TPP642: Market Update - July 2025

0:02Hey everyone, it's Rob B here with Rob D and you are listening to The Property Podcast. It's the July market update. We've got loads of information to bring you. I was stunned by some data out of London. I mean like really stunned and you will be surprised as well. And I'm going to be telling some of you off about EPCs and you will need to listen to that.

0:25Welcome to The Property Podcast. Thank you for joining us. In case you don't know, we own a business that buys more than 100 million pounds worth of property every year for our clients. You can find out about that at propertyhub.net slash invest. And this is the episode where we bring you up to date. If you've paid no attention to what's going on in the property market this month, do not worry because in 15 minutes or so, we're going to give you everything you need to know. So let's kick off this month's market update and let's start where we often do with house prices because everybody wants to know what's happening with house prices.

0:54up down in between rob seems a bit of a mixed bag this month let's start with right move and there's been a bit of an unusual movement with asking prices in the last month there has they're down only slightly down the down 0.3 percent but that is unusual because you don't normally get prices dipping in june and they put this down to basically the amount of stock it is very much a buyer's market at the moment buyers have got more choice than ever because if you remember there are a few years when basically everyone was trying to do nothing and just sitting on their hands and waiting to see how things are going to play out.

1:23Now, people who want to move, people who want to sell are confident enough to do that, which means the market has become flooded with stock, buyers have got loads of options, and that means that sellers can't get overly optimistic with their pricing. And that's why, in the opinion of Rightmove, we've seen this very, very small dip. The real story for me here, though, is, as ever, the north-south divide, because, of course, that is an average across the country. And as they say, when you look at the data, what you're really looking at is drops in the south and increases in the north. Listeners of this podcast are probably bored of hearing this pattern by now because we've been talking about it for so long and it comes up all the time.

1:58But I think it is massively consequential as an investor because the difference in likely returns based on where you invest is so stark. And I think this is still underappreciated by people at large, like people who just got a general casual interest in property. I think it's only listeners of this show who are plugged into just what a massive trend and theme this is at the moment. You're right, Rob, but that's why this next news story is a bit of a shock to me, this one. And it's proper data. So the data that we have here is from the Land Registry and EONS. And this data reveals that house prices in London jumped by an unexpected 3.3 % in the year up to April.

2:37Now, that alone isn't that shocking. Okay, it's maybe a little higher than many of us were the first guest. It's not a massive number, but it's the contrast of house price growth and house price falls within London that I think is incredible. And I can't remember seeing data like this in London before, because what we're seeing is house prices in some areas of London up by over 10%, but also in other areas down by over 10%. So I'll give you some of the regions. Lewisham is up by just over 10%. Bromley, 9.8%. Barking and Dagenham, 9%. Massive, massive house growth. Don't take those numbers lightly.

3:18They're huge numbers. So why is the overall average so low? Well, because then you've got areas like Hammersmith and Fulham down by 11%. Islington down by nearly 10%. Newham over 5%. So you've got this real contrast. But they're not the biggest. The city of Westminster and the city of London both recorded even larger price falls of just over 15 % and over just over 14 % respectively. That's crash territory. But this is all within one city. I mean, what a story this is, Rob. You've got one city where you've got double digit growth and also double digit falls. And what's super interesting is there's a pattern and a theme to these areas.

3:59The cheaper, more affordable areas are the ones that are going up and the prime more prestigious areas are the ones that are falling and actually if you get into what's been happening in london a bit of exodus of wealth over the last 12 months you can see why those more prime areas have really been suffering but lots of people are still coming into the country and lots of people still want to live in london so you can see why the i mean i can barely call it affordable but affordable by london standards more affordable areas are pushing upwards yeah it's the same pattern really isn't it it's the same as the general north south pattern but within the capital prices are rising where there is capacity for them to rise and there are other areas that just hit the ceiling of what they can do and because the number of transactions at a borough level is smaller the data is more prone to these big and dramatic looking swings and i'm sure that is exacerbated as well by the fact that in certain of those areas like you say you've got very expensive properties at the top end and the people who would normally be owning those properties are showing less interest in living in the uk at the moment so that can produce some dramatic results.

4:59And speaking of dramatic looking results, our next headline is from Money Week, which says that the number of million pound homes for sale has doubled since 2019. If you look at that headline, you'd think that the market was absolutely on fire. Everything's rocketing up in value, especially in places like Cornwall, Somerset, North Yorkshire, which has seen the biggest increase in the number of million pound properties. But to me, this falls into the category of story that is far less dramatic than the headline makes you first think. Because if you had a property that was worth£800 ,000, then about 3.5 % annual inflation compounded over the last six years would get you to a million.

5:32So these areas, being more expensive areas to start with, probably had a fair number of pretty ordinary in the scheme of things properties around the£800 ,000 mark. And therefore, just the kind of normal inflation that we've had over that time has pushed them over the million. So even though this list is dominated by areas like the Southwest and the Southeast, I don't think that takes anything away from the broader pattern that we saw earlier. The fact that for house price growth, the north is still where it's at. Let's move on to rents now. And there's an interesting theme developing in this podcast, unintentional, but when you look at it, you can see this pattern emerging.

6:05The main story here in the status from Hamptons is that demand in a rental sector is cooling and inquiries, number of registrations by tenants is down by 17 % from last year, and now running 28 % below 2019 levels. Now this article goes on to say that with interest rates coming down and rents been pushing up the last few years that more and more people attempted to buy and that is one of the reasons why the numbers are down. But again it's this tale of two halves and it's the more affluent areas that have really impacted this number because that's where the biggest falls have taken place. In fact in affluent areas rental demand or rental registrations has fallen by 50%.

6:50The more affordable areas are performing a lot stronger and the more affluent areas are struggling. So it seems that the whole market is looking for value now, whether it's for rent or buying. We've seen that reflected in house prices across the UK. We've seen that in London and we're also seeing that in rental appetite. What does that tell you about the general economy? I'll let you decide. But it's interesting to see this pattern emerge between all these sets of data. A similar story, but with some bolder words from the latest Zoopla rental market report, which states that the rental boom is over.

7:25And by recent standards, it is. Over the last 12 months, average rents for new tenancies have only increased by 2.8%, which is a way off the crazy numbers we were having in 2022 and into 2023. And again, the areas that put on the biggest increases will not come as a surprise. Places like Wigan, Carlisle, Chester, Blackburn, all up there. and the fastest growing region is the northeast which again very much falling into this pattern is one of the cheapest areas it's where prices have the most headroom interestingly though if you go to the ons data from this month they have rents increasing by 7.1 over the last 12 months which is much higher and i think this can be accounted for by a difference in the methodology because zoopla only look at newly advertised rents whereas the ons looks up within tenancy rent increases so if you agree a rent increase with your existing tenant that never hits zoopla they don't know about it but it has happened and the ONS gets wind of this and includes it in their figures.

8:19So the fact that we're seeing the ONS figures being higher suggests to me that we are seeing faster rent increases within tenancies and that's pushing the overall number up which would not be a surprise at all because another trend we've seen over the last couple of years is landlords playing catch up who've not increased their rents for years then as their costs have gone up they realise that they really should be and they've looked at the market rent and what they could be charging and pushed it up and of course with rental reform on the way more on that later, they're thinking, well, it might not be so easy to increase rents in the future, so better do it now.

8:49So I don't know, the ONS report doesn't talk about it, but I would assume that those are the drivers of within-tenancy rents going up by so much more. Let's move on to mortgages now, and good news for those who are after a buy-to-let mortgage. Something we've reported on before in our mortgage market update is that there are more products coming to the market, and that trend is continuing. It's a great news for buy-to-let investors. the number of mortgages available now or products if you like has reached 4 ,144 which is the highest count since at least November 2011 according to Landlord Today.

9:24And in further good news the average buy-to-let fixed rates for two and five-year products have both now fallen for the fourth consecutive month. This is great news for investors Rob because while rents may not be rocketing on as we've heard as before and probably that's a good thing because it was in boom territory so now it's just that steady growth what we have is rates falling instead so we had one driving force to make investments look more attractive that's cooled off but now with interest rates started to fall and it's not aggressive but it's trending in the right direction that is still making yields attractive in certain parts of the country it's funny isn't it over the last few years you kind of ended up in the ideal investor scenario in that we've had this big correction in interest rates.

10:07The worst version of that could be house price collapse, everything is devastation. But instead, we had the silent crash that we've talked about many times. So no one taking a real terms hit, yet prices have still come down. You've had rents going up dramatically to really blunt the impact of those interest rate increases. And just as the rental market is cooling down, interest rates are coming back down. So okay, it's not quite the glory days of 2 % mortgages. But if you had to get from the twos to the fives, it's probably the ideal way of getting there. So life is looking pretty good for investors.

10:34What could possibly go wrong? Oh, rental reform. Yeah. So rental reform is still going on. I can't believe you've left it this long, Rob. You've left your favourite subject this far into the podcast. You've been very disciplined. I know. I wanted to save a little treat for you near the end, because I know how much you love this topic. But in bad news, for people like you who just want the whole blooming thing over with, it looks like we're dragging on into the autumn or maybe even the winter, maybe even early next year, so we can keep on talking about this subject. It's great for content. I mean, you've got to thank them for that.

11:03It is great for content. It's a gift that keeps giving. but as an investor i also just want the whole thing over with now but it looks like it probably won't become law until after the summer and then by the time it's implemented it'll be late in the year maybe early next year but because it just keeps on dragging little changes keep being made new points keep getting debated the latest one is that the government has tabled a new amendment that means not only will you need to accept pets you now won't be able to insist on pet insurance previously that was something they put in there to soften the blow a little bit or make landlords feel happier about it, saying that tenants would have to pay for pet insurance.

11:36Now, they've taken that one out. So I don't think it's a particularly big deal. It's not going to change anyone's decision making. But it's just another example of this saga just rolling on and on. I suspect, like all these things, and we've seen it many times before with other topics, it seems super dramatic. Everyone gets very hit up about it. There will, of course, be a period where everything's a mess and you have to make some pretty major adjustments. But life will go on. So if only so we can stop talking about it. I'm looking forward to rental reform coming in, and Rob, I'm sure you are too.

12:04I want to bring some energy to the end of the market update, but don't go away just yet because we have a hub extra coming your way. But before we do, let's talk about EPCs. EPCs? You may not be interested. Well, that's the point, because this article again from Landlord Today says that two-thirds of landlords are unaware that having an EPC is a legal requirement and landlords ignorance may hamper government energy goals. So according to a poll of a thousand landlords nearly two-thirds are all aware that having an EPC is a legal requirement. If you are one of those podcast listeners well let's move that ratio you do need one and by 2030 with some exceptions but by 2030 you need your property to be at least a C rating and currently only a third of landlords knew that was the case.

12:52So consider yourself informed everybody. If you are one of those landlords that knew what was happening, well done to you. But now we've spread the word a little bit further on and if you meet anybody else who invests in property, you can chat about EPCs as well. It may not sound the most exciting subject but that's the point because it's not exciting. People aren't recognising what needs to be done. So if you have older properties in your portfolio, you need to keep an eye on EPC rating and if it is below c you may be required to do something as i said there are some exceptions there and we have talked about it in the past and you'll all be pleased to hear that i'm not going to go into masses of detail to end the podcast on the epc exclusions requirements and so on but there's plenty of information out there we'll link to some of that in the show notes so you could do a bit more research but if you do invest in older properties you do need to pay attention to this well if you can bear the excitement that at some point we might do a full episode on epcs when it all becomes a bit clearer.

13:46Because at the moment, there is a whole load of rumour and supposition and no one knows what this deadline is really going to be or what's going to happen. So at some point, we will need to give EPCs the full treatment. But today is thankfully not that day. We've brought you up to date with what's going on in the market. Let's now bring you Hub Extra, that part of the show where before we wrap up, we try to bring you a little product, a tool, something to make your life a little bit better. And Rob, I believe you've got almost an anti-recommendation this week. Yeah, so I thought I would try and be clever because I've recently talked about the wonderful Sony headphones.

14:16I've got a version of them, Rob. You have as well. They're a great product, great sound. And if you want headphones for your music or podcasts, go and check Sony out. Well worth looking into. But I thought I'd carry on. When I needed to replace my Apple AirPods, I thought, well, wait a minute. I've done well drifting away from Apple before. Let's have another look. So I got myself on the old internet. I did a load of research and I purchased what I believe to be a very good set, possibly even better than the Apple AirPods. I'll cut to the chase. It's not better. Not only do I not like them as much, and I may have just been unlucky there, I'm really missing the ecosystem of just jumping between device to device.

15:02I'm fully Appled up, whether it's the desktop, laptop, iPad, iPhone, I've got the lot and jumping between them is so much harder and I do more calls with earbuds that I've really noticed that it's not been fun it's not been enjoyable so in terms of the quality of the product I felt Apple was better but missing that ecosystem as well I feel that I've tried to save money but actually I've ended up costing myself so my recommendation is if you are used to using Apple you will be disappointed if you drift away yeah I held out against Apple as you know, Rob, for such a long time because I didn't like the fact that it was a closed system.

15:39Once you're in, you're locked in, you don't have control over the software you use and all the rest of it. But I think Apple is like Singapore. I didn't think I wanted to live in a police state, but it's really clean. Everything's great. I don't get hassled. It's the same kind of thing. Everything just works. And I had something go wrong with my phone the other day. So I booked an appointment in the Apple store for the next day, got a fix for free. Everyone's super nice. It was a great experience. It was just awesome. So Apple are not paying us for this feature. I doubt they'd be very interested in chucking any money the way of a couple of small podcasters, but it gets our recommendation nonetheless, because grudgingly, it really is that good.

16:11Rob, they're not going to send us anything if you talk like that. So, Tim Cook, if you're listening, we have hundreds of thousands of property investors who download our podcast every month, which is true. We can back up with data. If you'd like to finish us with your wonderful goods, then we are more than happy to receive them. And we are sellouts. We will take your mattresses. anybody listening who sells mattresses or you've got any nice pillows whatever like we'd love some freebies so feel free to send them on our way in fact rob we've had our first freebie sent to us recently and we're both using that product and we'll talk about that soon it's been a milestone in the podcast journey of over 10 years of podcasting we finally been sent something 12 years rob not that we're counting not that we're bitter but yes it's true we'll tell that story maybe next week but for now that is the end of the show thank you so much for joining us thank you for listening really appreciate you being here and you can join us again same time next week and we'll do it all again until then have a great week bye bye bye