty is out of the way mortgage rates are getting better everything's a bit more stable so people going right right new year let's do it time to make a move so not surprising that we're seeing on all the indices that things are picking up staying with house prices but focusing

5:01Rob Dix:on the capital now the Guardian recently had an interview with Matthew Pennycook who is the current housing minister say current because history tells us it chops and changes quite a lot but this week's housing minister Matthew Pennycook has said that house prices in London need to fall in real terms to meet affordability in the house building targets now the 1.5 million homes target a lot of those homes need to be in London because of the demand there's lots of really interesting dynamics are playing now with the London market because house prices are falling in real terms and they have been more aggressively compared to the rest of the country for a long time now because London's even been flat or falling for many many years where inflation's been quite high so with that in play house prices absolutely have been falling like the minister points out just as the minister would like to see happen and realistically it will probably happen again this year and next year but the consequence of this is that developers are reluctant to put shovels on the ground they're reluctant to go forward with house building so you've got this massive target nationwide and then a huge chunk of it expected to be in london but it's just not going to happen in london because the developers aren't willing to go forward but what also then will happen is the knock-on effect from that is you just do not have enough rental stock either so the rents will start flying back up in london if this continues because you've got very little being built in the capital i mean record lows like it's astonishing how little is being built right now so you've got that at play you can't build stuff overnight so this is going to be a lag even if everyone starts in the next year or two which means that the population increases we see year on year in london which are quite dramatic will then put an upward pressure on rents because there's not enough new stock coming to the market so london's always been an interest in property market.

6:52Rob Dix:But at the moment, I think it's particularly interesting because you can see a world where yields are going to start becoming very attractive in a few years' time because of all the dynamics at play.

7:02Rob Bence:Yes, and the reasons behind that lack of building in London are really interesting as well. So many factors coming together. We've actually got a YouTube video coming out on that soon because there is so much to get into. So if you're not already subscribed to our YouTube channel, then go sort that out. Just go to YouTube and search Property Hub. Then hopefully the algorithm will shove that video your way when it comes out. Let's move on from house prices to rents. And we're seeing rents go in the opposite direction. So house prices having a really strong start to the year. Rents, not so much.

7:27Rob Bence:According to Homeless, average UK rents fell by 1.2 % in January, the second monthly drop in a row. And in London in particular, a monthly drop of 2.4%, which is really pretty big. I don't think that in any way contradicts what you were just saying, Rob, because you were talking about more of a long-term pattern, which I completely agree with. But in the short term, I've definitely seen rents cooling down in London. I mean, I've just been looking at one particular micro market, which is the area that I live in. I've seen rents in some developments come down 20 % in the last two years. Now that's in no way representative and it's quite a specialist subsegment.

8:01Rob Bence:But I think it shows how there was just so much demand in the market a year or two ago that people could basically charge whatever they want and people were queuing up. And now that has definitely dropped away. Obviously, no shortage of people in London, but that crazy supply demand imbalance that we had has definitely come back to something more like normal. And you're seeing that across the UK, but you see that in particular in parts of London.

8:24Rob Dix:Yeah, that does not surprise me in the short term what's happening. If you look at net migration numbers, we had a couple of years back numbers as high as 924 ,000, which a lot would have gone towards London and the capital. A lot of people come into the country, go to London. But now more recent data show that's dropped by 78 % to 204 ,000. Still a high number, but that demand side has gone. but the stock was there and stuff was being built. And that's because developments take years to come through. So the projects were committed. For those renting in London, this is a welcome respite from the aggressive increases in rent.

9:00Rob Dix:But we'll absolutely keep you informed of that longer term trend that we talked about and looking at all the levers that are going to move it. But absolutely do check out our YouTube channel. There's so much we can do there that benefits visual rather than audio. so do check out very close to 100 ,000 subscribers as well if everyone listening to this podcast went and subscribed we blast through 100 ,000 so please please go and check it out and even just to support the channel search for property hub bang that subscribe button let's get through 100 ,000 subscribers let's get rob d a plaque and then you benefit from the brilliant content that rob and the team are putting out rob while there seems to be more certainty around interest rates which is great news.

9:43Rob Dix:There's been a bit of volatility in the mortgage market because swap rates, the rates that the banks actually borrow at, they don't borrow at the interest rates, although it's heavily influenced by that, a bit a bit all over the place, possibly surprisingly for the beginning of the year.

9:57Rob Bence:That's right. I think that's all just relatively small fluctuations in this overall trend of rates stabilising or drifting down though. It does show why it's important when you are buying or refinancing to work with a broker who's monitoring these things for you because often if you're applying with a lender and they bring out a better product while you're in the process you can switch bdd broker to notice and ask for it they're not just going to do it off their own back so working with a good broker is really important and we had a couple of brokers giving their predictions on the podcast a few weeks ago so i would definitely go and listen to that because they give their big picture view and predictions for the year ahead but generally rates are looking better than they have done for a long time and choice is higher than it has been since before the financial crash so for products in general not just investment products.

10:40Rob Bence:There are more than 7 ,000 products available now. And the number of buy-to-let products available is also at an all-time high. Lenders as well loosening up a little bit. In fact, I saw a story in The Times recently questioning whether we're paving the way to another financial crisis because lenders are easing off and they're going to get carried away again. I think we are a very long way for that. Lenders as a whole still being very cautious. But we're definitely seeing things loosen up a little bit. So that's good news for anyone who is in the market right now.

11:06Rob Dix:Big news now, and this article's from the BBC, in the world of ground rents. Ground rents no longer exist on new properties. So if you have a new build property, leasehold property I'm referring to, so most of the time they're apartments, ground rents aren't a thing anymore, but they were. And some of them in the past have been very aggressive to a point that it's actually impacted house values. You always need to look at ground rents when assessing a second-hand apartment purchase. Often it's fine but it's just something you do need to check because in the past some of the contracts put in place had very aggressive increases.

11:42Rob Dix:But that could all come to an end under new government plans and those plans are that ground rents are to be capped at£250 in England and Wales. This is really really interesting Rob for a few reasons. The obvious that's good news for people who are under those more aggressive schemes but what I find really interesting is that there's very very wealthy people and groups and companies that own lots and lots of ground rents and those people you could say are also powerful because of the money and the funds that they have this will be annoying them this won't be something that'll be going down well great for the people in those properties but i have to applaud the government and i've criticized this government and the last quite extensively and a lot of things they do around the property market and the economy.

12:32Rob Dix:But I think this, for me, is a great sign that they are doing something that is needed for the people, which is needed for individuals, and going against what I can imagine is some intense private pressure. We'll see if it's delivered first. I have to say that. It's only a plan at the moment. But if it's delivered, it's great news for a lot of smaller individuals, not so great news for a wealthy few. The bravery to put this type of stuff through is more than Labour will actually get credit for. And as I am always quite critical of our governments, I'm going to give them a little bit of praise here if they actually see this one through and deliver on it.

13:09Rob Bence:Yeah, well, as you say, it is a draft bill. So we'll have to wait and see whether it does happen. The lobbying, I'm sure, will continue. But it is good news. And it did look at one point like it wasn't going to happen because one of these things where they say, yeah, we're going to get rid of ground rent. And they try and do it. Oh, actually, this is quite hard. But it seems like for now, at least it is going to happen. And initially, you wanted to get it to zero. They wanted to do away with ground rent. It seems like they haven't been able to do that. They've set it at£250. The average annual ground rent apparently is£304.

13:35Rob Bence:But of course, if they cap it at that level so there can be no increases because of inflation, it will eventually become effectively zero. So like in 30 years, you'll be paying£250 for your coffee. So although this won't make a giant difference to most people on day one, it does mean that over time, ground rent will effectively go away in any meaningful sense. There's actually quite a nice

13:53Rob Dix:compromise that they seem to have reached there will be some people that will benefit from day one there's an example in the news story of a lady who has a property in manchester and her ground rent is 700 pounds and because of that she's finding it really difficult to sell that property because you have service charges on top now i don't have a problem with fair and reasonable service charges because you're getting a service but the ground rent that's the bit that can make a few people feel icky because what's that for it's not really providing you anything of note so people in that situation and then it's a much smaller group for people in that situation those who find themselves in these more aggressive agreements they will be very much hoping that this makes it through because those properties then will actually be worth a lot more overnight and

14:37Rob Bence:at risk of this whole thing turning into a giant advert for our youtube channel we've also got an interesting youtube video coming out about flats in general because we're in the situation where the reality of the law around flats has got better over the last few years and it's continuing to get better but people's perceptions around flats i don't think have ever been worse and there's really interesting data around a potential opportunity there as well so again we'll be covering that on youtube so that just leaves us with a couple of final bits to wrap up this month so the government has also been busy talking about everyone's favorite subject epcs energy performance certificates a new report came out on that in january where the deadline for getting to that elusive grade c has slipped there's going to be 2028 for new tenancies now it's going to be 2030 it seems like 2030 is going to be the date but still room for that to slip as well we'll wait and see and rob can you believe it we are less than 100 days away from rental reform i'm gonna

15:28Rob Dix:feel the excitement crackling in the air yep we will keep you fully updated on that what you need to be doing or what you need to expect because although we feel like we've talked about it a lot a lot of people couldn't fill a postage stamp on what they actually know about it it's so it's something that we talk about a lot because it's going to impact a lot of people who listen to this podcast but i think there's a big awareness piece that needs to continue to happen around that so we will keep you updated and if you enjoy this part do share it and we know a lot of people in the industry listen to this podcast as well as investors so share it with others let other people know that this resource once a month exists where we round up the market in a concise way for you and hopefully keep you mildly entertained along the way and if that's not enough we also deliver hub extra part of the show where we like to give you more and rob we both love a good book so this week for those who like a read they'll be very happy with this week's resource

16:22Rob Bence:yeah shout out to becca and our marketing team who put this one on our radar it's called fable fable.co and it seems to be a cross between like a better good reads so somewhere to share what you think of books and get recommendations and an online book club on the website it's described as a more thoughtful and less toxic social media app which sounds pretty good to me instead of getting furious and shouting at each other about whatever's going on in the news that day you can just chat about books and that sounds a lot healthier to me so if you are looking to read more so you can do some motivation some community and some recommendations then you can check out fable we'll have the link as ever in the show notes and in the show notes you'll find links to the news

16:56Rob Dix:stories we've covered today and a link to our youtube channel which by now i'm sure this far into recording you've already subscribed so maybe that's one to share with others we'll be back on sunday in the sunday times answering more questions there we'll be back on tuesday answering even more of your questions on Ask Rob and Rob. And of course, we'll be back same time, same place next Thursday, bringing you another Property Podcast. So until then, take care, have fun. Bye-bye.

17:20Rob Bence:Bye-bye.