The hidden landlord shift (this data shocked us)

0:01Hey everyone, it's Rob B here with Rob D and you are listening to The Property Podcast. This week we get into data that you've not seen elsewhere that goes against your belief systems, our belief systems and everybody else's. But once you understand it, the confidence it's going to give you as an investor, the insights that you'll get from it to be more effective, to double down on your path already will be incredible.

0:30Welcome to the Property Podcast. Thank you for joining us. In case you don't know, we run a business that arranges more than£100 million worth of property transactions for our clients every year. You can find out more about that at propertyhub.net slash invest. And today we'll bring you data that will come as a surprise to you because it came as a surprise to us and we spend all day every day immersed in this stuff. So stick around. It's time for our news story of the week. And this week's news story comes from the NRLA, which for those who don't know, and I didn't, so I looked, is the National Residential Landlords Association.

0:59I've always referred to the NRLA, but now I and you know. But more importantly, here's what they're talking about. And the headline of this week's story reads, Struggling Tenants Risk Being Locked Out of the Rental Market. Rob, what's happening? Yeah, so this is a survey of their members, and they found that 78 % of their members are likely to be more selective about who they rent to. Now, the Renters' Rights Act has passed, which kind of makes you wonder who's the 22 % because of course you're going to be more selective but they talk about those who are going to be the hardest hit which is not surprisingly people who are on unpredictable incomes international students we've talked about those a lot as well and those who are on housing benefit something else that gets mentioned which i hadn't thought of before but makes sense is that it might be harder now to get a guarantor because all tenancies are open-ended you're not just guaranteeing someone for the 12 months it could go on forever which means that being a guarantor is more of a commitment.

1:53So where all this leaves us, Rob, is predictably landlords have fewer powers. They're less certain about the actions they'll be able to take if something goes wrong. Therefore, they zero in on the safest possible applicants. But the needs of people in all these other categories who might be perfectly fantastic tenants, but whose profiles look a bit different, haven't gone away. So I don't know if you can even call it unintended consequence because it was just always so obviously going to be the case. It's a typical government policy. I use government broadly before people think I'm bashing labour.

2:25This is not a recent phenomenon. Something is introduced and the consequences of the policy just not fall through. It's well-intentioned what's happened and what's changed. I have no problem with that. I think the Renters' Rights Act overall is a good thing. I do believe that tenants should have better rights for the home they live in. It's a home, remember, so much more than other goods and services. It's something that's really important. And allowing people to feel like they've got security and able to live in that home is a good thing. But like so many policies, property or not, the causes and effects of that policy just aren't thought through.

3:03And like you say, Rob, it's not like this is four steps down the line and wait a minute. Ah, this could then have a negative effect for this subsection of people. It's really obvious. I personally won't take a view anymore. I've been burned in the last 12 months by a tenant that I did take a view on. So I'm particularly sensitive to this. And whether the Renters' Rights Act or not was coming in, I would have taken this view. I've always gone with, oh, let's give people a chance side of things. And I was royally screwed by a very sophisticated, clever and malicious tenant, which I will talk about in the coming months.

3:40and that has put me in a position where I will no longer take a view but now with the way the things have gone like why would you gamble Rob it's just not worth it and the other consequence of this is it'll just be the properties that are neglected that people have not put money into that may be willing to accept these cents so the quality of homes available to these people they may struggle to get a home but then that what's left will just be the stuff that nobody else wants no i think it's exactly right the quality point is an important one but i also agree with you that i don't think that means that renters rights was a mistake while i certainly don't agree with every last detail of it broadly i think it's was the right thing to do but what this shows i think is this is only part of the solution you can't at the moment i won't don't give them ideas you can't force landlords to take on literally anyone and you can't force landlords to stay in the business if it doesn't make sense for them anymore so if there's no interest in increasing supply there's no interest in social housing which has been completely ignored by just about every type of government for as long as i can remember if none of this is happening and all you've got is renters rights then yeah i think you've managed to solve a narrow category of problem but you possibly made some other problems worse what would need to happen for me is some policies something introduced to protect or incentivize landlords but i nearly couldn't finish the sentence there but that's that's not going to happen this is not going to happen even though privately you could probably get a politician on board with the concept of that and they would understand logically why that would be useful or needed for the balance to work politically they're just not going to do it and that's the problem with the whole system right is people make political decisions because they think it will be popular and win votes and i could go on i mean rob we won't even get on to today's episode if I start on listing off the stupidity of some of the things that we've introduced in the last decade which politically sounds good but practically it was an absolute stupid idea but that's that's the thing right that's the problem with the whole system I think I'm going to stop you can carry on Rob but I'm on the verge of doing a two-hour rant here so I won't go on about my views on the political system and how it's failed our country as a whole let's not let's save that shall we maybe save that for a very distant day because it's going to upset a lot of people if we ever do a last episode i'll just rub full bias on it yeah exactly but let's move on to our main topic which is very much related actually because we've got a mystery to solve rob we need to figure out what's going on because a piece of research came out recently from hamptons we touched on it in a news story recently but we figured it deserved a deeper dive so we'll start with the unsurprising bit which is landlords are leaving and that is true it's around about 93 ,000 last year it's meant to be about 100 ,000 this year landlords are leaving because of the Renters Rights Act among lots of other things and yet according to this research from Hamptons the proportion of property purchases that are by landlords has just reached its highest since 2016 its highest so landlords did make up 9.9 % of all purchases now it's up to 13.3 % and the reason it's surprising is it's the highest since 2016 because that was when the stamp duty surcharge was first announced so the surcharge that we have which is now five percent it was introduced when it was three percent and it was introduced back then and even so as many landlords are buying today as they were back then and this goes against everything that we talk about how we feel the audience right everyone at rob this data shop does you know some people put to us sometimes that we're optimistic we have a positive view of the market but we've been very clear recently that Over the last four, five, six months, the market in terms of sentiment has been rock bottom.

7:34It's not been in a good place. Last year was a tough year for the property sector. Yet, this data has come out to show that people are ignoring the noise. And it won't be just all this. I know many of them are active and that's amazing and I hope more continue. But there's a lot of people here. There's a lot of people that are being very active in a market where everyone's talking it down. And I don't mean just like mildly talking it down. The whole economy is being talked down. The property market is being talked down. We've got the Renters' Rights Act coming in. But yet, we've got all these people either expanding their portfolios or coming into the market for the first time.

8:15And I would not have guessed this. If you said, what's the number? I would have said a decline. I think the huge proportion of the people listening to this podcast would have also said it as well. They may have been the smart money thinking, okay, I'm part of that smaller section that still is taking advantage of this. Because that's the thing, right? People can take advantage of this sentiment. And that's something that we've talked about. I've talked about my recent investment. So it is an opportunity as well. But it's hard to act that way when there's so much negative sentiment. But clearly, people are acting that way.

8:47And in parts of the country, it's pretty unbelievable the proportion of purchases that are by landlords. So, okay, there are probably fewer transactions happening, right? Because of that sentiment, as you mentioned, people are less likely to make that leap and become a first-time buyer or trade up. But even so, the proportion of buyers who are landlords in the Northwest is 25%. A quarter of all buyers in the Northwest are landlords rather than only occupiers in the northeast it's 23.8 percent in the west midlands it's nearly 15 that's huge and that's massively up as well from 2025 and obviously as you'd expect in london and the south those proportions are far lower makes sense but one in every four buyers in the northwest is an investor i'd never would have got anywhere near that number no but even the fact that london's gone up a little surprises me and in making up 10 of all purchases you wouldn't think anybody would be active in London because of all the negativity that's been surrounding the capital.

9:46Yet, even London's reasonably resilient. But Northwest, one in four, that's crazy. That's a wow number. Because the thing about the Northwest, right, is that it's affordable compared to the South. When you look at wages versus property prices, it's affordable. It is. That's an unpopular thing to say because everybody has the belief that property is overpriced. And you're allowed to believe that, but the data shows that it's more affordable now than it has been for a long time, particularly in places like the Northwest and the Northeast. So you would expect the owner-occupier market to be more active because of that, but it seems like the negative sentiment has hurt those areas as well.

10:28They're not looking at the opportunity to buy a good home at a good price, and investors, at least some investors, have gone, well, I will then because the prices are great, Affordability is great. So long-term capital growth prospects are strong. And yields are getting better and better. And that is reflected in those numbers. But we're not talking, you know, it's gone up by 5%. It's doubled in the Northwest. It's doubled. These are big numbers. They are huge. And it seemed completely out of whack with what you hear about landlords are exiting. But it's not that that's not true. It's just that's not the whole of the story.

11:06So one group of landlords is exiting. they definitely are 100 but another group of landlords is entering we see this all the time we do business with a lot of them and another group of landlords again is scaling up and you can see this if you look at the proportion of landlord purchases that were previously let so obviously some investors will buy properties from homeowners who are moving on are selling for some reason or maybe it's in probate but some proportions are buying from other landlords so the property that's already being let maybe it's coming with a sitting tenant maybe it's not by the way immediately before this purchase it was rented out now the average proportion that landlords are buying in this way from other landlords is 9.9 percent that's the average proportion between 2019 and 2023 according to this hamptons data last year 2025 that jumped right up to 16 and this year is made another huge jump year to date 23 so again a quarter of all landlord purchases are from other landlords so obviously that means the majority are moving over to owner occupiers which is probably kind of what the government wanted notwithstanding all the inevitable consequences of that which we talked about earlier but even so rob over the course of two years we've gone from one in ten properties being bought by landlords from other landlords to nearly one in four yeah i've got a friend um antonio this will be a test to see if you listen And he has a business which is that thing, which is taking stock off a landlord's exit to the market and selling them to landlords who are either expanding or entering the market.

12:42And he's got a great business and it's thriving and he operates it in the Northwest. So he's clearly in the right place at the moment. But the point is that there's a business that he's put together, which is doing really good numbers because this phenomenon exists and it's getting stronger. And why is it getting stronger? We've thrown things around like smart money, but what makes money smart? Well, it's seeing opportunity. And this is, again, something that we've talked about on the pod on and off for a while now. But even if you don't believe in capital growth, property's getting to a point that you just invest on yields.

13:17That's not been the case for a long, long time, but it's now becoming the case so i'm saying it but let's look at the data so yields in 2022 were 5.7 but on average and that's the uk average but now the uk average is 6.7 these are gross yields now as i've said the 6.7 that we have today which is very strong is the national average but that's an average and a lot of people are going into places like the northwest the northeast the midlands where you will do better than average so those numbers could be in the sevens and that is huge here's the thing right and this is again something that we talked about on the podcast to help you think more than just transactional think where this could go and you know the economics of it all because if yields are that attractive and continue to get more attractive then people will start to come into the market just for those yields which i've said already but people who haven't had any interest in property will go wait a minute i can get seven point something percent in manchester or liverpool well i'll have a bit of that i don't really care about property normally but that yield is very attractive.

14:40And they may have no belief in capital growth, but what happens is when people start to come into the market because they're attracted by the yields, prices start to go up. And then yields will start to come down again. But because prices are going up, that then attracts more people in. So you could see a world, and I'm not getting carried away here. I'm not saying suddenly property booms happen the next week, but you can see a world where yields carry on for a while because sentiment is so poor. But then that starts to flick and yields will start to come down a bit, but property prices go up because the market's so active because people are going, I want a piece of this.

15:18And we're starting to see that in areas like the Northwest where one in four of transactions are landlords already. And I wouldn't then be surprised if the market wants sentiment just to prove slightly. I'm not saying suddenly everyone's giddy. The market improves slightly. Other occupiers come back stronger. More and more investors are coming in. These are the regions that you would see the capital growth first. The Northwest, Yorkshire, Midlands. These are the places, because of these strong yields, that you can see that playing out. Rob, I'm jumping into the future now, but I love going big picture and seeing where these things are going.

15:55So many people obsess on the micro, and I get that, right? You know, your deal's important. All that type of stuff is important. But the part of property that has always fascinated me the most, always, is the macro. Like, what's coming next? The unspotted opportunities. That could be with regions, areas, or the economy as a whole. That's the heart that excites me. And that could be the beginning of that story. And you could see why it would play out, because it's logical, right? I'm not saying it will, but it's logical how all those steps could play out. You could definitely see it happening. I think you've obviously got the question of when, which I'm not even going to attempt because who knows, the timing of a call is the hardest point to get right.

16:35So let's just not even try. But also how far will it go? Will Biteslet become a popular mainstream investment again? That's an interesting question. It does feel like we've been on a journey for the last 10 years and we've now come back to the same point. If I think back to when I was first starting to get interested in property, you're looking at yields in the sevens and mortgage rates in the fours and the fives and that was normal for you. Then we had a boom, prices went up, therefore yields came down, but mortgage rates came down too. So I was like, okay, that's all good, no problem. Then we had a couple of really nasty years where mortgage rates were higher and yields were still lower.

17:07But now we're sort of back to where we were in the first place again. And those 7 %-ish yields were attractive to people back then. Byte-to-let was a mainstream investment. Will it get back to being that way? That's what I'm not sure about, because quite a few things have changed in that time. As we talked about before, you do have to be objectively now more sophisticated. For most people, you need to be buying in a company. And for most people, you need to be getting some degree of scale over time to make the extra effort and the extra overhead of a company worthwhile. But also sentiment wise, there's been such a change in sentiment towards property, not just over the last year when everyone's been talking about the rental stuff, but over the last, I don't know, five years or more, people's views on property have changed and this whole default that we used to have of like, I've got a bit of money, let's put it in property.

17:52That's certainly not gone away, but it's not the obvious default it once was. So I don't know, but it makes me wonder, are we going to have another mainstream buy to let boom one day? I'd say not to anything like the same degree that we've had in the past, but that doesn't mean that property investment is going to be less attractive than it once was as an asset class. I just think the participants are going to be different. I think lots of more, I don't know using the word, but sophisticated investors are going to find it extremely attractive. They're going to be spotting what we've been talking about, and they're increasingly going to be moving in.

18:24But my best guess, Rob, is that that's going to happen under the radar. I don't think we're going to get back to the mid-noughts where property prices are on the front pages. I think it's going to be happening, but I don't think everyone's going to be swept up in it in the same way. That's my best guess. I think that's a fairly reasonable guess. And also, that's what would happen first. If it went onto that next stage, you'd have the stage you've just described first anyway. It wouldn't just go zero to a hundred. It might feel like that when the hundred happens, but the in-between stage where opportunity is more obvious to more people, that would happen first before it went onto that levels.

18:59And I think it's worth saying as well that the rents are still rising. So those yields that we've talked about being attractive, they continue to be on the up and the data shows us that as well. And that was also included in this report from Hamptons as well, which we'll link to. I think overall, Rob, what we have here is fascinating data. It's not often said that, is it, in the sentence. But it is fascinating data. And it goes against, as we said already, how most of us feel. Even those of us who are active right now, which we are, it still feels like, wow, I can't believe this is the case. It makes sense on a logical level.

19:41you can understand why it's happening but because there's just so much negative sentiment you wouldn't expect that there's that much smart money out there and you know it fills me with joy that there's so many people in the uk who are switched on who are taking advantage of things and this touches on a theme again something that we've talked about over and over again is get beyond the noise the media sentiment what your friends say down the pub or your local part of the club or wherever you like to hang out socially or they are talking about them not in this world is probably doom gloom everything's ruined and if you even dared to share you know some of your dreams aspirations ambitions for property and beyond they probably think you're a bit mad because you're very much going against the grade at the moment but this should give you comfort that you're not alone.

20:34Far from it. There's a trend that's moving in the other direction. It's a quiet trend. It's a switched on trend, but it is there. People are active. The numbers are in your favor. So don't worry. You may seem mad to the majority, but you're also part of this quiet, switched on money that's making the most of this opportunity that's out there right now. And I think that's reassuring for those people that you may feel lonely at times. like the podcast you're not all in one room listening together i mean there needs to be a big room but you're not so you're just listening to us in your ears talking about this but you should take comfort that you are not alone there are many others active right now and they're seeing the same opportunity you are well rob there's another opportunity that not everyone is participating in equally at the moment which is ai something else that we've talked about a lot i'm going to talk about it again as part of hub extra and this is actually a tool that we've shared in the past but I've been making even more use of it recently and I think it's got better so I want to resurface it which is Notebook LM from Google.

21:37So the thing that's unique about Notebook LM compared to using ChatGPT or Gemini or whatever else is that you give it a list of sources which can be documents, YouTube videos, anything you choose and it will chat to you just about those documents. So it's not going to go off and find its own resources or make stuff up or have its best guess. It's very much grounded in what you give it so that's useful in itself but the truly standout part of it for me is the assets that it can generate off the back of it so you can have a chat about what you've given it but it can also in one click produce a presentation a mind map a quiz an infographic a podcast with two people talking about this subject and after being away for a few months and coming back to it the quality has taken a giant leap the quality of the presentations it spits out the quality of these podcast episodes is unbelievable so i wanted to at it again, Rob, because such an incredible tool and such a superpower when it comes to learning anything.

22:31If there's anything at all you want to learn about, you don't need to restrict yourself to text anymore. You can just chuck out a load of resources, get it to make an audio for you you can listen to in the car, get it to make a presentation for you, get it to test your knowledge with a quiz for any topic you want to learn or go deeper into. I just think this is unbelievable. I thank you, Rob, for bringing this on back because I played with Notebook LM a lot in the past but i've not used it as much recently even though i've been using google gemini there's a google art behind notebook and they have really come on with their whole ai package that's probably the biggest undersell ever it's phenomenal what they're doing and what they're building and how it's progressing and i've been using the gems i've talked to rob and put pastor down about it recently and I've plugged all my health data in there.

23:24So I've talked about in the past how I've got blood tests and that's been really interesting to put all that information into AI and analyze it, but not just get surface level AI data, use Google Gemini's deep research. So settle deep research with a gem, with your medical data or whatever you want to really get into and then have the ability to just keep asking questions is just incredible, incredible. I can't tell you the stack change in level of feedback and data and information that I was able to extract from it. I think the pub extra here is if you haven't played around with Gemini sweeter tools, whether it's Notebook, whether it's its gems and all the other things that it has as well, check out Google Labs.

24:13It sounds like I'm all over it. They've got so much that I still got to really spend even more time digging through but it's just such a great investment of your time it really really is it's so good and rob i've not been in notebook for a while now so i appreciate the nudge for you telling me to go back and have a look i've already got the tab open i'll be there later today have fun i know you will because i know how you love researching your topics and this is just like the perfect perfect tool for that so that's all done for this week really hope you enjoyed this episode i think our most important episodes are the ones where we don't necessarily tell you step by step how to do something but bring something that you won't have seen all over the bbc news and social media that probably doesn't get you thinking in a bit different way but like rob said earlier reinforces that you're not going mad you really are on the right track so i hope you found it useful and we'll be back here to do it all again next week we'll see you then bye bye bye