Market Update - July 2026

0:01Hey everyone, it's Rob B here with Rob D and you are listening to The Property Podcast. It's market update time. We bring you news on stamp duty reform, record yields, huge investments, but also a bit of negativity as well. It's all in there. It's a big melting pot of news this month. You do not want to miss it.

0:25Welcome to The Property Podcast. In case you don't know, we run a business that helps our clients invest over 100 million pounds in property every year. You can find out about that at propertyhub.net slash invest. And every month on the podcast, we take everything that we've been learning about the market and reading about the market and wrap it all up in this market update episode for you. So let's get straight into it. Right, let's begin. And let's start with our first news story. It's a bit of a reminder, it happened a few weeks ago, and we did mention it on the pod. But it's important for all of us the Bank of England held rates at 3.75%.

0:55There was a split in the votes. Seven for hold, two for a hike. Yes, a hike. Now it's only two people and it doesn't look like there will be a hike in the coming months but it's interesting how quickly things can change, Rob. It is and they're walking this really tricky path at the moment because inflation is too high. Not as radically high as it has been in the past, currently 2.8%. So you think, oh we want to bring down inflation so let's put up rates but at the same time the latest employment figures are out and are not looking so good the economy has lost 138 000 employees over the last year unemployment has hit 4.9 percent so the economy not doing so well suggesting that actually you shouldn't increase rates at all because it needs a bit of a helping hand rather than the brakes being put on and rub at the same time the latest public borrowing figures have come out and the government has borrowed 7.7 billion a mere 7.7 billion more than they thought they would meaning that they're likely going to have to come back for more tax in the autumn budget to try to balance the books so for the bank of england trying to make this decision and for our almost certainly incoming pm andy burnham not an easy task to manage no it is not easy especially if he sticks to the fiscal rules that rachel reeves set out at the beginning of labor's term 7.7 billion rob if that was the total it would sound high but that's just the overshoot that's crazy i mean that's some overspend and that's just year to date as well so they've still got another six months to blow even further past the budget i mean it is really tricky and the fact that the markets are seeing this going not so sure about the uk which means that it's costing the government more to borrow which means it then feeds back into borrowing more money just to pay off the borrowing i mean people say doom loop and it all sounds very scary but it is certainly the case that things are on a pretty unhelpful path and how do you get off this path?

2:44It's going to take something pretty radical and it's hard to imagine anyone having the stomach to do it because it's going to make pretty unpopular in the short term. I think the term doom loop sums things up perfectly, Rob, because each leader from all parties, I always stress this because people think we've got strong allegiance to a certain party at different points of the podcast, but it doesn't matter who's been in over the last 20 years. They've all done very similar things. It's this pattern that has been followed now for a long, long time. And things have slowly got worse. So you're right.

3:19There has to be change, but someone's got to be brave enough to do that. It might be fun one day, Rob, to be grandiose enough to say how we would fix the UK economy and put some radical measures out there. I would love that. If you track me down and buy me a pint, I'd probably start rattling off what I believe anyway. So maybe I won't have the pint before the podcast because we record this at 7.30 in the morning. but but i can still get pretty opinionated but that's not for this episode and let's move on to house prices and maybe the good news starts now because house price growth picked up to 2.2 percent according to nationwide and their june figures which was published at the beginning of this month and the notes say accelerating to 2.2 percent from 1.7 percent i mean i'm all for positive news and this is a positive direction for house prices but I may not use the word accelerating but it certainly is a increase and there has been some concern about property prices and what they would do this year and despite the negative sentiment across the country and which is much broader than just property we must stress property prices so far haven't really been impacted Now we could talk about what's happening in real terms and then the silent property crash that we talk about so frequently.

4:42And we'll link to our latest episode on that in the show notes because I think it's well worth you understanding what's going on. But regardless of all that, Rob, still not as bad as many had predicted. It's not. And it's almost confusingly not bad considering everything that's happened over the last few years, especially those interest rates we talked about at the start of the show. Rates a few years ago were practically nothing. now they're a lot more than nothing why didn't that crash the market why is the fact that sentiment is so bad why has that not crashed the market and at the same time why are rents going nuts there's lots going on in the market that doesn't appear to make any sense it's not at all what you'd predict if you were coming at this from an economics first principles kind of angle but we got out a youtube video about this last week called what is happening to the uk housing market which pinpoints one factor that is behind all of this and if you understand that one variable the rest of it starts to make a lot more sense.

5:35So link to that video in the show notes. Would definitely recommend checking that out if you want to be less baffled about what's going on. But while house prices, you could say, Rob, are stable, I definitely wouldn't say accelerating, but it is certainly still a very negative market sentiment wise. Rightmove's latest figures showing that asking prices fell 0.6 % last month. That is the biggest June drop in 14 years. And according to Zoopla figures, buyer demand is down 15 % year on year. And probably the most eye-catching stat in there for me, three out of every five homes that have been listed since January still haven't been sold.

6:13So prices might not be falling, but no one's biting, no one's buying. I really do hope England won last night because we've started fairly negatively on the pod this week. And for England have lost and then people have listened to this first thing in the morning. They're going to be crying on the train to work. It's not. But I'm going to attempt to lift everyone back up, Rob, because there is good news. And it's important good news. And this is lending related. And that's that swap rates. And that's the rate that the banks borrow at has fallen below 4%. And off the back of that, six lenders cut their rates in the first 24 hours afterwards.

6:58So interest rates and the rates that we borrow at are linked. They are absolutely linked, but they're not exclusively linked, as we've explained on the podcast before. It's what the banks borrow at that's the most important. And it's heavily influenced by interest rates. But volatility also plays into that. And the world has been a crazy volatile place this year. But the last few weeks have been calmer. Yes, there's stuff going on in the world, but it's not as shocking as it was. It's not as new as it was. And because of that, the financial markets are a little calmer. Therefore, borrowing rates have come down, and that's improving what people can access in the market.

7:42And this is really interesting, right? We've talked about this on the podcast recently. But amongst all this negativity, you've got house prices that are falling in real terms, but aren't crashing and look like they're stable. but then you've got rents going up and borrowing rates are still attractive. Getting a mortgage that begins with a four is not bad. If you look at the last 50 years, it's actually pretty good. And although there's a lot that can make you feel down and glum, when you look at the picture of what's playing out in UK property, as we've talked about so many times before, there's this massive opportunity hidden in plain sight, which is property prices have fallen in real terms.

8:27You're able to get better yields than ever before and lending isn't too bad. It's not the best it's ever been, but it's not bad and it's improving slightly. It is. And I appreciate your efforts to bring us back up, Rob. So I'll blow straight past the next story that says mortgage approval slump in May. Because I think that's actually probably an artifact of some other stuff that's happening in the market that plays broadly into this theme that you mentioned, which is because of sentiment, no one's that interested. but when you look at the actual position it's pretty good. And as you've been saying mortgage pricing mortgage availability plays a big part in demand and something which could boost demand in the future is an FCA consultation where basically they're consulting into relaxing the rules a little bit.

9:10So after the last financial crash the FCA put a whole new framework in place about how much you could borrow and the rules around it and it worked and a big part of the reason why we maybe didn't get a big crash when mortgage rates adjusted upwards so quickly was the rules that have been put in place. But they're now saying, great, okay, we've tested the rules, they've worked, but maybe there's a chance to introduce more flexibility. So they're talking about updated affordability guidance, more flexibility, better ability to borrow later in life, in retirement. So that is only at an early stage.

9:41But if we continue to see interest rates drifting downwards, lenders wanting to be competitive and wanting to do business, and the rules that are binding them, loosening a little bit, then who knows, next year we might see house prices accelerating to 3%. You never know, Rob. Crazy things can happen. We might be delirious on the pod if that happens, Rob. But as we've alluded to, there's a really interesting story with rents, and that is that rental inflation is up. Good Lord have announced that new tenancy rents have jumped by 8.1 % in a single month to£1 ,309. That means annual inflation sits at 6.5%.

10:24And then we bring you a story from RICS, the Royal Institute of Chartered Surveyors, who have released data revealing that tenant demand is up by 18%, which is the strongest it's been in over a year. And then finally, Rob, Fleet Mortgages, I've looked at their lending book and said that yields are holding strong at 7.8 % on average across their lending portfolio. But in the Northeast, it's up to 9.2%, which is crazy. It's crazy high, but it's even saying in London, Greater London, it's still above 6%. When were you ever getting yields like that in London? That's absolutely crazy. Now, of course, it's not Knight's Bridge where those rents are being achieved.

11:12But the fact that it's possible, and we have to be careful, right, this is fleet mortgages, and they lend on a certain type of product. And it's probably the type of rental property that may be more yield driven than capital growth driven. I think that's fair to say. These averages will be higher than the government data that we'll see. But the government data is still high. But the fact that that this is what their lending book looks like is fascinating. So overall, Rob, if you like to get a good return on your property, this is great news. Obviously not great news if you're a tenant, but if you are an investor, which the vast majority of people are who listen to this podcast, it means that while there's all that negative sentiment out there, you can buy cheap at the moment, get reasonable lending levels and get a cracking yield.

12:00Well, that's it. And I agree. I think those averages from fleet are higher than a truly representative average but directionally of course correct because prices are staying flat and rents are going up I'm really interested in this single month jump of eight percent because that is super high and previously what we've been seeing over the last six months maybe more is rental inflation coming down so rents are still going up but they're going up more slowly than they were and then suddenly a true acceleration a real jump i'm wondering if that's a one-off because of renters rights because now under renters rights since may you can't accept anything above the advertised rent which means you we've effectively moved to an offers up to system so this could be a one-off of everyone moving their advertised rents up going well that's the maximum that's a ceiling and then i'm willing to accept something below that so it'll be interesting to look at that number again next month and see if it's corrected back downwards but regardless given that rents are going to keep going up to some degree and the prices look very determined not to do that we are just going to see yields as you say rob getting better and better a really interesting news story now from savills and that's uk build to rent investment hits a record 2.2 billion in the second quarter of this year this tells you a lot because the smart money the investment money is looking at the uk property market and seeing a huge opportunity, a record opportunity.

13:22And the money is flowing into the UK property market. It might not be flowing in because there's property programs on the telly every evening, and there's lots of speculation. No, it's flowing in because of all the reasons we've talked about already. Borrowing levels for the bill to rent investments will be at reasonable levels right now. Everything's calmed down. You have buying opportunities, you know, good prices, good, like really attractive prices opportunities to do deals and of course those very strong yields that we've talked about so i would not be surprised rob to see this number go up again in the near future the next reported number to be stronger again and again we've got to link back to our youtube channel here you've put together a really good video recently in the last few weeks on this very subject we will link to that in the show notes again and i think we've got to do the typical youtuber thing though i know you're the youtuber rob but if you haven't subscribed to the youtube channel you're missing out on that type of content like it's really really good stuff it's stuff that we can't always cover on the pod so it's not a choice you don't have to listen to the podcast or the youtube channel they are very different and hopefully you'll agree both very valuable so check out those links and while you're there make sure you subscribe yeah what my blooming plaque we're so close to 100k but something else that we've talked about on youtube and here on the podcast is this seemingly really weird divergence where on the one hand you've got the institutions moving in but on the other you've got lots of individuals going oh god no this doesn't make sense anymore and there's been another story in the last couple of weeks which really illustrates this which is a survey from emu which says interest in becoming a landlord falls in almost every uk city except cambridge for some reason why people in cambridge are so positive about property i do not know but the point is that everywhere except cambridge there's been falls across the board people are just not into the idea of property in the same way they were the negativity all the renters right stuff and everything else that's going on is according to the data putting individuals off we've seen the stats around existing landlords leaving but this is looking at it from another angle which is not just people leaving but people who would have been interested in getting in now not so why is that happening well all the institutions are pouring in billions well you have to go to the youtube channel for that one because that video explains it all i'm going to pick a report out that I like the look of Rob and that is a report from the HCLG.

15:43Now of course you'll all know who that is and I didn't need to to look it up but the Housing Communities and Local Government Committee have published a report that says that stamp duty needs to be overhauled and they're focusing on first-time buyers in particular who are trying to get on the housing ladder i think that change to the stamp duty system is needed it holds back our property market not just for investment for homeowners like that makes up the most of the market right is homeowners people will rarely make a sideways move when it comes to property because of stamp duty the costs involved just do not make it worth it for so many people but why why do we not have the ability to just move house if we want to.

16:30Somebody who rents can do it. But if you own a home, you are financially penalised. I mean, penalised isn't even the word. You're financially beaten up if you decide to make a sideways move. God forbid if you have to move areas and you're buying a property for the same price. That number could be absolutely significant. It could be a new car. if you're buying in the south of England, it could be a house in the northern parts of England. That's the difference. It could have been a buy to let. It could have been put in a child for a university. These are meaningful sums of money, which absolutely holds back the housing market in the UK.

17:10And I strongly believe a lot of economic activity. So this doesn't go as far as that, but I'm pleased that the government is at least talking about it for first-time buyers, and that any positive change, for me at least, would be very, very welcome. And they are right to identify that it is prohibited for first-time buyers to get into the market because of that extra cost. They've got to save up for a deposit. That's, you know, a big enough thing to do. Then to have to fork out for stamp duty as well makes it really, really difficult. So it's not going as far as I'd like, Rob, but I'm at least pleased to see that the government is discussing stamp duty as a whole.

17:50Yeah, I think it is movers. I think it's the sideways movers that penalises the most, as you say, which is, of course, holding back the labour market and all manner of other things, as is the general awfulness of buying and selling homes. Because say you get a really good job offer, but it's somewhere two hours away. It's a chance to apply your unique skills to something that will make a meaningful difference to people's lives and it'll pay you more money. Of course, you're going to go for that job. oh no you're not because you've got to pay potentially tens of thousands of pounds in stamp duty and it's going to take you months and months and months of agony to sell your home and buy another one so what you've just been talking about rob goes hand in hand with something else which the government is supposedly working on which is a shake-up of the home buying process if you read what it is it's being proposed it'll all look very familiar to anyone in scotland because it's very similar to what's already in place in scotland and that to me should make this super easy and low risk and non-controversial because there is this other model it exists on just the other side of the border and it is better and everyone acknowledges that it's better not perfect but better but again much like stamp duty this is something that it feels like we've been talking about pretty much since the podcast started there seems to be a new consultation on this every so often but for whatever reason it never really goes anywhere maybe this time it'll be different i hope it will be i hope it doesn't get derailed by other priorities or by vested interests who'd rather things didn't change because i think rob if you put this and stamp duty reform together that could make a real meaningful difference to people's lives absolutely well there we go we managed a passionate end to the podcast well hopefully this week's podcast has made a meaningful difference to your day to your mood i mean we started off pretty bad but we brought things back up again but we want to continue that trend of making your life that a little bit better.

19:33Maybe not meaningful, but at least a bit better. And that can be done this week with Hub Extra. And I've got a great tool that I've been using the last few weeks, and I absolutely love it. I've created my own news feed. So I do this in Google Gemini, but I'm pretty sure you could do it on any AI platform. And what I've done is instructed Google Gemini to give me my own news feed every morning. Now, unfortunately, I do waste some time in the mornings not always but sometimes in the mornings looking at different news articles and I try to stay away from the normal news it's more sports news but I do spend some time doing that and it's actually an inefficient use of time researching across the web to find news stories I'm interested so I've created my own personal daily news feed and in that news feed I get updates on Liverpool Football Club and I get it to give me positive news from the last 24 hours because there's so much positivity happening out there there's so much being achieved day in day out that just isn't really properly reported on but it's happening and I get that in my news feed so I get information about my beloved football club which normally maybe not last season but normally makes me happy and then I get really positive news and then what I've also put in is in my local area where I live, I've asked it to update me on new things that are happening in that area.

21:01So whether it's events, new restaurants opening, new infrastructure projects, anything grander being announced, that also appears in there as well. You can create this for yourself and it's really easy. I'll tell you exactly what I did. I went into Google Gemini and I said to it, I want you to create this news feed. It must be from the last 24 hours, that is key because it or dig up old news if you don't guide it. And then I gave it limits on how many news stories I wanted from each section, the priority of the type of news from each section, and I set it away. Now, when you do it, run a test version of it, and it won't be perfect.

21:37Don't expect it to be perfect after one go. You then will need to give feedback to it. Go, oh, that was great. Do more of that, but you gave me this, and that's something I'm not interested in. Or I'm getting everything I want, but I'm not getting this. Can you add that, please? So you can edit and craft every day if you want, and I've done this multiple times of mine, the newsletter. So you are getting the perfect newsletter in your AI inbox every day. Mine arrives at 6.30 in the morning. I do not now go off scrolling for different sports news that may interest me or local news elsewhere, so it's actually condensed the time I would do that.

22:17But it's exactly what I want. It's the perfect news stories. My feed gets better with every amendment I make and it's free to do. It's so easy. You just talk to your computer, your mobile phone, whatever you want and create it. You do not need any technical expertise. You just need a bit of creative thought. You need to give it some feedback and then you will get your own personalized newsletter that is perfect for you. that is super cool but if you're about to run off and do that for property then you don't have to because we've done it for you we've got the perfect property newsletter already it's called property pulse well maybe it's not perfect i think it's pretty good it comes out every friday it's completely free and it's the manual version we go off and find everything that's happened over the last week and filter it down so you know what you should care about we've got a hefty dose of our own insights in there as well so you can go and subscribe to that at propertyhub.net slash pulse but that is us done for this week do remember to go and check out the show notes for the links to the YouTube videos that we mentioned, which very much build on some of the ideas we've been talking about today.

23:14And we'll see you back here next week. Bye-bye. Bye-bye.