The Worst Places To Buy In 2026

0:00If you already own a property or two and it felt like a lot more work than it should have been, then you are not alone. We've seen a lot of portfolios over the years and what we've noticed is what separates the ones that work from the ones that don't isn't the amount of effort that someone puts in. It's the core approach that they take. The people who end up doing best in property have just got a few things right from the start and they've stuck with them. We've written all of this up into a free guide. It's basically our complete investment philosophy, and you can grab it for free at propertyhub.net slash strategy.

0:31That's propertyhub.net slash strategy. Hey everyone, it's Robby here with Robby, and you are listening to the Property Podcast. We've got seven areas for you this week that you should never invest in. Right now, this year, these places are absolutely terrible investment locations. Luckily, we're going to share them more today so you can avoid pain.

1:03Welcome to the Property Podcast. In case you don't know, we run a business that buys more than£100 million worth of property every year for our clients. You can find out about that at propertyhub.net slash invest. So of course, we are very interested in finding the best places to invest. But even more important than finding the absolute best is avoiding the absolute worst. The location is the one thing about your property that you can never change. So you don't want to be getting this wrong. So we'll be sharing those areas to avoid in just a second. First up, it's our news story of the week. And this week, big headlines from Mortgage Strategy website.

1:36And if that wasn't enough, Mortgage Finance Gazette have also covered this breaking news. We love a niche website. The rental sector in the UK has contracted by 48 billion in 2025. Rob we both agree that sentiment in 2025 was a pretty low point for buy to let in the UK but that's some number. It is and it's not because house prices have fallen it's because landlords are selling up so prices haven't fallen that houses haven't disappeared but they're moved from being in the rental sector to being owned by homeowners so this data from Savills says that owner occupiers have basically been the winners over the last few years.

2:20It says over the last three years the private rented sector has contracted it's decreased by 5.1 % despite the UK housing sector growing by 3.8 % overall. It's the only sector of the market that's shrunk and the commentary says that of the smaller landlords selling up some of it is being absorbed by larger landlords who of course are more professionalised better able to deal with the new challenges that have come along but a lot have been sold to owner occupiers. So Rob we've heard a lot anecdotally about landlords selling up but here it is in the numbers and it's far bigger than i expected it is but i think it's important to understand that the majority of these landlords are what we call legacy landlords because by to let the people who've been in it for a long time is much tougher now because they would have bought their properties in their own names from a taxation point of view it's not that attractive to do that anymore to move it over to a limited company is expensive to do and really not worth it in most certain senses so you can see why they'd exit.

3:14Plus, if they have been in it for a long time, they will be a bit older and they'll have a fair bit of money in those properties as well. So I think those landlords will continue to exit the market and I wouldn't be surprised to see a deficit again in 2026, even if property prices do quite well this year, just because those legacy landlords will still just take the money off the table. But I see this even announced over time because you've got investors coming into the market every year and there's only so many legacy landlords to leave. So at some point, that number will start to rise again, particularly as sentiment improves.

3:48So a big number, one that still surprised me, but the result that it's a negative trend right now, not surprising at all. Definitely not. And the thing, of course, that's been the straw that's broken the camel's back for a lot of landlords who've been in the game for a long time is rental reform. That's something that's been talked about for years and it's been grumbling about for years. But now, of course, it is finally happening. It's coming in in May. and I think the forgotten victim in all this Rob is me because I've had to go and completely update my book how to be a landlord to deal with all this but I have done it the second edition of how to be a landlord is out now I've completely rewritten large parts of it to bring it fully up to date for all the changes that are coming in and to celebrate its launch for this week only it's super cheap on Amazon so the Kindle version is 99p the paperback is as cheap as it will let me do it I think it's about eight pounds so I'm making no money on it it's just the cost of printing through Amazon so if you do want to grab that new edition of how to be a landlord and know everything you need to know to be ready for the Renters Rights Act.

4:40This week is the time. We'll put the link in the show notes or you can just go search it on Amazon. Over the long term, property is really forgiving and you can do very well through property if you just stay in it and persevere. But why would you want to play on hard mode? Why would you want to make mistakes up front? And one of the biggest mistakes that we see is that people just buying in areas that they really shouldn't. They're making investment decisions in areas that make you go into property investment on hard modes. You do not want to do that. We want to help as many people as possible.

5:11So in this week's episode, we're going to share with you the worst areas that you can invest in this year. Do not proceed until you've listened to this podcast. If one of the areas that you're looking at right now, or even in the process of buying in right now, are in this podcast, well, you may want to reconsider after listening to this week's episode. Let's start with one that may not be a surprise for many, but I know lots of people live in this area who listen to the podcast and that's the southeast of england if this is coming as a surprise you haven't been paying attention the southeast has been massively struggling for the last few years it's the worst performing region at the moment according to home track it's had 0.3 percent growth over the last year there are also cities within it like southampton brighton portsmouth where prices are actively falling and the reasons are pretty obvious we've covered them before this part of the country has already had its growth spurt it hit an affordability ceiling and then with mortgage rates going up as well, it just put the region under so much pressure.

6:08There's really nowhere for prices to go. All prices can really do is stagnate until wages go up and create some more headroom. And the critical thing is this isn't going to resolve overnight. So according to Savills, the southeast is going to have half the growth rate of the northwest over the next five years. So you put it really well, Rob, with hard mode. So sure, you go find an incredible deal. You can negotiate a great price and there will be deals to be done because lots of people are looking to get out of the southeast but still the market is just not going to be helping you out it isn't and you have to remember as well the impact of stamp duty in the southeast everywhere is pretty expensive there aren't many cheap areas in the southeast so stamp duty to just move home is prohibitive i know in the past i've considered moving home and i didn't because of the stamp duty well you have to remember there's an extra stamp duty surcharge with buy to let so that makes it even more prohibited.

7:03So the numbers are just not attractive at all. When you get in, you are paying so much up front to just get started. It will actually take some time before you break even just to pay for the transaction costs with your rental profit. So you really have to own it for a very long time before you start to see the wins. And yes, at some point in the future, the Southeast will make sense again as an investment, but not now. Another place that does not make any sense now is the southwest particularly coastal and holiday let areas. Now if you go back a few years the southwest was doing really well and that's because during the pandemic and just after it Brits flocked to the beaches the countryside there and investors saw an opportunity and piled in and lots of holiday lets were brought up in that area.

7:54Prices did spike and short-term lets absolutely boomed and for a short period of time people made some great money there but COVID ended people started to go overseas again let's face it the weather is much better and suddenly there was a glut of those properties in the market and they are coming back onto the market all the time which is really suppressing house prices in those areas the other thing you have to remember with the southwest is the fundamentals that we talk about on this podcast all the time aren't really that strong there so when you consider like does it have really strong transport links.

8:28A lot of places in the southwest don't have good motorway networks, never mind good trains. So the fundamentals like transport, big employers, yes you could point to a few but there are many many areas across the country that you can say well it's stronger on nearly every level when you look at fundamentals. So we've suppressed prices, more stock come into the market because the people exiting holiday lengths in that area, the lack of fundamentals. for me rob the southwest is arguably worse than the southeast because at some point in the future i could seem be making investments in the southeast if the opportunities were right because the fundamentals are great particularly if you are commutable to london but the fundamentals unless something dramatically changes they're not there with the southwest so for me not only does it make the list this year i could see this making the list every year from now on yeah i feel duty bound to say it's a beautiful part of the country.

9:21It is. I don't want anyone spitting in my clotted cream next time I go down that way. But the point is that, yeah, it's true from an investment perspective. And obviously, there are people who make investment work here. If you've got a strategy that is more hands-on, then you need to be closer to home. If you know your area inside out, you've got a really great system for doing your refurbs and all the rest of it. Obviously, you can make an investment work in this area. But what we're saying is if you could pick anywhere, which as a long-term buy and hold hands-off investor you can because proximity doesn't matter, then why would you choose these regions when there are so much better choices out there?

9:55Now the next one hurts because I do love a bargain, but the next area to avoid is not a whole region. I think we've offended enough people for now. It's places you'll find dotted all over the country, which are ultra cheap towns. So we're talking about the type of place where you can pick up a house for£50 ,000,£60 ,000,£70 ,000. You'll see it on Rightmove or Zoopla, you'll work out the yield it's double digits and you'll get really excited this is amazing i hardly have to put much of a deposit down i'm going to be collecting so much rent now i can speak about this with authority because i've made this mistake before and i can tell you that the problems start very soon after you take ownership normally the housing stock in these areas is not particularly well maintained it's not particularly modern so immediately you're uncovering problems that you weren't expecting and you hadn't factored into your numbers and then when you go to rent it out, there's the issue of the tenant profile.

10:42Now again, making giant generalizations, but in the types of areas we're talking about, you tend to get tenants who aren't the most financially secure and tenancies can be harder to manage. Especially if you get areas that are highly reliant on universal credit, then just the nature of the universal credit system and how it works means that you are far more likely to get arrears. And again, Rob, it is possible to make money in these areas. People do it. But it should be seen, I think, as something very specialized that's not for everyone you said this is painful for you rob it's really painful for me because i've made this mistake and i've still got some of these properties in my portfolio that at the first opportunity i can i will exit i'm just waiting for the market to be a little kinder because the problem with these areas is that the last areas to rise as well from a capital growth point of view so when the market recovers the best areas move first with capital growth and then eventually it finds its way to these cheaper towns as well.

11:38Now, we've talked about the monopoly strategy a lot on this podcast, and these are some of the early properties that I purchased many, many years ago. And I can tell you, the capital growth on these properties has been truly horrendous. And you're right, they can come with problem tenants. One of the things that really annoys me is that you can have 10 good months, and then suddenly there's a problem with that property, and your rental profit for that year is wiped out or the majority of it because your rent isn't that high so if a boiler does go that's your rental profit gone in more than one year i've used these properties to offset profits because these properties have made a loss yes because of the problems that these properties have stored up and i've had to pay for they've lost money i've used that to help me with my tax bill that's not a good strategy that might sound good but that's you don't want to buy properties just to lower your tax bill because they're going to be that bad.

12:34So I really do think that you should avoid these properties because I've felt the pain and I do not want you to feel it too. And we get this type of question on Ask Rob and Rob a lot, like should I wait and just build that deposit a little bit higher before I move forward? And the answer nearly, not always, but nearly is always yes. Because remember, if you're using a mortgage, if you could save another 10 grand that allows you to buy a property with 40 grand higher because you're leveraging at 75 most of the time so for every pound you save as a general rule of thumb buy a property four times that that's why you should keep going because soon you will move into a category of property that does become attractive the next one rob is not the entire city because we actually think there's opportunity ahead which will be another episode completely with this city but there is absolutely a type of stock within this city that has been hammered over the last couple of years for many reasons well actually much longer but particularly the last couple of years and it's going to take a while before it becomes attractive again and i do think a bit like the southeast it will become attractive again but right now it's a sinking ship yes we're talking about prime central london so where we and the industry talk about prime central london We're talking specifically about the likes of Mayfair, Knightsbridge, South Kensington, areas like that that tend to be the very most expensive.

14:03You're typically looking at the most expensive 5 % or so. And that's the most expensive 5 % of London, which is already expensive. So this is not somewhere that most listeners of the podcast will have as their core area. Because you're talking about millions to get into this area. But you're increasingly able to buy in at less and less because prices have fallen dramatically. practically prices in prime central london have fallen by 24 since 2014 they've fallen by a quarter that's unbelievable and you might think oh great now's the time to get in then no you're catching a falling knife even in 2025 prices dropped by another 4.7 percent now at some point that will create an opportunity but if you look at the reasons that this has happened rob so again taxes mortgages and especially the exodus of non-doms and wealthy people who used to be the prime targets for this area who are moving abroad, it's hard to see that changing anytime soon.

14:54It really is. And this is the part of London that gets all the headlines, which is why I alluded to there might be opportunity elsewhere, because this is talked about so much that everyone thinks London is completely dead as an option. And understandably so, because these properties are so expensive to begin with, a reasonable percentage fall is a huge amount of money in notes i'm in a lot of whatsapp groups with entrepreneurs and they're from all over the world and including some of those who've exited the uk and it was staggering last year how many people in whatsapp because that's how desperate they must have got had prime central london property and they were asking like does anyone know how it connects is this who's best to sell it does anyone want to buy it they were up for doing a deal but like you said rob you don't want to catch a falling knife it's got further to go but if it's made of my whatsapp groups those people trying to sell you can see how desperate things have become so prime central london is definitely one to avoid and we're feeling generous rob or maybe we're just like picking on areas but we've got a few other quick ones to add in so they're the main ones they're the main four but we've got a few others that will quickly reel off that you should be very wary of if you're considering investing there yeah so the first one probably again won't come as a surprise to regular listeners but scotland sorry scotland actually have a lot of love for scotland but do not have a lot of love for the scottish government the story of the past five years or so has just been more and more regulation very confusing regulation at times and now with the new housing act that they're going to bring in with rent controls both within and between tenancies potentially it is just so landlord unfriendly that is why the big institutions are pulling out of scotland it's why the number of landlords is shrinking and so said it before about other areas we'll say it Again, you can make it work there.

16:39People do make it work there. But for me, firmly in the too hard pile. So that's one country eliminated. The next thing I've got in my notes here, Rob, is overseas in general. Well, we've put down a lot of places, Rob, so let's take on the rest of the world. It's not that we are crazy and we think the UK is the only place to invest in the world. But again, this is a mistake I very nearly made and I was lucky I got out of it. And we're talking many, many years ago now. we're probably approaching 20 years ago, where I nearly invested overseas. And actually, I knew that market really, really well.

17:12But I witnessed so many people investing overseas. We're talking about the last boom when lots of people were piling overseas, investing in areas that they just didn't know or understand. And just because the property was going up, they thought that was a good bet. But the legal systems, so different. Taxation, so different. the way the markets can operate in different countries again it's not always up and up and up some areas are suppressed in terms of property prices for good reason so the advice here is just do not go overseas lightly to invest if you've been on holiday somewhere a few times that does not make you an expert in that local market of course this excludes expats who live in those areas who've got to know those markets or maybe you've got family from there or used to live overseas.

18:02So you know those markets really well. But it's the way some people invest so aggressively and lightly and in such a cavalier manner when things are so, so different. Yes, it's property. Yes, it's a home. But besides that, everything else is very, very different. So do not fall in the trap of feeling, oh, I'll make a bit more of an exotic investment because it feels exciting. It might be more exciting, but after you've owned it for 12 months, it may feel like an adventure you did not want to go into. Yes, so rare to see that end well. A lot, a lot of horror stories. I think you're lucky, Rob, to get out of that when you did.

18:37But let's bring it back home to round up this list of areas to avoid. And this category is what we're calling specialised areas. So these are locations that are very strongly dependent on one particular sector or one particular employer. So the most obvious example here is Aberdeen. Aberdeen is its own property market because it is so dependent on the oil market and the price of oil. Its cycle is completely disconnected from the rest of the country. It's absolutely wild. So you can do really well in Aberdeen, but you're basing that on predicting the oil price rather than property prices. So it's very, very specialist.

19:10Then you've got places like Sunderland, which is very dependent on car manufacturers. And then you've got Barrow & Furnace, which is almost exclusively dependent on one big employer, BAE Systems. And that just, of course, means that if anything happens to that employer, if they pull out for any reason, something crazy happens, then suddenly the whole area is so much weaker. You're going to get a big spike in unemployment. It's going to be really tough. And there's not a lot you can do about it because you can't pick up your property and move it. So that's why, Rob, location is everything. And at the moment, location is so easy.

19:40It's great if you can find the next secret hotspot. But even if you just get the right quadrant of the country right now, pretty much the right half of the country, then you're putting yourself at such an advantage. You are. And I could list them off. It won't take long. Northwest, West, Yorkshire, Midlands. There are great places to invest there right now. That's where we're investing all the time and our clients are too. And we're all doing very well off the back of it. It's not rocket science, but yet some people choose to play the investment game on hard mode and it will take many years for you to undo those mistakes.

20:12So please do not make them in the first place. Right, it's time for Hub Extra now. Rob, you've dropped in before that you've updated your best-selling book, How to Be a Landlord, because a lot has changed in the world, so it needed updating. Well done for persevering through that. But also, well done for slashing the price in week one and making it really accessible. I think that absolutely has to be our Hub Extra. If people haven't got it already, those prices, you know, Kindle for a pound. I mean, that's an absolute steal. Just get it done. It's a great Hub Extra. If you have not read that book yet, I'm sure many people have read most of your books, but if you haven't got that in your collection this is the week to get it thank you yes you can find that on amazon and the link will be in the show notes but that is us done for this week thank you for joining us we'll be back to do it all again next thursday and in the meantime if you're not already signed up to property pulse our free newsletter that goes out on a friday make sure you do that it's packed full of everything you need to know loads of good stuff just go to property hub.net slash pulse to sign up but until we see you next have a great week bye-bye bye-bye