Reviewing our 2025 predictions - how did we do?

0:02Hey everyone, it's Rob B here with Rob D and you are listening to The Property Podcast. Each year we do something a bit crazy, something that no one else would ever do. We go back and listen to what we predicted 12 months ago, what we said would happen this year. Most people just make predictions and nobody follows up, but we are crazy because we do follow up and we tell all of you exactly what we said.

0:31Welcome to the Property Podcast. Thank you for joining us. In case you don't know, we run a business 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 yes, this is the annual episode where we fact check ourselves. Were we surprised by house prices, rents, interest rates, or even the Premier League? Well, stick around to find out. A great way to slightly delay today's episode is to bring you this week's news story. And let's look at someone else who's going to miss their numbers before we look at us potentially missing ours.

1:01So the UK government said that they're going to deliver 1.5 million homes over five years, and that was by 2029. Now, the Reform deputy leader has come out this week and said they will miss that target by over 40 % and deliver around about 800 ,000 homes. Rob, I don't think this is news. I'd be surprised if they hit 800. Yeah, and if you don't like reform, that's okay, because it's not just them. Savile's analysis says the same thing, 840 ,000 new homes by the end of the parliament. And I think when this target was announced in the first place, we said the safest prediction of all time is to say it's not going to happen, because it's never happened.

1:41No government has ever hit their housing target in the entire time we've been doing this podcast. And why are they going to miss? Well, Richard Tice says in this interview that a lot of it is to do with costs, to do with energy costs, to do with regulation. And there's certainly going to be some truth in that. We've talked in the past about how building just isn't economically viable in large parts of the country. But a lot of it is also going to be the market. Builders will only build what they believe they can sell at the price they want to sell it at. So it's kind of a nonsense for a government to have a housing target in the first place, because it's not something they can control.

2:09Well, they can't directly control it. They can help get towards it. And I don't think that help has been coming either. I know developers who've spoken to the government push back on how complex things like gateway have been that's a planning process that you need to go through if you want to build high-rise it's all a mess we talked about it before on the podcast not going to go into it now but when they've pushed back on the government and said but what about your housing targets they've privately said well they're soft targets so they're already climbing down internally from their own targets publicly they may still be sticking to them but already privately they're saying that it's a soft target or maybe we'd describe it as a stretch target.

2:45So I don't think Richard Tice or Savills have been particularly radical here with their prediction. I think their prediction makes a lot more sense of what's going to be delivered. We already have to look at where we are in the state of planning, what's being built, the lack of homes being built, particularly in places where they need to be built as well. We've recently talked about the lack of homes being built in London, the place where homes probably need it the most. So there we have it, Rob. We have one target missed by, looks like it's going to be by over 40%. So if we do better than 40 % swings on our numbers today, then I think we're ahead of the government at least.

3:17Well, I hereby rebrand our predictions, soft predictions. So now we don't have to be embarrassed if we get them wrong, because you know, we just thought maybe, but it would be in the area. So it's as much walking back as we can, because we can't delay any longer. We have to go back and see how our January selves did. So every year in January, we make a set of predictions. And then every December, we revisit to see how we did. It's historically been a mixed bag. Let's see how this year went. So we're going to get into predictions on interest rates, rents, things way outside a wheelhouse like Bitcoin and the stock market.

3:47But we always start, Rob, with house prices. So let's go back and listen to what we said would happen to house prices this year. My prediction is growth between 4 % to 5%. So where I've ended up is actually a bit lower. I've ended up at 2 % to 3 % is the number that I've chosen. Well, I obviously had a bit of New Year optimism when I delivered those numbers. But Rob, you were very, very close because Nationwide, the set of data that we use every year for this segment, has said that house prices are up this year by 1.8%. So you were 0.2 % out. So I'll give you that one. That one's super close. I'm miles away.

4:30but I'm not the only one who was miles away because others did make predictions as well nationwide said two to four percent I mean that's such a banding it's hard to go wrong so they were close but they were also 2.2 percent out if you do the upper range supla two and a half percent so wrong maybe not as wrong as me right move I like right move they said four percent which is where I was and Hamptons was up by three percent as well so the majority of the experts were wrong but you sir were very very close well done yeah wrong but less wrong i'll take it and i think the reason that everyone overshot i don't think it's because the path of mortgage rates or anything differed radically from what was expected i really would put it down to sentiment this has been one of the worst years for sentiment that i can remember and for me it's that intangible factor rather than any kind of big macro thing that's probably weighed us down this year.

5:27Okay, let's move on to cities. Which cities did we think would perform best? Historically, one of our stronger areas. So let's have a listen to what we said. I'm going to give four names and hope that three of them make the top five. I would consider that a good result. So Manchester, Birmingham, Sheffield, Newcastle. I am going for these four will all appear in the top five. Oh, wow. Okay. Manchester, Birmingham, Sheffield and Liverpool. Well, Rob, we've had an incredible track record of predicting the cities that are going to perform the best each year. And I think we've done pretty good. We've done exceptionally well.

6:04Yeah. You've nailed it. You were a little more cautious with your prediction. Once again, I think the January buzz made me a bit bold of trying to name four out of the five. You said out of your four choices, three of them would make the top five. Well, that absolutely happened because Manchester was in the top five, Sheffield was in the top five, and Newcastle was in the top five. I said all of my four would make the top five. So Manchester did, Sheffield did. Liverpool was the top performer, which was great. I put that one in as well. Where I went wrong was Birmingham. That stopped me getting all four of five.

6:39But Birmingham did come sixth, so it wasn't that far away. I'm not going to beat myself up over that one. So close. Yeah, super close. So I'm really happy, Rob. We, every year, seem to do very well in this area. I think it gives us some credibility when the rest of our predictions aren't so strong. So I'm super pleased that we've continued this trend. I'm already feeling the pressure for next year to make sure we get it right. But this year, I'd say, I think we've nailed it. I think that's a really strong performance. Yeah, very happy with that. And given that it's a large part of our business, figuring out where and what you should be investing in, I'm glad that we've got credibility on this matter.

7:19So Rob, enjoy. Remember this feeling because we need to move on to London. We always make a separate prediction for how London will perform. Let's hear what we said. And my prediction is that London, for the first time in a very long time, will finish in the top half of the home track top 20 cities. Rob, I'm not just saying this. I'm rustling my paper at you so you know it's true. I had exactly the same thing and i felt bold saying that as well but london top half finish yeah absolutely can anyone remember why we made this prediction this was not close no i think we went early on london i think we've seen potential there and the data suggests that london's going to start performing soon i think we've gone early now i think if we are trying to be fair to ourselves rob london for the last few years has finished bottom rock bottom of the 20 cities that home track reports on or second to bottom it's been in the bottom two for as long as i can remember i can't remember when it wasn't in the bottom two it didn't finish in the bottom two this year it actually didn't finish in the bottom five but it was six from bottom so it's not like i love how you're dressing this up yeah it's not as bad as it has been for london there are places that have done worse this year, Portsmouth, Southampton, Aberdeen, Cambridge, Bournemouth, to name a few, but it's not made the top 10.

8:46It's made the top 15, but not the top 10. So while we are absolutely wrong, at least we spotted the trend of movement. If I'm grasping at straws here, I think we've gone early on the strength of the recovery, but there has been a bit of a recovery. Or if you want to be not as kind to us, there are areas that have just done a lot worse. London hasn't recovered and those other areas I've mentioned have just really done poorly and London hasn't really changed much. You can look at it either way. It is getting near to Christmas, so hopefully you take a more charitable view to our prediction. London had relative strength for the South East, so I think that we can say that.

9:22And it was only a soft prediction anyway, forget it. Let's move on. Let's move on and talk about rents. So we've talked about house prices. We wanted to know what rental inflation would be in 2025. So let's hear what we said. i've just got down that rental inflation will be higher than general inflation so wherever general inflation is rental inflation will be higher i've gone for four percent which i think is probably a little on the low side boom i was right

9:55yeah congratulations you're extremely safe and wishy-washy prediction has turned out to be bang on to be fair to me some of my predictions previous to this one had been very bold so i was allowed a safer one and look plain safe paid off this time so i'm happy i needed it rob yeah and i'm just bitter because i was not right i said four percent and the actual was five so i think the context for this coming into january was we'd been coming off this period of crazy rental inflation like double digits you can see on the monthly numbers that rental inflation was coming down it was just a case of how far down it would come.

10:30And in the end, not quite as far as I thought, but 5 % rental inflation in the ballpark and higher than general inflation, as you said. And yields continue to improve this year. Yields were good last year, but yields this year are really attractive. And this will lead into our predictions for next year because property on just a numbers play is becoming more and more attractive. This isn't really talked about. Rental inflation is high at five percent but because it's not a double digit levels we've seen in previous years it's not really got that attention but that's still a strong number and because of that returns in certain areas are very attractive right now and it will also be helped rob with interest rates coming down and borrowing costs coming down and we of course made some predictions about interest rates so we know they're down but did we get it right i feel like i'm playing it pretty safe by saying that there are going to be two base rate cuts.

11:30And I'm assuming that each of those will be a quarter of a percent. So that would put us at 4.25, if I'm correct. You're in my range, which is it will finish between 4 to 4.5%. Oh, I'm on fire. Well, once again, your vagueness paid off. I'm on fire. Let's go. Yeah, so you said 4 to 4.5 and the actual was 4. So you were correct. I've been punished by specificity once again. I said that there would be two cuts. There have actually been three. So it ended up being a mere quarter of a percent out. But again, close enough. And I think we should have expected to be close here because that was always going to be the direction.

12:11Rates were always going to come down. They were never going to plummet or go up again unless something totally dramatic and unexpected happened. So it was just a case of exactly how much. I think you were right. I was close, but that's how it should been. It's a really interesting landscape because property investment now on paper is a stronger proposition than it was a year ago. We've not seen that reflected in house prices, but as I touched on earlier, rents are up and borrowing costs are down. So the landscape for property investment going into 2026 is certainly more compelling than it was 12 months ago.

12:42So again, I'm really interested about what we'll predict for next year, because while sentiment isn't there, the fundamentals for investment are. So is that mismatch and what will happen? Well, we'll talk about it in a few weeks. But of course, we stray beyond our realm of expertise or our perceived realm of expertise. And we make predictions about other areas of the world, including the stock market. And each year we make a prediction on the FTSE 100. So let's listen back to what we said about the FTSE, what will happen. i'm gonna say the footsie 100 will break 9000 for the first time what i'm going for a binary up or down on this one and i'm going down not a lot down i think maybe just very slightly but i'm going down from its current level oh i'm absolutely loving this episode i'm absolutely loving it this might be my best year yet i think it might be this is incredible so yeah you said it would break 9 ,000.

13:43At the time of recording in early to mid-December, it is 9 ,667. And for context, at the start of the year, it was 8 ,260. So the FTSE is up 17 % this year, which is actually more than the S &P 500. Everyone thinks the US market is super strong, the AI boom, all this stuff. The UK at the time of recording has actually performed better throughout this year. I'm just going to keep on spitting out facts like this because I want to detract from the fact that I got it completely wrong and said it would be down but well done rob that was not an obvious prediction at the start of the year but you got it bang on there you go being bold occasionally does pay off right it's all going to be in bold bitcoin that's an interesting i was going to say what asset is it an asset well many would debate but we're not going to debate that what we are going to do is listen back to what we said would happen with bitcoin this year i believe that it will be at least 40 % higher than where it is today.

14:39Today it's at 93 ,000 US dollars. I believe at some point it will be 40 % higher than where it is now. So I'm going to be less bold and just go close above 100 ,000. My goodness you've very nearly done it again. So you said it would be up 40 % from what it was at the time we recorded last which was 93 ,000. It didn't go up 40 % but it did go up 34.5%. So, so close there. Very close. But let's face it, while you could argue all of what we do is guesswork, with Bitcoin, it really is. It's such a volatile asset. Imagine making a prediction with any other asset class saying it's going to grow by 40 % this year.

15:19Nobody would take it seriously. But the crazy thing is, predicting that Bitcoin could go up by 40 % at the beginning of the year may have been a little bold, but it wasn't a crazy outlandish prediction because Bitcoin is crazy and outlandish in the way it behaves. So up by 30 odd percent, didn't quite get there. But it's absolutely mad how close it got because 40 % growth in one year is a nuts prediction. And of course, now it's down on where it actually started when we made this prediction. So it's all over the place as an asset. It is. At the time of recording, I'm wrong because I said it would close above 100 ,000.

15:54But I could easily be right by the end of the year. By the end of the day. Yeah, we could be back and forth across that line 10 times by the time the year actually ends. So believe it or not, Bitcoin's volatility is actually falling over time. With every passing year, as it gets more adoption, it is becoming less volatile as an asset, but starting from a extremely volatile base. So still seeing 30 % swings is something that Bitcoin is very used to. Like you say, imagine if it happened in property, we'll be freaking out. But let's move on to our final prediction, the one that is the absolute furthest from my comfort zone the premier league i think liverpool will hold on i don't think it will be by a huge margin by the end but i think they will hold on to win the league i really hope so i'm outsourcing my predictions to polymarket and according to that liverpool has a 72 chance of winning so i'm with you in your prediction that liverpool are going to win i'm also going to predict that southampton are going to be relegated to the 94 chance of that apparently and either Mo Salah or Haaland are going to be the top goal scorer.

16:54So I'm feeling super confident in my Premier League predictions, despite the fact I know absolutely nothing about football. But the markets are speaking and I am listening. Well, I'm delighted, Rob. Absolutely delighted to say that both our predictions were right here. What a wonderful, wonderful end to the podcast. To remind everybody that Liverpool won the league last year. We won't talk about this year. You choose to focus on that. I'm going to focus on the fact I've got Liverpool to win, Southampton relegated, and the top goalscorer correct. That was because I outsourced my prediction to a prediction market.

17:26So maybe that's the real lesson for this year. Just let the wisdom of crowds do the work for you. I mean, saying that Salah or Haaland would end up being top goalscorer's prediction is like saying the sun will set the sea finger. I don't think that wasn't that bold, particularly we were a bit into the season at that point. See, I don't even know that. I barely know who these people are. I was quite impressed. I didn't know what a safe prediction that was. It may have actually been the safest prediction out of all the predictions we've done. I can be accused of playing it safe on a few of these, but that felt very safe partway into last season.

17:55But anyway, we were correct. And I'm very, very happy that we were correct about that prediction. So overall, there have been notable high spots like the cities and slightly lower spots like London. But I'd say as a duo, a pretty solid year. And for you in particular, a very strong performance. You definitely take the crown this year. Well done. Thank you. Call me Mystic Rob. Rob, I was clearly in a good place at the beginning of last year. I am already nervous about making next year's predictions. They are our most downloaded episode as well each year. So it's not like only a few people listen.

18:29So thousands upon thousands of people will listen to that episode again when we do it in January. I know you listening now will absolutely tune in. And why not? Because we've got a lot right this year. So hats on the back to both of us, Rob. I'm pretty happy. Okay, so we will do it again in January. Tune back in in January to see what our predictions for 2026 are going to be. But before we wrap up this episode, we've just got time for Hub Extra, the part of the show where we bring you a little bit more, some kind of tool, tip or resource to make your life a bit better. And Rob, I know from our conversations during the week that a past Hub Extra resource has pretty much changed your life over the last couple of weeks.

19:07And so you want to revisit it? I do, because I want to just make sure more and more people are using this Hub Extra, which was previously mentioned, as Rob said, but I've only started using it recently, and it is Whisper AI. It's spelled W-I-S-P-R, and it's Whisper Flow, actually, so it's Flow spelled correctly. The link will be in the show notes anyway. What is it? Well, it sounds incredibly basic, which is probably why it took me a little bit of time to pick it up, Rob, because when you described it, I was like, okay, yeah, that makes sense, but there are other tools that do this. what does it do?

19:39Dictation. You just press a couple of buttons on your keyboard and you dictate to it. You dictate your emails, your messages on Teams, whatever you need to send. You just dictate your message. It will tidy it up for you if you make a mistake, but you can also set the tone for where it's going as well. So if you are writing an email, you can tell it for all emails, take a more formal tone. If you are sending a message to a friend, you can tell it to be very relaxed in tone and then if it's for teams you can say somewhere in the middle. I like that, I like the way that you can set tones as well so it tidies up your writing and make sure the tone of what's written is appropriate for where it's being sent.

20:21I can't get over how easy it is to use. There are other platforms out there that have dictation, ChatwT has its own, Apple has its own, pretty much every other platform has dictation. Whisper AI just seems to have nailed it. It just makes typing now feel redundant to me. I don't want to type anymore. Even on my phone, I'm like, oh man, I've got to send a message. I don't want to. It's made me an incredibly lazy typer, but incredibly effective since I've started using it because I'm no longer procrastinating on certain writing tasks I need to do. I don't find that it's such a burden to complete certain aspects of admin where, again, a fair bit of writing has to be done.

21:02Rob, you are a writer i'm not a writer so to take away this pain point for me and to allow me to do what i'm doing now talk which i'm half decent and not have to do the typing part for me is a dream come true so thank you i wish i got onto it sooner because it sounds so basic i didn't but trust me dear listener use it that this is not sponsored of course you get a free trial to begin with my trial is nearly up but i tell you what i can't wait to give them my money it's absolutely brilliant. So a strong endorsement from me. And a little bonus, I've been using Claude a lot more recently over ChatGPT.

21:39I found ChatGPT to be a bit lazy in a lot of its responses, very basic as well. I've been using Claude more and more. I've upgraded to the premium version of Claude recently as well. Again, just because it seems so superior to ChatGPT. I'm using both, but when I'm testing across the two platforms, I'm finding Claude is outperforming ChatGPT for the type of tasks I'm working on. Well, there you go. It's probably been the year of AI for us. It feels like we had a good proportion of Hub Extra resources being AI related, but why not? As you've described, it's got the potential to make your life so much easier and so much better.

22:12Well, that is just done for this week. We made it through the review of our predictions, so we will be back next week. We may be closing in on Christmas, but we will still be here and there's still time this year to get things done. So thank you for joining us. We'll see you then. Bye-bye. Bye-bye.

22:30Thank you.