"The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics." - Thomas Sowell
This quote is going to be needed more and more as we approach the next election, with both sides (or more accurately all sides) now making promises that no-one can keep in the remotely long term - imprisoning us to higher interest rates going forward.
As the calendar advances through the Golden Quarter, our next Property Business Workshop is live and tickets are already selling. This is about structure, and exit - yours, and others. No exit plan? You go out one way or another. Things have changed, as well, with pensions being brought into the scope of your personal estate. What does this mean for SSAS - according to people that use them, but don’t sell them - an objective viewpoint. Book in on the next Property Business Workshop with myself and Rod Turner - Wednesday 22nd April - Central Manchester - www.tinyurl.com/pbwten
Trumponomics - and the ceasefire (as it is being called) has dominated headlines of course. The facts: 2 weeks from 7th April. Pakistan were key mediators. The “pause” means no airstrikes from the US or Israel, and no missile or drone attacks from Iran. Hormuz, it was agreed, could be re-opened - the closure of which, let’s face it, had been underestimated by the Trump administration (it’s not clear to me, or many commentators, whether it was clear to Israel - I am not going to speculate).
Here’s the unsurprising part - Mr Trump’s take on what’s happening is different from the other side. Iran has claimed a huge diplomatic victory, as they have put together a 10-point proposal that the ceasefire “agrees to”. There’s word of a toll, $1 per barrel of oil payable in crypto, for every barrel travelling through Hormuz, to an IRGC-linked intermediary. Trump is busy saying “this better not be the case”.
This is, by any sensible measure, not an “end” point. It is highly unstable. Israel most certainly did not agree with the broader interpretation that this included Lebanon as part of the ceasefire, and launched a huge attack on Wednesday this week, killing 350+. There is the usual difficulty of establishing how many of the dead were militarily involved (Hezbollah in this case). At the broadest level, Iran sees Lebanon as part of the ceasefire, Israel doesn't, and this could be the point of disagreement that collapses everything.
The longer this goes on, the more it becomes clear I think that Israel’s goals here and the US’s goals are really quite different - and that puts significant tension on such an alliance, to say the least.
From the market’s perspective, crude went from $112 to $94 on the announcement of the overhyped “deal”, the “best deal ever”, etc. etc - still very much elevated (and closing the week at $96) because of the lack of stability here. Likewise, yields reacted downwards (more on that later on!). Insurance is still so high, and these tolls are being refused leaving goods stranded. When traffic does start to flow (whenever that is!), that will be another drop in the oil price of course.
Tariff reshuffling continued on with changes to tariffs on the full value of imported goods using steel, aluminium and copper. The UK has a special exemption IF 95% of the metal contained in any product was smelted, cast, melted or poured directly in the UK.
The OECD forecast that US inflation would rise over 4% this year, due to tariffs (and in no small part due to the impact of oil prices, of course). Meanwhile, Mr T claims to have “won affordability”. Tiring, isn’t it?
Meanwhile, Keir is “fed up” with families and businesses facing economic instability at the whims of Trump and Putin. Well, that’ll sort that out then, won’t it Keir? What are you going to do about it, to quote the vernacular?
The special relationship is in the toilet - not quite round the U-bend, and I hear plenty in podcastistan that sounds like people praying for a poor mid-terms result so that the Prez becomes a “typical second-half of second-term” neutered president. I can’t see that being the way he wants to go out though, can you?
We retreat, geographically lucky as we are, once again to the safety of the UK real-time property market. Chris Watkin’s analysis/roundup of week 13 of the UK Property Market was talked through with a truly spectacular guest this week on the Property Market Stats show - yes, OK, it was me - the video is also available as a collaboration on the Propenomix YouTube channel if you want to check it out: https://youtu.be/a31zmlIkQIo . Chris “runs” Sunday to Sunday, so this was the week ending on Easter Sunday, 5th April. Anomalous since we didn’t outrun 2025 listings - but this wasn’t Easter week in 2025 so don’t read too much into that - we weren’t far off and are still ahead of 2025. What we know is that there’s extra stock on the market - it must be landlord disposals - but we don’t know exactly who is buying them, although first time buyers are especially active and there’s only so many houses, of course.
Remember only a little over HALF of what’s listed actually sells (unbelievably) - so my personal theory is that a lot of this ends up getting re-let after it doesn’t sell, which is why total rental supply is moving downwards but not crashing, overall (plenty of ex-rentals are also being bought by new entrants to the market or larger, existing companies). Right now, with yields elevated again, those facing refinance soon (remember these borrowers, if they were on 5 year mortgages, were pretty much at the “nut low” on rates and 30% or so of them, in my estimate, will be genuinely surprised when they go for a mortgage quote at the moment…..also - with so many first time buyers - are there fewer actual RENTERS out there? That’s a tough one to answer with official data, but it is a reasonable hypothesis (which also depends on net migration numbers). We do know demand is down - and with more FTBs, and fewer net migrants, it is a zero sum game ultimately.
Gross sales are at 321k SSTC YTD, 6.2% higher than 2024 but 6.2% lower than 2025. 15.3% ahead of the 2017-19 pre-covid market. The lack of that 31st March deadline, the urgency, and the time pressure looks sure to wash out by the time we get to the end of H1 of this year - because we know that last year’s figures had a peak and then a trough, as you always do around a stamp duty change/hike. Easter has made a difference. April 2026 should be drastically superior to April 2025 - we know that - let’s see when we get to the end of the month. The reason why pricing is sideways is because there is just so much supply, but transaction numbers still look very healthy indeed. Functional. Prices dropping in real terms (after inflation). Affordability improving. Everyone is happy (although those of us who benefit significantly from capital growth would mostly prefer it was faster, of course!).
Net sales are also 5.9% ahead of 2024, at 192k. 12.3% ahead of the 2017-19 market, and 18.8% ahead of 2023 which as we know was “limp lettuce” territory all year. 3.6% lower than 2025, though, with reference to the above caveats.
To start April there ended up, once again, being a 10-year+ record number of homes on the market (for an April, to be clear - we haven’t yet ascended or beaten the peaks set in 2025) - 717k thanks to this record Boxing day and solid Q1 for listings - 2025 Apr 1st saw 706k OTM, so it is 1.6% above that - moving forward.
Sales pipelines are now 2% below where they were 12 months ago. At the end of March 2026 agents had 453,043 properties sold subject to contract - that compares to 460,965 at end Mar 2025, 404,923 at end Mar 2024, and 487,714 at end Mar 2022.
Reductions were 20k for the week, 13.2% of stock was reduced in March, compared to the 2025 average of 12.8% (and the longer average of 10.74%). The fall-through rate is nice and low at the moment; 21% in week 13, (longer-term average 24.2% - all far too high of course, but all numbers have to be looked at in context of the “norm”). There’s usually fewer fall-throughs at this time of year though - nothing looks out of kilter with the norm (you certainly wouldn’t know there was a war going on).
March ‘26 saw sales agreed averaging £345.64 per sqft, 2% ahead of a year ago. Much closer to the current ONS numbers. This number is only 12.7% ahead of 5 years ago - March 2021 was really accelerating very fast in terms of pricing and a huge slice of that 12.7% happened in that one year. We will keep monitoring but there is a lot of volatility month to month of course. Exchanged prices were well below this for the month - £338.40 psqft, which is a big move down from £348 psqft in January. Let’s not read TOO much into one month’s figures though, as I always say - that particular graph is always noisy - even with 100k transactions a month, things don’t quite smooth out as easily. The £345.64 is a new record high per square foot, although we nearly got to that price in the first half of 2022.
Easter means that the weekly comparable data is less trustworthy (as will this week’s be, with Bank Holiday Monday) - but I will leave in my conclusion paragraph from last week because I think it is important and in case anyone missed it.
In the round, there’s really no sign at all that anyone can see that the war has wobbled the market in any way, shape or form. Rates are worse than they were - but not worse than 2023-24 by any material way. They are just at the high end of the range, right now, that they have been at since the 2022 clettuceusterfudge situation (not sure that one will take off). We are looking at petrol and second order consequences and are not happy, but the impact is minimal at the margin on the average household budget. The bottom 10-20% are perennially in trouble, and it DOES hit them harder at times like this - but everything does. I hope that level of detail adds value - it certainly makes me feel like I’m as well informed as I can be.
Chris - this is my weekly appreciation paragraph. Thanks for what you do! If you want some help positioning yourself as a local market expert - as an estate agent or any form of property professional - give Chris a shout! Either way give his channel www.youtube.com/@christopherwatkin a follow and some love, please!
Macro-time and this week we get the final PMIs which are a must-include, The Halifax House Price Index, and the RICS Residential Market Report. Those three pick themselves. Then we have the gilts and the swaps, as usual (that slot isn’t going anywhere before 2030, you can guarantee that).
PMIs - real-time economic information. No surprises in here - worse than the flash numbers predicted, as the war rolled on throughout the month. Basically - something goes wrong, people and businesses freeze. It’s fairly rational. It’s also easy to do. Put it off. Put off those big decisions. Resulting headlines?
For services: Weakest rise in service sector output for 11 months. Decline in new work. Input price inflation highest for 11 months due to surge in fuel costs. Business optimism falls to its lowest in 9 months. On Construction? The downturn continues, led by a sharp drop in housing activity. New orders decline at the fastest pace since November 2025. Rapid acceleration in input cost inflation (again). How about Manufacturing? Production falls for the first time in six months as input price inflation spikes and supply chain stress grows.
Exactly what you would have expected, really. The numbers? Manufacturing still printed 51. It’s been a miracle for it to be above 50 for years, so in context - not so bad. Input price inflation is a 41-month high - not good given recent inflationary times. Suppliers’ delivery times lengthened to the greatest extent since mid-2022. Last month was 51.7 and the flash estimate was 51.4.
Services printed 50.5, crashing down from a really positive start to the year and February’s 53.9 print. The composite reading was 50.3, mostly because of construction continuing to drag the numbers down. The flash services estimate was 51.2. The overall conclusion from the Economics Director - cutbacks in business and consumer spending. Stagflation risks increasing (by definition, this is right - prices up, and growth down). The overall impression is that this affects the next 12 months (or so). How will the ceasefire stick (and these were gathered and written before the ceasefire, of course)? It will make all the difference, in both input prices and confidence, of course.
Construction - woes continued with the numbers. 45.6 was the print. 15 months in a row below the 50 handle. House building printed 38.2. Civils 44.8, commercial construction 47.1. The Economics Director describes the other two sectors as “resilient”, but only talks of “steep reductions” in residential work. Total new orders in March decreased at one of the fastest rates in the past 6 years (and it's been quite a 6 years, if you haven’t noticed…..). Input cost inflation at its highest for more than 3 years.
In all of these you see the real impact on the ground of the supply chain and the price changes - but ultimately, you see sideways, not recession as some clickbaiters and doommongers immediately predicted.
Will the Halifax House Price index cheer us up? Not really. The biggest divergence from the Nationwide Index for many a month - Nationwide printed +0.9% as a reminder, Halifax says -0.5% and an increase of merely 0.8% on the year. Credit here to the Head of Mortgages Amanda Bryden who points out, as the Nationwide did, that the recent increase in UK mortgage rates has been “more modest than the sharp rises seen during the mini budget of 2022”. Her conclusion? Taking all this into account, house prices may prove resilient, even if uncertainty weighs on market activity in the near term.
As per most sensible commentators, she draws the parallel between the length of the war and the severity of the consequences - and as per other reports, this was written before the current (fragile) ceasefire. She paints a picture of first-time buyers sitting and watching rates - there’s a systemic issue here that is specific to the current war and corresponding yields which I wanted to address, and I’m going to do that here.
In recent years I’ve been very specific about what I think, trying not to sit on the fence unless unavoidable. In 2022 when I broke many of the mortgages I had at the time, and fixed them for 5 years based on the risks to the upside - I ended in a much better position than I would have been if I had let them simply expire “normally”. In only a couple of pockets (the actual mini-budget and immediate fallout itself, and the 5% yields of the summer of 2023) have I suggested waiting for a few weeks before “taking a rate” and getting on with fixing a mortgage.
I’ve banged this drum a lot because I’ve been out there, meeting people, many of them experienced and with large portfolios, who have been sitting on variable rates of 7%+ “waiting for mortgage rates to go down”. To me, it has been clear this would be mathematical suicide - not a single one of them had modelled what rates would need to go down by, and when, in order for that to be a profitable strategy. This is the third time since 2022 that I have felt a pause for some weeks might be a good idea before taking a rate. This (in this instance) is because of the sharp rise in yields on the back of the war, and how the yields could come down relatively quickly (not necessarily as quickly as they spiked, but 5-year yields have not been as impacted as the 2-year yields have been).
This is where I want to talk about how this translates to an average first-time buyer. FTBs are keen users of 2-year products. When you buy your first house, there’s normally an aspiration to move relatively quickly, when you can afford it - and, being honest, a lot of FTBs are overoptimistic about how quickly that might be able to happen. Right now, the stress test on a 2-year product is being carried out at about 7.5%, compared to 6.5% in February 2026. On a 5-year, it is being carried out at the pay rate - so, it’s still moved up from 3.75% to 4.75%, but obviously that’s a much lower rate to be stress tested at.
The stress test is - in my view, although I struggle to articulate how I would go about proving this viewpoint - a larger blocker than the rate in and of itself. What I would say is that people are much more likely to look at “What will it cost me per month” than build a spreadsheet considering the interest rate percentage, and the interest they will pay on a mortgage (anyone who has scrutinised a mortgage document will be heavily depressed by the amount of interest they are expected to pay over the term of a mortgage - they then consider inflation, and rent, and capital growth, and move to a place where they can get over that fact!).
So - the problem, temporarily, is more in the stress test than the interest rate (although the two are of course related). But - my point is - if you want to shut the laptop and re-open it when oil and other products start flowing through the Strait of Hormuz again - I wouldn’t blame you. Permission to wait, rarely given in the supplement! Until when? Well - guess what - I’ll report back!
Where Halifax is much closer to Nationwide (back to the report), is on the regional pricing. Northern Ireland is +8.7%, Scotland +4.4%, but the North East is in front of Scotland at +5%. The North West moderated to +3.1%. They have London down 1.2% and the South East down 1.9% year-on-year - so there’s a really sizable divergence in the North-South figures that really labour the point I’ve been making for several years.
This drop in the Halifax monthly index takes it back to October 2025’s print, pretty much, for the index - no progress forward in 5 months (or, more accurately, the reversal from the South is balancing out the growth in the North, broadly speaking).
OK - on to the RICS residential market report. The headlines - particularly the first one - won’t surprise anyone. Rising borrowing costs knock buyer demand and sales values. Aggregate house prices seen softening, they say, with near-term expectations pointing to further modest declines in the months ahead (bearish as usual). The outlook for the next 12 months? Flat prices (now that one I agree with, but again, geographically what does this split down into? 2-3% in the North/Midlands and -2% in London and the South East - very possible.
Now the bits we should listen to ourselves, in terms of the numbers in the survey. -39% the print for new buyer enquiries - the lowest print since August 2023 (when the yields had been at their peak). However, they talk of a decline over the past “couple of months” - meaning it isn’t all war-related. This is where “noise” kicks in and the prevailing political narrative (blame the war, blame the US) that we will deal with now for the next 12 months at least - is not the full story, necessarily.
The agreed sales balance has dropped to a print of -34% which again is the worst since the summer of 2023, and this dropped from -13%. This has not borne out in the Watkin figures - which is why I looked at them so very closely - is it possible that the survey is ahead of the real-time data? I can’t make sense of that. I do often think in these situations that the RICS survey is too biased to the South of the country, and that’s the more realistic interpretation because the real time figures have simply not borne this out.
Near term sales expectations dropped from -4% to -33%. The 12 month moved to -1%, which probably speaks to some short-term bearishness on the back of the war, compared to the next 12 months. The point one could draw from the survey? This will pass relatively quickly.
Many who have struggled a bit more with voids over recent months will be pleased to hear that +10% was the balance in tenant demand, compared to -25% for landlord instructions as supply continues to drop (and in the real world, Openrent and similar are taking more and more business from traditional agents - so that impacts the survey). +29% see higher rents over the near term, up from +20% - and recent market data that we have been considering across the in-house portfolio would most definitely support that (and a bigger difference than that, to be honest).
Onto the conclusion from the gilts and swaps, then. No surprises - when Mr Trump didn’t go ahead with “bridge and power plant day” (he must have some obsession with naming days around April that simply don’t do what he said they were going to do), then Wednesday’s gilt yields opened nearly 0.25% down first thing. Since then, however, yields have drifted back upwards, and so in the second short week in a row, we opened at 4.386% and closed at 4.367%. The thickness of a piece of paper. The 30s actually drifted 5bps on the week from 5.461% to 5.51%, so the yield curve got a bit steeper this week.
The 5-year swaps dipped, very briefly, back under 4% although they closed Friday at closer to 4.07%. Still - much more under control than some recent weeks, and the best guess at the cost of debt with this more stable market (all relative, remember) will have the lenders a bit more comfortable with having products out there rather than “guessing” and simply putting out products at rates that people aren’t going to take (they do this rather than offering no products, which sends a different message to the market and their ultimate funders).
No black armbands - not a lot to report. Watch closely, because the next big event in the bond markets is when traffic starts to flow through the strait - that may well not be this week, of course!
Moving to the deep dive - as always, four reports or publications of interest for the week. I haven’t looked at anything from the Joseph Rowntree Foundation for some time, and so their report this week “Addressing the 2026 energy price crisis” - which, of course, is relevant for tenants aside from anything else - makes the first slot. There is a piece from the Resolution Foundation about the falling birth rate - a problem only really 15 years old in the UK, they claim - and one that often captures the imagination, that I’ve included as well as a long-term issue for many reasons, but future tenant numbers being one of them. I then take the microscope to Savills Housing Market Update for Q1 2026. In closure, I look at the recent Glenigan report on residential construction in Birmingham being set for a boost.
First up - what do the JRF say in their report about energy prices for households?
Theme 1: The Macro Catalyst and Energy Price Shock
The Summary: The global energy landscape is facing a severe shock triggered by the US-Israel war with Iran. Wholesale gas prices have surged by over 65% in recent weeks, exposing the UK's continuing reliance on expensive, imported gas. Consequently, households across the country are bracing for a significant financial blow when the new energy price cap is introduced at the start of July. Forecasts indicate a potential £288 annual increase in average domestic energy bills. Beyond immediate household costs, there is a risk that this energy inflation will spill over into wider markets, driving up the cost of goods and services across the board. Even before this latest geopolitical spike, household energy debt had already doubled to £4.5 billion, leaving millions vulnerable to further price increases.
The Propenomix Perspective: Let us cut through the noise - we are looking at another massive structural shock to household cash flows. A £288 hike might sound manageable to those sitting in Westminster, but in real terms, this strips vital liquidity right out of the consumer economy. We are already seeing the underlying fragility in the property market, where stretched affordability meets stubborn gilt yields. If energy costs start dragging headline inflation back up, you can bet the Bank of England will sit on their hands regarding base rate cuts, keeping SONIA swaps uncomfortably high. The state's fundamental failure to build resilient domestic energy infrastructure means every geopolitical flare-up directly hits UK tenants and homeowners. Property investors need to factor this into their stress tests immediately, as tenant arrears are going to climb if this inflation bleeds into the broader high street.
Theme 2: The EPG Hangover and the Targeting Trap
The Summary: Following the previous energy crisis, the Government introduced the Energy Price Guarantee (EPG), which capped annual bills but cost the public purse £23 billion. This intervention subsidised all consumption above the cap, which inadvertently gave more money in cash terms to higher-income households as they typically consume more energy. Furthermore, it removed incentives for wealthier demographics to reduce demand or invest in low-carbon technology. The current Chancellor, Rachel Reeves, has ruled out universal support on this scale. However, solely targeting support via means-tested benefits misses nearly 40% of households that are struggling to stay warm. Alternatively, targeting support via household income would require complex, currently non-existent data-matching infrastructure between HMRC and energy providers, which is not feasible for this winter.
The Propenomix Perspective: The £23 billion EPG was an absolute masterclass in fiscal inefficiency. The state essentially wrote a blank cheque to heat the swimming pools of the Home Counties, while simultaneously spiking the national debt. Now Rachel Reeves wants to target support, which is economically sensible, but the state lacks the basic plumbing to actually execute it. The idea that the government could swiftly build a functional HMRC data-matching system by winter is laughable - they can barely process Land Registry updates on time. The reality is that the middle classes are getting squeezed yet again. When 40% of households struggling with heating are not on means-tested benefits, you realise the affordability crisis has well and truly breached the middle-income dam. For landlords, this means the 'professional' tenant demographic is feeling the pinch just as hard as the lower-income cohorts.
Theme 3: The Universal Discounted Block Proposal
The Summary: To bridge the gap between expensive universal subsidies and complex targeted tariffs, the Joseph Rowntree Foundation proposes a universal discounted block of essential energy. This model would offer a set amount of energy - indicatively 50% of typical annual usage - at a discounted rate, with any usage above that threshold charged at market rates. The design includes a per-child consumption allowance and specific carve-outs to ensure households on means-tested and disability benefits receive the discount on all their usage. Modelled at a cost of £5 billion, this approach matches the lower-decile relief of a traditional Energy Price Guarantee but distributes support far more progressively and efficiently. It can also be implemented using existing consumption data currently held by the government and energy suppliers.
The Propenomix Perspective: I actually have some time for this idea. Instead of throwing good money after bad, this block-pricing model places a floor under absolute poverty while keeping the marginal cost of energy high for heavy users. That maintains the essential price signal to insulate homes and upgrade boilers - something the property sector desperately needs a nudge on anyway given the looming EPC regulations. At £5 billion, it is a fraction of the cost of the old EPG, which means less borrowing, less upward pressure on gilt yields, and ultimately less interference with the broader mortgage market. However, do not be fooled by the neat £5 billion price tag. If wholesale prices remain permanently elevated due to the geopolitical situation, the cost of subsidising that 'essential' block will inevitably swell. It is a sticking plaster, albeit a clever one, over a gaping wound in our national infrastructure. To be clear - I’d use this when it was clear that something absolutely needed to be done - probably August, or thereabouts, or even an early budget - before the heating needs to go back on - not now.
Theme 4: Systemic Failures and Political Fallout
The Summary: The ongoing affordability crisis is exacerbating wider political and social issues across the country. The constant struggle with high bills contributes to a sense among the British public that no matter how hard they work, they will never get ahead, forcing them to focus merely on surviving. This failure to reduce living costs fuels a perception that the government cannot solve core national challenges, driving a "roll the dice" attitude towards politics. Furthermore, the JRF notes that adjusting the billing system does not fix the root causes of the crisis. Without addressing high wholesale prices and the upwards distribution of profits to the top 1% of individuals, the fundamental vulnerabilities remain unresolved. Long-term resilience requires a systemic transition, including significant investment in renewables, to shield households from volatile gas markets.
The Propenomix Perspective: Here is the macro reality - you cannot fix a supply-side shock with demand-side subsidies forever. The sheer lack of long-term capital allocation into domestic infrastructure over the last two decades is coming home to roost. The report talks about 'sellers inflation' and corporate profits, which plays well to the gallery, but the real villain here is chronic under-investment and NIMBYism blocking renewable and nuclear grid upgrades. When people feel like they are working just to pay the utility companies, consumer confidence craters. From an investment standpoint, this "roll the dice" political mood is dangerous. It breeds regulatory instability - just look at the shifting sands of rental reform and property taxation. If the state continues to act as a reactive shock absorber rather than a proactive builder of infrastructure, UK Plc will remain highly vulnerable, and asset values will inevitably reflect that systemic risk.
How about the “reverse baby boom”? I’d be surprised if you haven’t heard about it, but does the Resolution Foundation report give us any extra insights or a look towards the future?
Theme 1: The Demographic Deficit and Public Services
The Summary: The UK total fertility rate has dropped sharply since 2012, hitting a joint record low of 1.6 children per woman in 2023, with projections showing a further fall to 1.4 in 2024 for England and Wales. Births have reached historic lows, with 2024 marking the second lowest number on record at 660,000. This continuous decline indicates that from 2030 onwards, deaths could consistently outnumber births. The societal implications are profound and wide reaching. An ageing population will inevitably drive up demand for health and adult social care, whilst simultaneously reducing the future supply of workers. Furthermore, a smaller working-age population will severely strain the public finances as pension and healthcare costs escalate. Conversely, plummeting pupil numbers are already presenting severe funding challenges for primary schools, particularly in Inner London where numbers have plummeted by as much as a fifth.
The Propenomix Perspective: We are watching a slow-motion car crash in the public finances, and the headline writers are still entirely distracted by the daily political soap opera. A fertility rate of 1.4 means the structural premise of the UK welfare state - relying on a growing base of young workers to fund the pensions of the elderly - is completely broken. I have been warning about the sheer fiscal drag of an ageing demographic for years. When deaths outstrip births by 2030, where exactly is the tax base coming from to support an ever-expanding state? The Bank of England can play with SONIA swap rates all day long, but monetary policy cannot print babies. Real estate investors need to pay close attention to these macro shifts. We will see intense local authority budget crises as they grapple with funding half-empty schools whilst social care costs explode. Expect higher council taxes and an even heavier reliance on net migration just to keep the economy moving, which will ironically keep demand in the private rented sector highly elevated.
Theme 2: The Non-Graduate Housing Squeeze
The Summary: A central driver of the recent fertility decline is the shifting housing tenure amongst young adults without a university degree. Historically, non-graduates had children earlier than graduates, but this trend has shifted dramatically in recent years. The proportion of non-graduate women aged 25 to 29 without a child surged from 33 per cent in 2011 to 54 per cent in 2023. This correlates directly with a collapse in independent, affordable housing for this demographic. The share of young non-graduates in the private rented sector has doubled over the past 25 years to 33 per cent, whilst the proportion living with their parents has risen significantly to 26 per cent. Simultaneously, homeownership for this group has halved to just 25 per cent. The high financial burden of private renting - alongside widespread housing insecurity - acts as a significant deterrent to starting a family.
The Propenomix Perspective: Here is the real meat of the report - the structural housing deficit is fundamentally reshaping human behaviour. The fact that homeownership for non-graduates has halved should send shivers down the spine of any policy maker, but it merely confirms what we see on the ground every single day. When your rent eats up a third of your net income, upgrading to a two-bedroom flat to accommodate a child is not just difficult - it is mathematically impossible for the median earner. Politicians love to preach about family values, but their abysmal failure to build homes and the resulting supply constraints have effectively priced the working classes out of parenthood. I look at the gilt yields and the persistent inflation in construction materials, and I see no immediate relief for the supply side. So, what happens? Young people stay in their childhood bedrooms or get trapped in expensive, transient private rentals. As investors, the baseline demand for single-let properties is locked in, but the societal cost is a generation that has been structurally impoverished by a broken housing market.
Theme 3: Economic Precarity vs The "Not Ready" Narrative
The Summary: Despite the falling birth rate, there is a widening gap between the number of children people ideally want and the number they actually have. When surveyed, a significant majority of childless 32-year-olds state that they do intend to have children in the future, with only 11 per cent of men and 12 per cent of women saying they do not. However, economic constraints heavily influence these intentions. Those in the lowest income quartile are roughly twice as likely to say they intend to remain permanently childless compared to those in the highest income bracket. Among childless 32-year-olds, about a third of women and a quarter of men explicitly cite financial reasons for not trying to start a family. Furthermore, childlessness is exceptionally high - around 70 per cent - for those living rent-free, which includes living with parents or relatives.
The Propenomix Perspective: This is exactly where the narrative of "lifestyle choices" falls apart completely. Young adults are not overwhelmingly rejecting parenthood to buy avocado toast and go on endless city breaks - they are looking at their bank balances and making a cold, hard, rational assessment. The "fertility gap" is essentially an affordability gap. It is deeply concerning that the poorest quartile are twice as likely to give up on having children entirely. We are rapidly transitioning to a society where parenthood is becoming a luxury good, reserved for those who can rely on the Bank of Mum and Dad to secure a mortgage deposit. The underlying macro picture is bleak: stagnant real wages combined with aggressive asset price inflation have broken the traditional lifecycle. If you are stuck living rent-free with your parents at 32, starting a family is a non-starter. This is not a cultural shift - it is a straightforward economic crisis. As an investor, it reinforces my view that wage inflation is desperately needed, but until we fix the supply-side constraints in housing, any wage gains will just be eaten by the landlord anyway. Reversing this trend (which is worldwide, but the reasoning looks very different in different countries) - looking at this - might be viable if the multi-generational household became the norm in the UK. That would take a phenomenal cultural shift, of course!
Savills and their report on the Housing Market for Q1, then.
Theme 1: House Price Momentum Meets Mortgage Reality
The Summary: According to the latest data from Nationwide, UK house prices rose by 0.9% in March, pushing annual growth to 2.2% - a noticeable uptick from the 1.0% recorded in February. Regionally, the North West led the charge with robust annual growth of 3.2%, whereas the South East experienced a contraction of 0.8%. However, this post-Budget momentum is expected to be short-lived. The Bank of England has hit the pause button on rate cuts, prompting a cautious response from mortgage markets. Consequently, lenders have already increased rates by a full 1% compared to January levels, pushing two-year and five-year fixed rates to 4.8% and 4.9% respectively. Analysts predict these mortgage headwinds will significantly suppress market activity over the coming months.
The Propenomix Perspective: Right, let us cut through the noise. Nationwide waving a 2.2% annual growth flag sounds splendid until you remember inflation is chewing away at those real-term values. We are effectively looking at a real-terms price drop across much of the country, especially in the South East where nominal values are already sliding backwards. The real story here is the mortgage market reacting to the Bank of England's dithering. A 1% jump in mortgage rates since January is a massive handbrake turn for buyer affordability. When two-year fixes flirt with 5%, the maths simply stops working for highly leveraged buyers and amateur landlords alike. Lenders are jittery, swap rates are pricing in higher-for-longer base rates, and anyone who thought we were returning to the sub-2% utopia of the 2010s needs a swift reality check. The North West might be resilient for now, but gravity always wins when capital gets this expensive.
Theme 2: Transaction Volumes - A False Dawn?
The Summary: Transaction data paints a complex picture of the early 2026 market. HMRC figures reveal there were 86,430 residential transactions in February. While this represents a 6% decline compared to February 2025 - a drop attributed to a rush of transactions beating the previous SDLT deadline - it remains 5% higher than the 2017 to 2019 historical average. This suggests a relatively strong start to the year. However, forward-looking indicators are flashing warning signs. Recent data from TwentyCI indicates that sales agreed, net of fall-throughs, were actually down 2.5% in March compared to the 2017 to 2019 average. Furthermore, RICS surveyors have reported a fresh decline in new buyer enquiries, reaching levels not seen since 2023, alongside a dip in new instructions as sellers hesitate.
The Propenomix Perspective: Do not let that 5% bump against the 2017 to 2019 average fool you. That HMRC data is looking in the rear-view mirror at deals agreed months ago, likely before the latest mortgage rate spikes began to bite. The TwentyCI data and the RICS survey are the potential canaries in the coal mine here. A drop in net sales agreed and a collapse in fresh buyer enquiries would tell me that the spring market is going to be incredibly sluggish. However, we still are not seeing that in the real time data - but then that is how the canary in the coal mine might work. This would be a classic Mexican standoff: buyers cannot afford the higher debt costs, and sellers absolutely refuse to drop their asking prices unless forced by the three Ds - death, debt, or divorce. Transaction volumes could be the real casualty this year, not necessarily nominal house prices - there is room for them to clip back a couple of hundred thousand, easily enough, but let’s continue to monitor.
Theme 3: The Rental Market Imbalance and Legislative Fear
The Summary: The UK rental market continues to demonstrate steady growth amidst ongoing supply constraints, with annual rental growth sitting at 2.0% in February according to Zoopla. This national figure masks significant regional variations. The North East and North West reported the strongest annual growth at 4.4% and 3.3% respectively. Conversely, the West Midlands saw the weakest growth at just 0.6%, with urban centres like Birmingham and Nottingham actually experiencing rental falls due to decreased demand. Meanwhile, RICS surveyors noted that tenant demand remained positive for the second consecutive month, contrasting sharply with a continued fall in rental supply. Landlords appear to be maintaining a highly cautious approach, a sentiment heavily influenced by the impending introduction of the Renters Rights Act in May.
The Propenomix Perspective: It is entirely predictable. We are watching a slow-motion car crash in the private rented sector, engineered entirely by Whitehall. Rents are up 2.0% nationally, but look at the North East pushing past 4% - that is capital chasing yield in more affordable markets because the sums simply do not add up down south. The upcoming Renters Rights Act in May is the elephant in the room. It is actively petrifying incumbent landlords, causing them to either halt portfolio expansion or exit the market altogether. Hence, rental supply continues to plummet. When you hammer landlords with higher financing costs, remove their tax deductibility, and then strip away their control over their own assets via legislation, of course they are going to flee. Tenant demand is still fundamentally strong, meaning the only logical trajectory for rents in yield-starved areas is upwards.
Theme 4: Inflationary Echoes and The Macro Picture
The Summary: The macroeconomic backdrop remains complicated by geopolitical uncertainty, which is expected to drive up inflation, though not to the severe levels witnessed in 2022. Oxford Economics forecasts that inflation will peak at 4% in the fourth quarter of 2026, before experiencing a sharp decline to below 2% in 2027. Analysts suggest the impact of this inflationary spike will be relatively muted compared to the shocks of 2022, primarily because the UK and global economies are currently growing at a much slower pace. In response to these conditions, the Bank of England is maintaining a "wait and see" stance regarding future adjustments to the base rate. Savills predicts that this broader economic uncertainty will result in nationwide house price growth of just 2.0% for the entirety of 2026.
The Propenomix Perspective: So, inflation is heading back to 4% by Q4, and the Bank of England is standing frozen like a deer in the headlights. Brilliant. While the analysts assure us this will not be a repeat of the 2022 horror show, a 4% inflation peak still wreaks havoc on consumer confidence and purchasing power. The Bank's "wait and see" approach is essentially an admission that they are entirely data-dependent and lack a proactive strategy. For property investors, this means the cost of debt is going to remain frustratingly sticky. Gilt yields will price in this inflationary bump, keeping fixed mortgage rates elevated. A forecasted 2.0% nominal house price growth for the year is effectively a real-terms loss. We are stuck in a stagflationary holding pattern. My advice? Focus squarely on forced appreciation and high-yielding assets, because relying on macro-driven capital growth this year is a fool's errand.
With an attempt to finish on a positive note, especially for midlands-focused investors, here is the summary of the Glenigan writeup on Birmingham.
Theme 1: The Birmingham Build-to-Rent Boom
The Summary: The residential construction sector in Birmingham is experiencing a significant surge, completing a record 4,594 units in 2025. Looking ahead to 2026, the pipeline remains robust with a further 6,822 homes currently under construction. A notable characteristic of this ongoing development is the dominance of Build-to-Rent proposals, which account for 55% of these upcoming units. Furthermore, the city has 147 public and private residential schemes that hold detailed planning permission and are projected to commence on site within the next twelve months. Prominent examples include the £78 million Icknield Square development by Places for People, which will deliver 243 flats.
The Propenomix Perspective: The headlines scream about record numbers, but let us look under the bonnet. Over half of this new stock is Build-to-Rent. Institutional capital has decided Birmingham is a safe haven for yield, but this does not necessarily help the first-time buyer trapped in a cycle of escalating rents. The sheer volume of units sounds impressive, but when you contextualise it against population growth and historic undersupply, it is barely scratching the surface. Furthermore, with SONIA swap rates still making development finance eye-wateringly expensive for the smaller players, it is no surprise the big institutional BtR funds are dominating the skyline. They have the deep pockets to weather the storm. It is great for the crane count, but perhaps less transformative for local owner-occupation metrics than the politicians would have you believe.
Theme 2: The Regional Ripple and Private Sector Reliance
The Summary: The construction momentum in Birmingham is acting as a catalyst for the broader West Midlands region. Data indicates there are 954 residential schemes across the region equipped with detailed planning permission and set to begin construction over the next year. The majority of this pipeline - comprising 640 schemes - operates at an underlying level, meaning individual project values fall below the £100 million threshold. The private sector is the primary driver of this regional activity, accounting for 544 of the approved schemes due to start. This includes substantial private developments such as David Wilson's Keresley Sustainable Urban Extension in Coventry, which will deliver 388 homes. The balance of the pipeline includes social housing projects, such as a 634-flat development in Newcastle-under-Lyme.
The Propenomix Perspective: This is where the real economy lives. The mega-towers in the city centre might win the architectural awards, but it is the sub-£100 million regional schemes that actually house the workforce. Seeing the private sector shoulder the burden with 544 schemes is exactly what you expect when local authorities are functionally bankrupt and social housing budgets are stretched thin. However, having detailed planning permission and actually laying bricks are two very different things. How many of these regional sites will be delayed by the usual suspects - discharge of planning conditions, utility connection delays, or sudden viability issues as the true cost of labour hits the spreadsheet? The volume housebuilders are pushing forward, which suggests some confidence in end-user demand, but do not mistake a packed planning pipeline for guaranteed housing delivery. The friction in the system remains immense.
Theme 3: Contractor Concentration and the Delivery Machine
The Summary: The execution of the West Midlands' residential pipeline relies heavily on a select group of major contractors. In the twelve months leading up to February 2026, Winvic secured the highest volume of work in the region, amassing £230 million in contracts. A significant portion of this is driven by Birmingham-based projects, including the £130 million Oasis Southside commercial and residential scheme. Speller Metcalfe follows closely with a regional order book totalling £109 million , whilst Morgan Sindall secured £100.6 million in building contracts. The general outlook for the region's construction industry remains positive due to this continuous stream of upcoming residential work.
The Propenomix Perspective: Here is the bottleneck nobody wants to talk about. When a handful of contractors are sitting on order books running into the hundreds of millions, you have a classic concentration risk. Winvic pulling in £230 million in a single region is a testament to their tendering machine, but capacity is finite. The supply chain is still dealing with the hangover of the last few years - skilled labour is retiring faster than it is being replaced, and sub-contractors are notoriously fragile when it comes to cash flow. If one of these top-tier contractors sneezes, the whole regional delivery target catches a cold. It is deeply encouraging to see capital flowing into the West Midlands, but my eyes are firmly fixed on the balance sheets of the firms actually tasked with pouring the concrete. A positive outlook is lovely for a brochure, but delivering on time in the current macro environment requires flawless execution. Measuring completions (when you look at the number of schemes stuck at Gateway 2, for example) is really the only way to do it - although the growth in starts is very different to what’s been happening in the capital in recent months.
As we get towards the end for this week - our Manchester Property Business workshop is continuing to sell very well. This is a workshop in huge demand, as we talk about exits. We cover tax, risk, deal structuring and exit options - not just for you, but for those who you will inevitably be dealing with to buy assets, portfolios, companies and the likes from. Can you help with their exit? I have, over the years, often because they have no real formal plan of their own - and added massive value, getting deals over the line. Have you got children or are you planning to leave a legacy? What does your plan look like? Do the kids know about it…….they often don’t, and - spoiler alert - they often don’t want to play ball either!
As always we have real life case studies about our own experiences, and close with our “no-holds-barred” Q+A. Our VIP dinner is now sold out, but it isn’t too late to get a ticket for the workshop. Book your tickets for Wednesday 22nd April, Central Manchester at: www.tinyurl.com/pbwten
Above all - please remember to Keep Calm, ALWAYS listen to or read the Supplement, and Carry On. There will be opportunities abound this year and towards 2030 and beyond - the landscape has been set for a surefire bull run. Capital growth looks set to remain slow(ish) at the moment, although if you are in the right part of the UK, you will be well looked after by the combination of that plus inflation, the big bull run needs some runway first (although let’s see what the FCA and PRA do around easing lending requirements again) - but let’s finish our super Golden Quarter together - it is a case of “here we go” in my opinion. The fundamentals haven’t changed - there’s a shortage of 2-3 bed terraces and semis, there was 15 years ago and it has only got worse since then. “Investing in property” is not a guaranteed win. Investing in undervalued areas, sexy on the spreadsheet, strong yields - that’s as close to a guarantee as you will get in any game, which will also ensure you keep pace and indeed stay ahead of inflation. KCCO!