"31% of homes for sale in London are former rentals, almost 3 times the average across the rest of the country." - GLA Housing Market Report: February 2026 (citing Zoopla data)
This week’s quote pertains to the deep dive, as ever, as we get stuck into a number of reports including this one on how it’s going in London (and then I take the shine off, as usual).
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 kicks us off as we need to continue to keep an eye on the developments stateside and how they impact our interest rates and economic future, let alone national security of course. We had some Chamber of Commerce data this week revealing that 33% of UK firms who are exposed to tariffs (including the ones that were imposed from February 1st on nations who opposed the US bid to acquire Greenland) have already taken action, diverting investment or shifting production. There’s no winners here from this sort of activity.
The 10% tariff baseline is being carefully negotiated for “Schedule 2A” goods (mostly high-end manufacturing, which is what a lot of our manufacturing actually is in this age) - maintaining this fragile EPD deal signed last year (“Economic Prosperity”, that is not forthcoming from imposing tariffs, ultimately).
What did the Treasury have to say this week? Effectively that the UK would seek to strengthen trade ties with the EU (the lowest hanging fruit, of course) and India (the one least likely to upset anyone else, that has a significantly growing market and middle class, of course) - to hedge against further US volatility (spot on, of course, even if that rhetoric will upset ole Big Baby).
As already highlighted, the expected actions are now quietly taking place - the simple Trump manoeuvre of “you lot aren’t spending enough on defence”, levelled (correctly) at NATO, although not the UK (from a contract/2% perspective, although it is hard to argue that the UK is spending enough on defence) - which in the simple Trump world then leads to - buy our stuff, our companies produce the best stuff in the world; those who are subject to the tariff bullying are unsurprisingly making moves to ensure they procure NOT from US companies, but from home-grown companies. The EU are calling it a “Safe” fund - London’s insurance policy is ultimately better dealt with through Brussels than with the “help” - quite literally mercenary only, in the current environment - of the United States. This really should surprise no-one from a game theory perspective, and frankly should be the ripostes thrown back at the US every time they threaten to pull a tech or a healthcare deal - let’s just stop buying your stuff then Donald, we will make it ourselves - your reshoring policies are such a great idea, we think we will steal them, and do that ourselves. Thanks for the steer, mate.
Trump’s big move for the week really was repealing the 2009 Endangerment Finding. Must be some new research, or some groundbreaking progress here? Not really. He just disagrees with the conclusions and the way they’ve been implemented, so the answer is to go back 17 years apparently……but there we go. Repealing this finding means - arguably - that they cannot set Federal climate rules. A spoiler for the future, some might suggest.
The entire debate is fraught with difficulty. Konstantin Kisin cut through the noise with another recent Question Time appearance and has gained much more mainstream traction thanks to his straight-talking views. His conclusions are not always perfect (when it comes to economics, anyway, which I will limit my commentary to) - but his logic is very, very hard to argue with. From a higher-level perspective, Miliband has remained silent (which is almost certainly the dominant strategy, bearing in mind any critique is only allowed to be one-way from DT to the UK, not vice versa, or there’s more tariffs coming - so much for free speech) - but also, it is a case of remembering what we’ve got closer to home - a damaged and fragile relationship with the EU. Great - for the moment - but when you look at the political parties waiting in the wings with BIG shares of the votes in frankly ALL of the EU nations - this doesn’t seem much of a long term solution either.
Here’s the uncomfortable bits though. Global warming really isn’t viewed as a global issue by anyone at the nation level. It’s all puffery. Countries care about themselves and as the US relentlessly pursues isolationist strategies, that becomes more and more obvious. Kisin’s point (which has been made many times before, of course) that importing energy e.g. oil and gas rather than sourcing our own closer to home means we are measuring the wrong things - simply offshoring it is a nonsense, and LESS efficient (and we have less control over the extraction process, if we can make that more sustainable). In reality, the cost of renewables remains too high in terms of capex at the front end versus returns; let alone our broken energy market pricing system, pricing the output at the highest marginal cost - politically this is surely addressable, and we’d be better spending time on that and REALLY trying to get bills down if the truth was anywhere near being told to us.
The 419 of the reality - if you are interested - the intermittency of the current renewable tech - solar and wind - causes issues that are only solved by battery storage and backup in the form of regular generated energy. The renewable solution to that? Geothermal, realistically, but the tech isn’t where it needs to be. More wind, offshore because it is windier? Sure, but the tech doesn’t deliver what is promised to, mostly because it is ageing faster in the North Sea than the projections. This isn’t some kind of conspiracy - in the same way that build-to-rent assets aren’t delivering what investors were told and have been written down in value by up to 30% in some cases, the same happens on a huge slice of projects. It’s just life. But until battery tech (current cost - trillions - but the assumption is that prices will come downwards, which of course they tend to do when there’s a lot of tech investment) becomes genuinely cheap and widespread, there isn’t much of a solution here. If I pointed to one real mistake, it was the idiots who opposed nuclear power from the 1970s with nonsense proliferation arguments (that never held any water under scrutiny, mostly because of the difference between the purity of the uranium needed to power a nuclear plant versus what’s needed to make a nuclear weapon work) and the “wastage” - which would have been drastically less damaging than the alternative, but the alternative is what has proliferated. But - we are where we are today, and we need a national climate change solution, because that’s what pretty much every other country has been doing. We aren’t the only ones that have really messed up - this has murdered Germany’s economic performance since 2022 because of the incorrect policies they’ve followed over the years versus France’s nuclear policy for example - but France have their own ways of following damaging economic policy, of course…..
Enough. Back to the safety of the UK real-time property market. Chris Watkin’s analysis/roundup of week 5 of the UK Property Market.
Chris goes Sunday to Sunday, so this was the week ending 1st February. We once again managed even more listings than in 2025 for yet another week - just about - so far (170k on is 1% above 2025 and 12% ahead of 2024, and 24% ahead of the 2017-19 average). The glut of listings is definitely back, at the moment - following on from Boxing day and record listings according to Rightmove, which have been lost in Chris’ real time stats remember because he doesn’t run the analysis over holiday weeks. The lag of listing before the budget is most certainly over - but how long will it last, and how much is because of holding off particularly on houses above 500k between August and November as budget speculation was rife? We can’t answer that, and will just have to keep monitoring.
Gross sales are at 114k SSTC YTD, 15% higher than 2024. That tells you about the health of this market - the reason why pricing is sideways is because there is just so much supply, but transaction numbers look very healthy indeed. Functional. Prices dropping in real terms. Affordability improving. Don’t tell the Guardian (or any of the mainstream media) - there’s no ragebait here, after all. 23% ahead of the pre-covid “norms”.
Net sales are also 15% ahead of 2024, at 87k. 19% ahead of the 2017-19 market, and 33% ahead of 2023 which as we know was “limp lettuce” territory all year.
To start February there ended up being a 10-year+ record number of homes on the market, 663k thanks to this record Boxing day and solid January - 2025 Feb 1st saw 660k OTM. One more stat - available rental properties in December 2025 in the UK - 285k, compared to 258k in December 2024, and 235k in December 2023. Supply is increasing again - a longer timeframe is needed to put all of that into context but if new rents are flat, or even down - which some are telling me they are - 10.5% more stock than the year before tells a story, of course. It’s not “enough” - enough is more like 300k, as a rule, in historical context - but the first time buyers are doing just fine and many are choosing to buy rather than rent because they can, thanks to comparatively lower interest rates compared to the last 3 years, and a buyers’ market.
Reductions remained over 20k - 21k for the week, 12.2% of stock reduced in January, 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; 21.5% in week 5, and 20.5% in week 4 (longer-term average 24.2% - all far too high of course, but all numbers have to be looked at in context of the “norm”).
January ‘26 saw sales agreed averaging £340.73, Only 0.63% ahead of a year ago. However, I do wonder just how much the cheaper stock selling much more is harming this average and this is why there’s some divergence between more recent figures and the ONS. Let’s see what filters through when we get there. This number is 16% ahead of 5 years ago - January 2021 was really accelerating very fast in terms of pricing and a huge slice of that 16% happened in just one year. We will keep monitoring. Exchanged prices were well above this for the month - £348.13 per foot, which is the highest number on record. Again, is there distortion here because these were deals agreed after the 2025 budget? It wouldn’t seem so, but you know we don’t make decisions based on one month’s data, we just keep abreast of it.
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!
How about the Macrocoaster for this week? Growth was on the agenda, of course. The RICS residential market report limped out. UK Finance arrears and possession data was also out for Q4 2025. Bringing up the rear we still need to talk about the gilts and swaps, and will do for many years, I’m sure.
I bet you are sick of these 0.1% growth reports, are you not? I certainly am. Limping, treacle, stagnant - we aren’t short of metaphors or similes either. Rolls-Royce is not what we’d be describing the UK economy as at the moment. 1% higher than Q4 2024, we are told, but 1.3% up annually on the back of 1.1% up in 2024. Yes, it’s hard to explain why one number says 1% and the other says 1.3%. But the 1.3% is the one that is consistently used (they haven’t just cherrypicked the best one) which is our primary concern. It’s apples with apples.
In Q4 2025 the services sector showed no growth, so what really happened is that a recovery in production carried a very limp construction sector, which fell 2.1%. Q4 is always challenging anyway, but we know the PMIs have been really poor of course as we’ve been monitoring them!
In a move that SHOULD (note - SHOULD) be celebrated, Real GDP per head was up 1% in 2025, after no growth in 2024. However, when we look at RHDI - Real Household Disposable Income - the metric I drastically prefer for gauging about rent increases and affordability - that cratered in 2025. How can that be the case? Because the Government continued to take a bigger slice of everyone’s pie, of course.
We then get the usual revisions - November’s 0.3% growth, which was a surprise, revised down to 0.2%. December’s growth 0.1% as well. GDP per head - in spite of a good 2025 - fell 0.1% on the quarter (as it did in Q3 2025 as well). What grew well? Admin, and machinery repair (instead of new machinery, presumably, as business investment fell). Oh “yay”. What hurt the construction figures the most (down 2.1% in just a quarter) - private housing repair and maintenance down 2.9%, and private housing new work down 3.6%. No-one in the industry will be surprised to hear that.
There was one more section that needs sharing though, because the ONS do a typical “reportage” job here. Compensation of employees. I quote directly - Compensation of employees increased by 1.4% in the latest quarter and is up by 6.5% compared with the same quarter a year ago. Why? 1.5% up in “employers’ social contributions” - e.g. national insurance - and 1.4% in wages and salaries - in just one quarter.
Wider context. Historically - and I’ve said it many times over the past 6 years - after a pandemic, labour tends to win the arm wrestle over capital. In the bad old days, this was just because so much of the workforce died, that labour became much scarcer. This time round, in 2020, some of them seemed to die inside, some of them seemed to lose their way, and some of them are still recovering. Either way, the impact has been similar, if not as stark as a Black Death of course. What I would say that the ONS don’t is that this looks considerably unsustainable at this point in time, with growth being what it is (or isn’t). The correct number for context here is NOMINAL GDP, i.e. not adjusted for inflation - which was up 4.2% on the year. Wages outstripped growth by 230 basis points. That’s not sustainable of course.
From a spending perspective - infrastructure spending did well (and will continue to do so - if you despair, take note that a lot of infrastructure spending is going on in the background, and historically this tends to lead to a “national return” of about £2 for every £1 spent. £378 billion to go, in this parliament - a positive. Net trade did terribly, on the other hand, as the tariff saga dragged on throughout Q4. Household consumption also moved (or limped) forward at 0.2% up on the quarter. This could go a lot better, if confidence returned. But cost of living, marginal tax rates, and lack of confidence in this administration are all reasons why too much money is being saved and not enough is being spent in the economy. Highly damaging stuff - we need a positive PM. Keir has once again carried his Ming Vase for the week, and looks to have warded off the majority of the Mandelson scandal thanks to the sacrifice of his lamb, Morgan McSweeney.
Government consumption expenditure is up 1.6% in real terms from a year ago. More than the 1.3% growth rate, I hear you say? Well of course, that’s right, and of course, that’s also unsustainable. Yay again. Business investment grew 3.5% on a year ago - but that’s a nominal figure, it seems, not an inflation-adjusted one - so in the real world, it kept pace. We finished 2025 third in the G7 from what we know - “losing” to the US (of course) and Canada that printed 1.6%. No-one else in the EU even made it above 1%, and Germany lagged at 0.4%, bottom of the league. Japan continues to make strides forward in GDP per head, though, even with their shrinking and ageing population. Something to learn from there, if we are open-minded enough!
The RICS residential market report gets the full treatment in terms of “their side, my side” - so here you go:
Theme 1: The "Less Bad" Recovery
The Summary
The January 2026 RICS Residential Market Survey indicates that the UK housing market is tentatively "turning a corner" after a period of subdued activity. While the headline metrics remain in negative territory, the trajectory suggests a diminishing level of pessimism among surveyors. Specifically, the net balance for new buyer enquiries came in at -15% for January. While this figure still points to a contraction in demand, it represents a notable improvement from the -21% recorded in December and the -29% seen in November.
Similarly, the agreed sales measure posted a net balance of -9%, which stands as the least negative reading since June 2025. Looking further ahead, sentiment is shifting decisively toward optimism. A net balance of +35% of respondents now anticipate an increase in sales activity over the coming year - the strongest reading since December 2024. Furthermore, +43% of contributors expect house prices to move higher over the next twelve months.
The Propenomix Perspective
Let's be clear about what we are looking at here. When RICS talks about "diminishing negativity," what they are really saying is that we are sinking somewhat slower than we were three months ago. A net balance of -15% for enquiries is still a market where demand is contracting - not expanding. However, in the world of sentiment surveys, the rate of change is often more important than the absolute number.
The shift in the twelve-month outlook is the real story here. We have gone from a market gripped by fear to one where nearly half the surveyors expect prices to rise within a year. This aligns with what I have been seeing on the ground - the "wait and see" approach adopted by capital in late 2025 is thawing. The metric to watch is that agreed sales figure hitting -9%. Once that crosses zero, the narrative shifts from "stabilisation" to "growth," and if the swap rates behave, I suspect we will see that crossover before the daffodils are out.
Theme 2: The Inventory Trap
The Summary
While buyer sentiment appears to be improving, the supply side of the equation remains largely stagnant. The survey records a net balance for new vendor instructions of just +1% in January, which is statistically flat and largely unchanged from December's reading of -1%. This suggests that while buyers are becoming less hesitant, sellers are not yet returning to the market in significant numbers.
Adding to this concern is the appraisal data. A net balance of -11% of respondents reported that appraisal activity is running at a slower pace compared to the same time last year. With stock levels failing to build momentum, the aggregate inventory on surveyors' books remains historically low. This creates a potential imbalance where even a modest recovery in demand could exert upward pressure on pricing due to a lack of available properties.
The Propenomix Perspective
This is the classic "inventory trap" I have been warning about. We have a scenario where demand is essentially doing a U-turn, yet supply is stuck in neutral. New instructions are sitting at a miserable +1%. If you have been reading my notes on basic economics, you know what happens next. If demand rises - even marginally - and supply remains constrained, prices have only one direction to go. Sideways.
The lack of appraisals is particularly telling. It tells me that discretionary sellers are still sitting on their hands, perhaps waiting for a magical interest rate drop that the Bank of England hasn't delivered yet. This lack of liquidity is a double-edged sword. It protects prices from crashing because there is no desperate dumping of stock, but it also means transaction volumes - and therefore agent revenues - are going to remain sticky. For the investor, this supply constraint is your safety net. It is the fundamental reason why the "crash" the tabloids predicted never materialised.
Theme 3: The Rental Supply Crisis
The Summary
The lettings market continues to display a severe structural imbalance between supply and demand. After two quarters of flat activity, tenant demand rose in the three months to January, posting a net balance of +13%. This indicates a renewed uptick in the number of people looking for rental accommodation. Conversely, the supply of rental properties continues to contract sharply.
The net balance for landlord instructions fell to -24%. Although this is an improvement on the -34% seen previously, it confirms that landlords are continuing to exit the market or reduce their portfolios. Consequently, the pressure on rental prices remains intense. A net balance of +28% of respondents expect rental prices to rise in the near term, a significant jump from the +16% recorded in the previous report.
The Propenomix Perspective
If you wanted a case study on the law of unintended consequences, look no further than the private rented sector. The survey explicitly notes that landlord instructions are down -24%. That is a quarter of the potential supply simply evaporating. The surveyor comments are littered with references to the "Renters Rights Act" and tax implications driving smaller landlords out.
The government has made it increasingly unattractive to be a private landlord, and the result is entirely predictable: tenants are paying the price. With demand ticking up to +13% and supply falling off a cliff, a net balance of +28% expecting rent rises actually feels conservative. Yields are going to look increasingly attractive for those brave enough to navigate the legislative minefield, simply because scarcity value is now the dominant factor in the rental market. The amateur landlord is checking out - leaving the field open for the professionals.
Theme 4: The North-South Divergence
The Summary
The aggregate national data masks significant regional variations in house price performance. A widening divergence is evident across the UK, with the northern regions and devolved nations outperforming the south. Specifically, Northern Ireland and Scotland continue to see house prices move higher, while respondents in the North West and the North of England also report prices on an upward trajectory.
In contrast, the net balances for London, the South West, the South East, and East Anglia remain negative. While these regions are seeing "less negative" readings than in previous months, they are still lagging behind the national average. However, the gap is narrowing, and the widespread expectation is that these lagging regions will begin to stabilise as the year progresses.
The Propenomix Perspective
The "levelling up" agenda might be dead in Westminster, but the property market is doing a fine job of it on its own. Scotland and Northern Ireland are practically booming compared to the Home Counties. This isn't just about affordability - though that plays a massive role - it is about yield compression and the fact that the South East is still digesting the post-COVID valuation spike.
However, do not write off the capital just yet. The data shows the negativity in London is receding. We are seeing what looks like the bottom of the curve for the South. Smart money usually moves before the data turns positive. If you are looking for capital appreciation over the next five years, buying in a "negative" London market right now might just be the contrarian play that pays for your retirement. The North offers yield; the South currently offers a discount on future growth. Choose your weapon.
Next up we had the UK Finance Mortgage Arrears and Repossessions update for Q4 2025, which gets the same treatment:
Theme 1: The Defusal of the Mortgage Timebomb
The Summary: The latest data released by UK Finance paints a picture of stabilizing household finances as we moved through the final quarter of 2025. Contrary to the more alarmist forecasts that dominated the earlier part of the decade, homeowner mortgage arrears have begun to recede. There were 80,490 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in Q4 2025, which represents a 4 per cent decrease compared to the previous quarter.
Drilling down into the severity of these cases, the improvements are visible across the board. The "lightest" arrears band - representing between 2.5 and 5 per cent of the outstanding balance - saw a corresponding 4 per cent drop, totalling 27,780 accounts. In total, mortgages in arrears now account for just 0.92 per cent of all outstanding homeowner mortgages. The sheer volume of possessions also fell significantly; only 1,210 homeowner properties were taken into possession in Q4, a 13 per cent reduction from Q3.
The Propenomix Perspective: I have lost count of the number of times I’ve had to talk people off the ledge regarding the "inevitable" mortgage catastrophe. For three years, the headline-writers have been desperate for a 1990s-style implosion, yet the British borrower continues to be stubbornly resilient. The narrative was that as fixed rates rolled off throughout 2024 and 2025, we would see a cliff-edge of defaults. The data simply does not support that doom-mongering.
What we are seeing here is the result of three factors: wage inflation catching up with debt service costs, a likely stabilization in Swap rates towards the back end of '25 allowing for better refinancing products, and - crucially - the extreme reluctance of lenders to actually crystallize a loss. Banks have effectively become social services with a banking licence; they will extend terms, switch to interest-only, or accept token payments rather than trigger a repossession.
The drop in early-stage arrears (the 2.5 - 5 per cent band) is the leading indicator I look at. If that funnel was filling up, we’d have trouble in late 2026. It isn't. It’s emptying. That suggests that the "adjustment phase" to the higher rate environment is largely complete. Households have cut their cloth, cancelled Netflix, stopped buying avocado toast (or whatever the current scapegoat for insolvency is), and prioritized the mortgage. The roof over your head remains the last thing you stop paying - and this data proves it.
Theme 2: The Landlord Exodus That Wasn't
The Summary: The Buy-to-Let (BTL) sector has faced significant regulatory and fiscal headwinds, yet the Q4 2025 figures suggest a surprising level of resilience among investors. The report indicates there were 9,520 buy-to-let mortgages in arrears of 2.5 per cent or more, marking a substantial 9 per cent decrease from the previous quarter. This reduction is actually sharper than that seen in the residential homeowner sector.
Within the early-stage arrears category (2.5 to 5 per cent of balance), the number of BTL mortgages dropped by 7 per cent to 3,480. Perhaps most notably, mortgages in arrears account for only 0.50 per cent of all buy-to-let mortgages outstanding. This is roughly half the rate of arrears seen in the homeowner sector. Furthermore, possessions in the BTL space dropped by 14 per cent quarter-on-quarter, with only 770 properties taken into possession.
The Propenomix Perspective: If you believed the consensus view on Twitter (or X, or whatever we are calling it this week), every landlord in the country is currently bankrupt or selling up. The "Section 24" tax changes and higher interest rates were meant to wipe out the sector. Yet here we are, looking at an arrears rate of just 0.50 per cent - significantly lower than the owner-occupier rate.
How is this possible? It comes down to the brutal efficiency of the rental market. While homeowners have to eat the cost of higher rates, landlords have largely successfully outsourced that pain to their tenants. Rents have skyrocketed over the last two years, providing the cash flow buffer needed to service higher mortgage costs. The "accidental" landlords might have exited in 2023 or 2024, leaving a cohort of more professionalized, lower-leverage investors who know how to manage a balance sheet.
The 9 per cent drop in arrears is massive. It tells me that the "churn" has finished. The landlords left standing are the ones with decent equity and yield calculations that actually work. It is also worth noting that lenders are terrified of possessing tenanted stock - it is a legal quagmire and a PR disaster. They would rather restructure a BTL loan than end up on the front page for evicting a family. The sector is leaner, meaner, and - despite the government's best efforts - clearly solvent.
Theme 3: The Historic Lows of Repossession
The Summary: When viewing the Q4 2025 data through a historical lens, the volume of possessions remains remarkably low. The report highlights that the 1,210 homeowner possessions and 770 buy-to-let possessions are "significantly below the long-term average".
To put this in perspective, the accompanying charts show possession spikes in 2008/2009 that dwarf current figures, where numbers frequently exceeded 10,000 per quarter combined. The current total of under 2,000 properties across both tenures combined represents a fraction of previous crisis peaks. Even with the slight uptick seen in 2024, the trend line for late 2025 has clearly bent downwards again, returning to levels that are statistically negligible in the context of the total UK mortgage market.
The Propenomix Perspective: Context is everything. When you see a "1,200 repossessions" figure, it sounds like a lot of misery - and for those 1,200 households, it absolutely is. But macro-economically? It is a rounding error. We have millions of mortgaged properties in the UK. A possession rate this low implies a market that is almost essentially frozen in a state of protectionism.
We need to talk about the "Shadow Inventory" - or rather, the lack of it. In previous cycles, a wave of repossessions would flood the auctions, depressing prices and allowing cash buyers to feast. That transmission mechanism is broken. With possessions this low, there is no distressed stock hitting the market to drag comparable values down. This puts a hard floor under house prices. You cannot have a property price crash without forced sellers, and the banks (guided by the FCA's Consumer Duty) are ensuring there are almost zero forced sellers.
The Ministry of Justice statistics might show a slight variance due to court backlogs, but the trend is undeniable. We have moved from a "lender of last resort" model to a "forbearance of first resort" model. This is great for social stability but frustrating for investors looking for a bargain. If you are waiting for the banks to dump stock at 70p on the pound, you are going to be waiting a very long time.
Concluding the macro section with the swaps and gilts, then. The 5y gilt yield was down exactly 10 basis points on the week - 3.933% to 3.833%. The growth figures gave the gilts no reason to move up as far as yields were concerned, and the US inflation figures coming in slightly below expectation on Friday afternoon UK time meant that the international markets dropped a touch in yield, leading to this close. The 30s mirrored the 5s, really, with an open at 5.347% and a close at 5.225%, losing just a shade over 12 basis points, so the yield curve got a tiny touch flatter on the week.
The swaps closed Thursday at 3.623%, we don’t yet have Friday’s number so we can’t quite see how Friday’s downward activity affected things. However, Thursday’s gilt close of 3.871% indicated a discount of 25 basis points, which appears to be the “current new normal” as we approach the bottom of this current cutting cycle. In other language, we are 10-12 basis points closer to the gilt yield than we have been throughout 2024 and 2025.
One month ago the 5-year swap yields were 3.58% - one year ago it was 3.893% as we were still decaying from the bond yield wobbles from early 2025 and the tariffs, alongside the vigilantes “stress-testing” Rachel Reeves and the Labour Party.
There were a plethora of interesting reports this week for us to look at together, and I’ve gone for a smorgasbord style approach - something for everyone, I hope. The reports in order: the National Audit Office on unlocking land for housing, the British Property Federation on how councils become social housing entrepreneurs (caught the eye!), the London Housing Market Report published by the Greater London Authority, and the Royal Town Planning Institute reporting on their ongoing research on Futureproof New Towns. Here we go!
The NAO: Unlocking Land for Housing
Theme 1: The Gap Between 'Unlocked' Land and Actual Homes
The Summary
The National Audit Office (NAO) report scrutinises the Ministry of Housing, Communities & Local Government’s (MHCLG) efforts to prepare land for development. Since 2016, the government has allocated £10.5 billion across various programmes aimed at ‘unlocking’ sites that the market deems too risky or expensive to develop without intervention. The headline ambition is substantial: these funds are intended to prepare land capable of supporting 713,000 new homes.
However, the conversion of this potential into physical housing remains slow. As of September 2025, while contracts are in place to support 630,000 of these homes, actual completion data is sparse. The department reports that only 33,000 homes have definitely been built on this land so far. Furthermore, the timelines are incredibly long - unlocking work on current projects is expected to continue until 2034, and the subsequent housebuilding on these sites may not finish until 2050.
The Propenomix Perspective
There is a distinct sense of "jam tomorrow" about these numbers. We are talking about £10.5 billion of taxpayer capital committed, yet less than 5% of the target housing numbers have actually materialised as bricks and mortar almost a decade later. The report politely notes that unlocking land takes a long time - but waiting until 2050 for the final units on current projects is frankly glacial.
The government loves to measure success by "capacity unlocked" because it is an easier metric to hit than "keys in doors". It is the bureaucratic equivalent of counting chickens before the eggs are even laid. The market reality is that land with "capacity" does not house people; built units do. If the private sector operated with these timelines, we would all be insolvent. The disparity between the 713,000 theoretical homes and the 33,000 actual completions highlights the massive lag in the transmission mechanism of government policy. We need velocity, not just capacity.
Theme 2: The Data Deficit and Strategic Blind Spots
The Summary
A significant finding in the NAO report is the lack of comprehensive data regarding housing completions. While the MHCLG tracks the progress of land unlocking activities - remediation, infrastructure, and planning - it does not systematically monitor how many homes are built once the land is ready for the majority of its funds. Specifically, the department did not set out to track housebuilding on the Home Building Funds or the Brownfield, Infrastructure and Land Fund.
This is critical because these specific funds account for approximately half of the total intended housing capacity across all programmes. Consequently, the figure of 33,000 completed homes is likely an underestimate, but the government cannot say by how much. The NAO recommends that the department must urgently agree on an approach to performance measurement that provides timely data on both unlocking progress and the subsequent delivery of new homes.
The Propenomix Perspective
I find it staggering that you can deploy billions of pounds of liquidity into the market and not bother to count the output. We are told that these funds account for 50% of the programme's capacity, yet the department essentially shrugs when asked how many houses were built as a result. It is convenient ignorance. If you do not measure the final output, you cannot be held accountable for the failure to deliver it.
This data vacuum suggests a fundamental disconnect in objective. Is the goal to build houses, or is the goal to be seen spending money on housing? If it were the former, tracking completions would be the very first line on the spreadsheet. The report suggests using "proxy measures" like energy performance certificates to fill the gaps. That is a sensible workaround, but the fact that we have to retrofit basic monitoring into a £10 billion portfolio suggests the strategy was flawed from day one. You cannot manage what you do not measure.
Theme 3: Risk Appetite and The National Housing Bank
The Summary
Looking ahead, the government plans to consolidate its efforts into a new National Housing Delivery Fund (NHDF) and a National Housing Bank, launching in April 2026 with £21 billion of resources. This new entity will shift the focus further towards financial transactions - loans, guarantees, and equity - rather than pure grants.
The report highlights a tension in risk appetite. Historically, Homes England has been risk-averse; while they had permission to lose up to 25% on certain loan portfolios, they are forecasting losses of only 13% to 18%. This suggests they may be backing "safe" projects that might have found funding elsewhere, rather than tackling the truly difficult, high-risk sites that require state intervention. The NAO suggests the new Fund provides an opportunity to "clarify their approach to risk" to ensure a better balance of risk and reward.
The Propenomix Perspective
Here is the crux of the issue: the government is acting too much like a high-street bank and not enough like a catalyst. If Homes England is consistently beating its loss caps, it is not taking enough risk. The entire point of state intervention in the land market is to touch the toxic assets - the sites with heavy contamination, fragmented ownership, or abysmal infrastructure - that the private sector won't touch with a bargepole.
If the new National Housing Bank simply lends to projects that are bankable elsewhere, it is crowding out private capital, not adding value. The report notes that a "withdrawal of mainstream lenders" drove demand for government loans from robust borrowers. That is a nice way of saying the government became a lender of last resort for decent projects, rather than a saviour for broken ones. For the £21 billion NHDF to actually work, they need to stop worrying about getting every penny back and start worrying about why the market is broken in the first place.
Theme 4: The Shift to Continuous Engagement
The Summary
The NAO identifies a shift in operational strategy away from rigid "bidding windows" towards "continuous market engagement". Early programmes like the Housing Infrastructure Fund suffered because they launched with tight deadlines, forcing local authorities to submit immature bids to secure cash before the window closed. This led to delays and project failures.
Newer funds, and the proposed NHDF, are adopting a "single front door" approach where applicants can enter the system at any time. This allows projects to be assessed when they are actually investment-ready. However, evaluations warn that this approach risks favouring the "most deliverable" projects over the most strategically impactful ones, potentially bypassing complex sites in non-priority areas.
The Propenomix Perspective
This is one of the few genuinely positive shifts in the report. The "bidding window" culture of the public sector is a disaster for property development. It forces councils to scramble together half-baked feasibilities to hit an arbitrary deadline set by Whitehall, rather than following the natural rhythm of a development cycle.
Moving to continuous engagement aligns the capital with the project's reality, not the civil service's calendar. However - and there is always a however - the "single front door" is only as good as the people manning it. If the officials behind that door are still incentivised to pick the low-hanging fruit to hit short-term political targets (like 1.5 million homes by 2029), the difficult, strategic regeneration projects will still be left to rot. We need a system that rewards the hard yards, not just the quick wins. Continuous engagement is the right vehicle, but we need to make sure the driver knows where they are going.
We move on to the British Property Federation’s research paper asking a key question - how can councils become social housing entrepreneurs?
Theme 1: The Rise of the "Entrepreneurial State"
The Summary: The report opens by acknowledging the immense pressure local authorities are under to meet the national target of 1.5 million homes by 2029, all while operating in an environment of reduced government funding and stalled programmes. The core argument is that councils must evolve beyond their traditional role of simply fixing market failures. Drawing on the work of economist Mariana Mazzucato, the report suggests the public sector should act as a "market shaper" and risk-taker, investing early where the private sector might hesitate.
To achieve this, the research suggests councils need to adopt an "entrepreneurial mindset". This involves solving problems creatively rather than taking risks for the sake of it, and investing in publicly owned assets to generate income alongside social benefits. The report highlights that while the lifting of the Housing Revenue Account (HRA) borrowing cap in 2018 gave councils more freedom, it also demands they become far more "financially savvy" to navigate the associated risks.
The Propenomix Perspective: Let’s cut through the buzzwords for a moment. When a report tells you the public sector needs to become "entrepreneurial," what they usually mean is "the central government grant has dried up, so go and gamble on the open market." The invocation of Mazzucato is fashionable, but in practice, this is about survival - and it is terrifyingly high-stakes poker.
The report suggests councils should be "acting as a risk-taker". This sends a shiver down my spine. We have seen what happens when local authorities try to play private equity manager - look at the absolute carnage in Woking or Thurrock. While the intent to deliver 1.5 million homes is noble, the reality is that local authorities are being asked to layer development risk on top of statutory delivery obligations. We are swapping the safety of the coupon for the volatility of the equity slice. If councils are going to be "market shapers," they need to understand that the market pushes back - usually in the form of cost overruns and yield compression.
Theme 2: The Partnership Paradox and The Cambridge Model
The Summary: Recognising that traditional delivery models have proven too slow, the report heavily advocates for Joint Ventures (JVs) and investment partnerships. A standout example provided is the Cambridge Investment Partnership, a 50/50 Limited Liability Partnership formed between Cambridge City Council and the Hill Group in 2017. Originally targeting 500 homes, the programme expanded to 2,000.
The primary benefit of this structure, according to the findings, is that it allows the partnership to buy land on the open market - something the council struggled to do alone - while leveraging the private sector's ability to assess site potential and push proposals forward at pace. The report emphasises that successful partnerships require a "values-led" approach and "alignment of ambition," moving beyond transactional relationships to long-term collaborations that can weather economic storms.
The Propenomix Perspective: This is where the rubber actually meets the road. The Cambridge model mentioned here is the gold standard, but it works because it admits a hard truth: councils are generally terrible at being developers. They are bureaucratic, risk-averse, and slow. By pairing with a private entity like Hill, they effectively outsource the commercial aggression required to get spades in the ground while retaining the land assets.
However, I maintain a healthy skepticism regarding the "values-led" narrative. Let's be clear - the private partner is there for the margin, and the council is there for the units. That is the trade. The danger arises when councils confuse "partnership" with "friendship." The private sector partner will always have a sharper commercial blade. If the market turns and the Gross Development Value (GDV) slides, that "alignment of ambition" is going to be tested by the very real need for the private partner to protect their bottom line. It is a marriage of convenience, not love, and councils need to sign the pre-nup with their eyes wide open.
Theme 3: Financial Engineering and "Municipal Muscle"
The Summary: Beyond standard partnerships, the report details specific financial tools councils are using to unlock stalled sites. Eastleigh Borough Council is cited as a key case study for intervening in developments by offering purchase guarantees (agreeing to buy units if they remain unsold) and providing loans to developers to cover cash flow issues like utility connections.
The report calls this "utilising municipal muscle". By using the council's balance sheet to de-risk projects for private developers, they can unlock sites that are otherwise unviable due to viability gaps or land ownership issues. The findings suggest that these interventions - offering certainty in uncertain times - allow councils to secure affordable housing quotas that might otherwise be negotiated away on viability grounds.
The Propenomix Perspective: This is the most technically fascinating and perilous part of the report. A "purchase guarantee" is, in financial terms, a put option written by the council. The developer gets to build the asset, and if the market demand evaporates, they can exercise their option to dump the stock on the council.
In a rising market, this looks like genius "enabling." In a falling market, the council ends up acting as the bad bank for local developers, absorbing illiquid assets at pre-agreed prices that may no longer reflect reality. We are effectively talking about the public sector underwriting private development risk. While it certainly gets homes built - and Eastleigh’s 2,000 units are a testament to that - it is a strategy that relies heavily on the assumption that the council can absorb that liquidity hit without capsizing. It is "municipal muscle," sure, but muscles can tear if you try to lift too much weight without a spotter.
Theme 4: The Internal Skills Gap and Cultural Change
The Summary: A recurring theme throughout the research is the "resource and capacity" challenge within local authorities. The report frankly admits that technical and financial skills within councils do not always match their level of ambition. To be truly entrepreneurial, the report argues councils need "commercial awareness," "financial confidence," and the ability to manage risk rather than just avoid it.
Westminster City Council is highlighted as a solution model, having recruited directly from the private sector to build cross-functional teams with legal, finance, and delivery capabilities. The report stresses the need for "political intelligence" - ensuring cross-party support so that long-term housing projects survive inevitable changes in administration.
The Propenomix Perspective: This is the single biggest barrier to entry. You cannot run a high-performance development vehicle on local government pay bands. The report politely calls for "investing in the right people", but let's translate that: you need to pay market rates. If you want a Development Director who can go toe-to-toe with a Barratt or a Berkeley Homes, you cannot offer them a civil service pension and a hearty handshake.
The disparity in "financial literacy" mentioned is a massive arbitrage opportunity for the private sector. If the council team doesn't understand the nuances of Internal Rate of Return (IRR) hurdles, overage clauses, or yield shifts, they will be taken to the cleaners during the procurement process. Westminster recruiting from the private sector is the right move, but it is an expensive one. Until councils accept that talent is an asset class of its own, the "entrepreneurial council" will remain a great idea executed by people who are structurally incentivised to do nothing.
Onto the London housing market report - hold tight, folks:
Based on the GLA Housing Market Report for February 2026, here is your Sunday Supplement segment.
Theme 1: The Rental Market Correction and the Great Ex-Rental Sell-Off
The Summary: The relentless upward trajectory of London’s rental market has finally hit a wall. According to the latest data, the annual growth rate in rents decelerated to just 2.1% at the end of 2025, marking the lowest rate of increase since 2022. This is a dramatic shift from the dizzying peak of 11.4% recorded in 2024. While Outer London saw a marginal rise of 1.1%, Inner London stagnated with growth of just 0.5%.
Crucially, this cooling is driven by a combination of affordability ceilings and shifting supply dynamics. Renters are now spending an average of 38.2% of their income on rent, a figure that continues to creep upward. Perhaps the most telling statistic for the wider ecosystem is the flood of stock returning to the sales market; 31% of all homes for sale in London are former rentals, a figure almost three times higher than the national average.
The Propenomix Perspective: Let’s be honest - we all knew the "double-digit growth forever" party had to end. You simply cannot squeeze blood from a stone, or in this case, 40% of a paycheck from a tenant who is already cutting back on heating. But the headline regarding rent prices is actually the boring part here. The real story - the one that should make you sit up and pay attention - is that 31% figure.
Nearly a third of all London listings are landlords throwing in the towel. That is not a "market adjustment"; that is an exodus. We are seeing the cumulative effect of tax changes, regulation, and yields that frankly don't make sense when you can get decent returns on safer assets. The irony, of course, is that while tenants might celebrate the slowing rent hikes today, this mass sell-off is cannibalising the future rental stock. We are solving a pricing crisis by creating a supply crisis. If you are a committed investor with deep pockets, the competition is thinning out - but you have to be brave to catch these falling knives.
Theme 2: London’s Price Deflation and the Apartment Trap
The Summary: While the rest of the UK navigates a mixed picture, the capital stands alone in negative territory. London was the only region to record an annual house price fall in November 2025, dropping by a significant 12.5% to an average of £553,000. This marks the fourth consecutive month of year-on-year declines. Prime Central London took the heaviest battering, with Kensington and Chelsea seeing drops of 16.3%, driven largely by weaker overseas demand following changes to non-domicile tax rules.
There is also a stark divergence between property types. Sellers of flats are disproportionately affecting these figures, being more than six times as likely to sell at a loss compared to house sellers (22.2% vs 3.5%). Despite this, seller expectations remain sticky; Rightmove data indicates asking prices actually nudged up by 0.9% in January, creating a disconnect between expectations and achieved values.
The Propenomix Perspective: The spread between asking prices and sold prices is where dreams go to die, and right now, London sellers are living in a fantasy land. You have ONS data showing a 12.5% drop in completed sales , while asking prices are drifting upwards by nearly 1%. That is not a gap; it is a canyon.
The specific toxicity of the flat market is glaring. If you own a leasehold apartment in London, you are statistically walking a tightrope. A 22% probability of selling at a loss is horrific - and it doesn’t even count stamp duty, frictional costs and any improvements done. This isn't just about the "race for space" anymore; it is about service charges, the cladding hangover, and the simple fact that leasehold tenure is losing its lustre. Meanwhile, the non-dom changes are doing exactly what we warned they would - hollowing out the top end of the market. The government might call it fairness; the market calls it a capital flight. If you are buying, look for the desperate flat seller - they are currently one in five.
Theme 3: The Broken Build Pipeline
The Summary: The construction sector is struggling to gain momentum, hampered by rising costs and regulatory bottlenecks. After an 18-month reprieve, the price of construction materials in the UK has risen for 12 consecutive months, ending 2025 with a 4.2% increase. This inflationary pressure is compounded by labour issues, with 13% of firms reporting recruitment difficulties in December - the highest level for that month in two years.
The output statistics are sobering. Housing completions in London for 2025 totalled just 32,749, the lowest annual figure in the last five years. Furthermore, the number of completed but unsold units is climbing, sitting 32% higher than in Q4 2023. Delays are also being attributed to the new Building Safety Regulator, which has created a backlog in approvals for higher-risk buildings.
The Propenomix Perspective: We keep hearing about "building our way out of the crisis," but the data suggests we are barely laying bricks. A 4.2% hike in material costs might sound manageable until you realise it is sitting on top of the massive post-COVID inflation we already swallowed. Developers are being squeezed from both ends: costs are up, and as we saw in the previous section, end values in London are down.
The metric that worries me most is the "unsold completed" stock piling up. These aren't ghosts; they are units priced for a market that existed two years ago. Add in the bureaucratic sludge of the Building Safety Regulator - necessary for safety, yes, but currently a drag anchor on delivery - and you have a recipe for stagnation. We are essentially eating our seed corn. The lack of completions in 2025 guarantees a supply crunch in 2027/28. If you are holding stock that actually exists and is habitable, hold tight. Scarcity is coming.
Theme 4: The Mortgage Thaw and Sentiment Shift
The Summary: Despite the grim pricing news, there are green shoots emerging in the financing and sentiment landscape. Mortgage affordability has improved significantly, with the average quoted rate for a two-year fixed mortgage (75% LTV) dropping to 3.97% in December 2025. This is down from 4.6% a year prior and is more than a third lower than the 2023 peak.
This easing of financial conditions appears to be feeding through to market activity. Supply in the sales market has increased by 14% year-on-year , and RICS survey respondents are reporting greater optimism regarding sales prospects for the year ahead. The improved affordability has even supported a slight bump in buy-to-let lending, up 3.1% annually in Q3 2025.
The Propenomix Perspective: Finally, a number that starts with a '3'. Psychologically, sub-4% money is the magic threshold that gets people off the fence. It doesn't fix the deposit hurdle, but it makes the monthly payments palatable again. It is interesting to see that buy-to-let lending ticked up slightly - likely professional portfolio landlords refinancing rather than new entrants, given the exodus we discussed earlier.
However, do not mistake "more supply" for a boom. A 14% increase in homes for sale combined with negative buyer demand usually means one thing: a buyer's market. The power has shifted completely. If you have cash or a mortgage in principle at these new lower rates, you can afford to be aggressive. The sellers are numerous, and many of them (especially the landlords) want out. Bid low, bid hard. The timing might be right to take London on. Waiting for the bottom is a fool's errand - treat it like we are there, but negotiate first, negotiate hard, and show no mercy. (Propenomix meets Cobra Kai).
How about these futureproof new towns, then?
Theme 1: The Governance Gap - Stability vs The Electoral Cycle
Summary
The Royal Town Planning Institute’s report draws a sharp distinction between the successes of international new towns and the historical struggles of their UK counterparts. A recurring factor in successful examples - specifically Almere in the Netherlands and Freiburg in Germany - is the presence of unwavering political and planning consistency. The report notes that these developments benefited from national and regional policy frameworks that remained stable over decades, rather than shifting with short-term political winds.
In Almere, a consistent national policy designated the area as a key growth centre, ensuring long-term investment and infrastructure delivery that survived various economic cycles. Similarly, Freiburg’s success is attributed to a "consistency of approach" where developers and residents understood the long-term vision, largely insulated from the volatility of local election cycles. The report recommends that for England’s next generation of new towns to succeed, they must be shielded from political flux, potentially through Development Corporations that can maintain a singular vision over twenty or thirty years.
The Propenomix Perspective
This is the finding that will have every property professional in the UK nodding until their neck hurts. The report politely calls for "consistency," but let’s translate that into plain English - we cannot build generational infrastructure on a five-year parliamentary cycle. The success stories in Europe didn't just have a plan; they had a plan that didn't get scrapped or radically overhauled every time a new Housing Minister wanted to make a headline.
In the UK, we have a habit of announcing grand visions and then starving them of certainty. We treat planning policy like a fashion trend - constantly tweaking the hemline rather than fixing the fabric. If we want an Almere or a Freiburg in the Home Counties, we need a delivery vehicle that has teeth and tenure. A Development Corporation is the only vehicle that makes sense here - something that can buy land, grant permission, and importantly, survive a change of government without being completely repurposed. Without that shield, these "new towns" will just be housing estates with a slightly nicer font on the entrance sign.
Theme 2: Infrastructure First - The Skeleton Before the Flesh
Summary
A critical lesson identified across the case studies is the absolute necessity of integrating transport and land use from day one. The report highlights the Paris region and Freiburg as prime examples where transport infrastructure was not merely an addition but the defining skeleton of the settlement. In the Paris region, the RER rail network was instrumental in connecting new towns to the economic centre, creating genuine sub-centres rather than isolated dormitories.
In Freiburg’s Rieselfeld and Vauban districts, tram lines were often installed before the housing was fully occupied - or even built - embedding sustainable travel habits from the outset. In contrast, the report notes that Chandigarh in India, despite its grand modernist vision, has become heavily car-dependent due to a dispersed layout and zoning that separated homes from jobs. The recommendation for England is stark: orientate new towns around public transport nodes and ensure high-quality connectivity is operational before the moving vans arrive, not promised for "Phase 2".
The Propenomix Perspective
This is the classic "chicken and egg" problem that the UK seems determined to get wrong every single time. We have a masterful ability to build 5,000 homes and then act surprised when the local B-roads gridlock because the promised bypass or rail link is still "under review." The European model is refreshingly simple: put the tram in, then build the houses.
The reason this matters for investors is value retention. A house in a field is worth what someone will pay to live in a field. A house connected by a 20-minute rapid transit link to a major employment hub is a completely different asset class. The report’s look at Daybreak in Utah is also fascinating here - even in the land of the automobile, they realised that "mixed-use" and "walkable" creates a premium product. If the next wave of English new towns consists of cul-de-sacs accessible only by car, they will fail. We need to stop viewing infrastructure as a cost to be mitigated and start viewing it as the primary value driver. If you can’t get to work, the house isn’t worth buying.
Theme 3: The Financial Engine - Who Pays for 'Nice'?
Summary
High-quality placemaking requires significant upfront capital, and the report delves into how this was achieved internationally through land value capture and corporate investment. In Freiburg, the city utilised a "development measure" allowing them to purchase land at its existing use value (often agricultural) rather than its potential residential value. The municipality then developed the infrastructure and sold plots at a higher price, using the uplift in value to fund parks, trams, and affordable housing.
Conversely, the Daybreak development in the USA offers a different model. Situated on former mining land owned by Rio Tinto, the project was funded by a massive multinational corporation willing to pay for extensive remediation and high-quality amenities upfront. This was partly a branding exercise in corporate social responsibility, allowing them to deliver a premium product without the immediate pressure of a standard developer’s internal rate of return. The lesson is that successful new towns require a mechanism to capture value or deep pockets to front-load quality.
The Propenomix Perspective
Here is the uncomfortable truth about "placemaking" - it is incredibly expensive. Everyone wants leafy boulevards, sustainable drainage systems, and community halls, but nobody wants to pay for them. The Freiburg model is the holy grail: buy the land at farm prices, grant yourself planning permission, and use the massive jump in value to pay for the nice stuff. It is elegant, fair, and incredibly difficult to do in the UK under our current Land Compensation Act rules, where landowners expect "hope value" to be baked into the price.
Unless the government grows a backbone on Compulsory Purchase Order reform to allow true land value capture, we are stuck. The alternative - the Daybreak model - relies on finding a benevolent corporate giant with a few billion to spare and a reputation to launder. I wouldn't hold my breath for that in the Shires. If we want high-quality new towns, the money has to come from the land uplift. If the landowner keeps all the profit, the state picks up the bill for the infrastructure - and right now, the state is broke.
Theme 4: Flexibility - Avoiding the 'Concrete Jungle' Trap
Summary
The report warns against the "blueprint" planning of the past, citing the rigid modernist layout of Chandigarh as a cautionary tale. While visually striking, its strict zoning separated functions and failed to adapt to the messy reality of daily life, leading to dead streets and car dependency. In contrast, Curitiba in Brazil is praised for "urban acupuncture" - a strategy of continuous, small-scale adaptation and "urban management" rather than a fixed end-state masterplan.
Almere is also highlighted for its evolution from a state-led new town to one embracing "do-it-yourself" urbanism, allowing residents to build their own homes and shape their neighbourhoods. The report recommends that English masterplans should be "path-shaping" but not "path-dependent," establishing a strong framework that allows for flexibility, mixed uses, and organic growth over time, rather than trying to design every corner from day one.
The Propenomix Perspective
We have all seen the grey, monolithic results of the 1960s "we know best" school of planning. The idea that a planner in Whitehall can predict exactly how people will want to live in 2050 is laughable. The market changes - look at the rise of working from home. A rigid zoning plan from 1990 would have created dormitory towns that are now ghost towns during the day.
The concept of "urban management" - treating a town as a living thing rather than a finished sculpture - is vital. It allows for mistakes to be fixed and for the town to evolve. The inclusion of self-build in the report is also interesting. In the UK, volume housebuilders dominate, delivering uniform boxes. Allowing some chaos - some self-build, some varied density, some mixed-use - creates a place that feels real. We need to design strong grids and infrastructure, then step back and let the market and the people fill in the gaps. Less "SimCity," more organic growth. This feels like it has a long, long way to run before it gets depoliticised and gets “sorted” appropriately - and that time isn’t really available. The next Government - and who they are - are odds on to have a different take on all of this, unfortunately - because Labour’s vision is not far off here, realistically.
One final segment now, which I will include either weekly, fortnightly or monthly, depending on feedback. Yes - clarity has increased in recent months and I appreciate all of the positive feedback I’ve been receiving on all of that. But the time commitment is getting huge for all involved, I know. The Wrap is what it’s all about - the payoff for reading all this, and what to do about it! Please let me know your thoughts!
The Sunday Supplement: The Art of Sinking Slower
Trumponomics is the noise, but the signal is much closer to home. While everyone is watching the US and worrying about tariffs on high-end manufacturing or Schedule 2A goods, the real story is the rot in our own backyard. The RICS survey came out this week and the headline was "diminishing negativity". Let’s be clear what that means: we are drowning, but the water is rising slightly slower than it was in November.
The data is contradictory, messy, and screaming “opportunity” for those of you who aren’t waiting for a permission slip from the mainstream media. Here is the reality of the market right now, stripped of the "turning a corner" waffle.
The Inventory Trap is Your Best Friend
We have a classic economic standoff. Demand is doing a U-turn; buyer enquiries are less negative and sentiment is shifting to optimism. Yet supply is stuck in neutral. New vendor instructions are sitting at a miserable +1%.
This is the "inventory trap". Agents have buyers but nothing attractive to sell. Discretionary sellers are sitting on their hands, waiting for an interest rate cut that the Bank of England is in no rush to deliver.
The Move: Stop waiting for a price crash. It is not coming. The lack of liquidity puts a hard floor under prices. If you are buying, you are in a window before the inventory squeeze forces prices sideways or slightly up. If you are selling, pricing is critical; if you are not the cheapest or the best in class, you will sit there.
The Amateur Landlord has Left the Building
If you needed proof that the government’s war on landlords is working, look at London. 31% of all homes for sale in the capital are former rentals. That is an exodus. Across the country, landlord instructions are down 24%.
The amateurs are cashing out. They can’t make the numbers work with Section 24 and higher rates. But for the professional, this is the golden age.
The Move: Hold your nerve. Supply is falling off a cliff while tenant demand ticks up. Rents have hit an affordability ceiling in London - growth has slowed to 2.1% - but yield is about scarcity. The competition is quitting. Let them go. Pick up their stock at a discount when they get desperate, but do not rely on double-digit rent hikes to save a bad deal.
London is on Sale (Especially the Flats)
The capital is the only region in negative territory, with prices down 12.5%. But look closer at the flat market. Sellers of flats are more than six times as likely to sell at a loss compared to house sellers.
We are seeing a 22% probability of a loss on leasehold apartments. That is blood on the streets. Meanwhile, mortgage rates have dipped below the psychological 4% barrier.
The Move: Be a contrarian. Everyone hates London leaseholds right now. That means you should be interested. Bid low, bid hard, and look for the "desperate" seller profile. They are currently one in five. Do not touch new builds; construction costs are up 4.2% and the Building Safety Regulator is a bureaucratic nightmare. Buy existing stock where the depreciation has already happened.
The "Shadow Inventory" Myth
I am tired of hearing about the "inevitable" wave of repossessions. It is a ghost story. Homeowner arrears are down 4% and possessions are a rounding error.
Banks have become social services with a banking licence. They will extend terms, switch to interest-only, or accept token payments before they crystallise a loss. The "distressed stock" you are waiting for does not exist because the banks are forbidden from creating it.
The Move: Stop building a strategy around buying repossessions at 70 pence on the pound. That transmission mechanism is broken. The market is frozen in a state of protectionism. You need to find motivation elsewhere - divorce, death, and debt are the drivers, not the banks.
Ignore the Government’s "Jam Tomorrow"
The National Audit Office report is a masterclass in failure. £10.5 billion spent to "unlock" land, and we have 33,000 homes to show for it against a target of 713,000. They aren’t even tracking completions properly.
The Move: Do not base any investment decision on government infrastructure promises or "new towns." The timelines are glacial - some of this land won't be built out until 2050. Buy where the infrastructure exists today. A house in a field is worth agricultural value; a house near a functional train station is an asset. The government cannot deliver the latter, so stick to what you can see, touch, and rent out today.
The Final Word
The economy is limping. GDP growth is a rounding error, and the private sector is carrying the dead weight of the public sector. But in the property market, stagnation is safety. The crash didn't happen. The boom isn't happening yet.
We are in the messy middle. The smart money moves before the data turns positive. The North offers yield; the South currently offers a discount on future growth. Pick a side, do the maths, and ignore the noise.
So - 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. Anything individual to consider? Get a VIP ticket and join us for dinner, in a smaller setting with an opportunity to discuss any specific roadblocks or issues in your property business at the moment. Our VIP dinner was absolutely incredible this week, and got some superb feedback - the upgrade is well worth it. There’s ONE Super Early Bird VIP dinner ticket left! Grab it before someone else does! 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 have an amazing Golden Quarter together, it is a case of “here we go” in my opinion.