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"The housing problem is a land problem. You cannot give a man a house without first giving him the ground to put it on, and the ground is the one thing they are not making any more of." - David Lloyd George, on the People's Budget.
The quote pertains to the Deep Dive, as is the habit round here - because this was a week in which a consultancy, a listed housebuilder and a think-tank all looked at the same hole in the ground and described it from three different angles, without any of them quite landing on the old Welsh wizard's point: there is no housing crisis that isn't, at bottom, a land-and-building crisis. Savills told us how few homes will actually get built. Berkeley told us why they personally have stopped buying the land to build them on. And the Resolution Foundation told us what happens to a generation when the houses don't come - they go home to mum and dad and stay there. Lloyd George was fighting this fight in 1909. A hundred and seventeen years on, we are still fighting it, with better spreadsheets and worse outcomes. More on all of that below, as ever.
As we charge headlong through the biggest change in housing law in 38 years, our next Property Business Workshop is live and tickets are already selling. This is about due diligence - and REAL due diligence - performed on you by lenders and prospective investors, as well as what you should be doing on potential business partners and - most importantly - property deals. Book in on the next Property Business Workshop with myself and Rod Turner - Wednesday 1st July - Central London - https://www.tickettailor.com/events/boardroomclubconsultingltd/2177426
Welcome back to Trumpwatch. And this week, before we even get to the President, I have to start at home, because the ground shifted under British politics on Friday in a way that changes the backdrop to everything else in this Supplement. Keir Starmer has resigned as leader of the Labour Party. He stays on as Prime Minister until the leadership contest concludes - so nothing changes at the despatch box tomorrow - but the succession is now formally open, and Andy Burnham, the former Mayor of Greater Manchester, is the clear front-runner to replace him. We have been circling this for months in this column, ever since the betting markets first started shortening on Burnham, and the thing I kept saying was that it needed the MPs to move first, because none of them wanted to be the one holding the knife. Well, somebody moved. I won't pretend I saw Monday specifically coming - I didn't, until we all did, and Starmer’s language before Monday was one of a stubborn mule! The direction had been signposted for a while though, and here we are.
Why does a Labour leadership contest belong in Trumpwatch rather than the macro section? Two reasons. First, because the gilt market cares, and we'll come to exactly how much when we get to the rates. Second, because the President himself has now waded into it, which is where the transatlantic thread picks up. Onwards.
Because Trump, it turns out, has views. Quel surprise. In an Oval Office briefing on Wednesday he was asked about Burnham and delivered his verdict in the way only he can. He called him "extremely liberal" and added, with that particular flatness he reserves for people he's already written off, that the two of them were "probably of a different persuasion." Now, I want to be careful not to over-read a single Oval Office soundbite, because the man says a great deal and means a variable amount of it. “Take Trump seriously but not literally”, the sensible commentators have said throughout.
But the translation for us is reasonably clear: a Trump White House is signalling, ahead of time, that it does not expect to find a natural partner in the man most likely to be running Britain by the autumn. And while he was at it, he revived the old feud with the Mayor of London, branding Sadiq Khan "grossly incompetent" - which is, at this point, less news than weather. Standard Fare.
The substance underneath the soundbite, though, is worth a moment, because it's about energy, and energy is the thread that's been running under the gilt market all year. Trump claimed he'd previously given Starmer "pretty good advice" to "open up the North Sea" for more oil and gas drilling, and his pessimism about Burnham seems rooted in the assumption that a more left-leaning administration would do the opposite - keep the North Sea taps where they are, or tighten them. Is he right about that? Probably, broadly, on the direction - a Burnham government is unlikely to be a fossil-fuel-expansion government. Whether that matters as much as Trump thinks it does is another question entirely, and one I'd hedge heavily, because North Sea output has been in structural decline for two decades regardless of who's been in Downing Street or what they've said about it. The geology doesn't read manifestos. There are opportunities in the North Sea - but ours are limited. It is much more symbolic than it is meaningful to our energy security, availability, and pricing.
The ideological divide is real, however, and it's one more reason the "special relationship" feels more strained this summer than it has in years - the Iran fallout, the tariff churn, and now an incoming British leader the White House has pre-emptively filed under "different persuasion." We'll see how much of it survives contact with actual governing, which is where most of this theatre goes to quietly die.
Right - the tariff front, because there's a serious escalation this week and I don't want the political soap opera to bury it. On Friday, the President threatened, via the usual channel (of which we tire, significantly, especially in a week where it can be difficult to sleep), an immediate 100% tariff on all goods from any country that maintains or introduces a Digital Services Tax on American technology companies. And that, my friends, is pointed squarely at us, because the UK has had a 2% DST since 2020. So this is not abstract. This is billions of pounds of British exports placed on the table as a bargaining chip, with the implied demand being: scrap your tech tax, or we tax your everything.
Let me put the trap clearly, because it's a proper one and there's no comfortable way out of it. The 2% DST is not loose change to the Treasury. A recent review put the take at over £800 million in the 2024-25 fiscal year, up from £678 million the year before - so it's a growing revenue line, not a token. Repeal it to protect the exporters, and you blow an £800-million-and-rising hole in the public finances at precisely the moment the Chancellor - whoever that turns out to be by the autumn, given Friday - has no room for holes. Keep it, and you put a 100% tariff wall in front of a chunk of British exports. There is no version of this where someone doesn't lose, and the question is only who, and how loudly. I genuinely don't know how this one resolves, and I'd be suspicious of anyone who tells you they do - it depends on whether the threat is real or a negotiating opening, and with this White House that distinction is never clear until the very last moment, sometimes not even then. I’ve said here before - personally, here, I’d retaliate by saying any losses by “any country that uses tariffs as a weapon” will be “regained by increasing the Digital Services Tax accordingly”.
The mechanism is the bit that ought to worry you more than the headline number, mind. The administration intends to do this via Section 301 of the Trade Act of 1974 - the same narrower, better-drafted statute I've been banging on about for weeks, the one they keep reaching for after the courts struck down the broad emergency-powers tariffs back in the spring. Section 301 is the legal door that actually holds. And the White House has briefed that this penalty would supersede existing bilateral trade agreements - which, if it means what it says, makes the recent US-UK deal worth rather less than the paper it was signed on. That's the part that should give you pause: not the 100% number, which may well be theatre, but the casual suggestion that a signed agreement is no impediment. If deals don't bind, then nothing the negotiators achieve is ever quite banked, and that uncertainty is itself a cost - it sits in the bond market as a low background hum of "what next," and that hum has a price even on the days when nothing actually happens. Basically? We’ve never done a trade deal with the US that would stick on this basis. Re-raise him.
And there's a second front opening behind it, because there's always a second front. Final preparations are reportedly advancing for a separate tariff hike, somewhere in the 10% to 12.5% range, under the banner of "forced labour enforcement failures" - a sweeping mechanism aimed at around 60 trading partners, the UK among them, with British officials lobbying hard against it ahead of the implementation deadlines. I won't pretend to have the fine detail nailed down, and I'd treat the exact percentages as provisional, but the shape is entirely familiar by now: one legal door gets a lock fitted, so the administration walks round and tries the next one. The direction of travel never changes; only the statute cited changes. I've said it before and the week keeps proving it - watch the levers separately, and don't mistake a court win for the end of anything.
Phew - stepping away from the transatlantic churn and the Westminster regicide, let's get back to the real-time UK property market, where Chris Watkin and the portal numbers tell you what's actually happening on the high street rather than in the Oval Office or the Members' Lobby. Back we go to the safety of the data.
As is customary, the portal numbers have been crunched and published over at Property Industry Eye, and the data for Week 24 of 2026 is where it's at, as always. If you want to know how the macroeconomic gridlock and the political theatre translate to the local high street, and the REAL property market on the ground, look no further.
And the headline this week is a soft one, so let me not dress it up: sales are down, and they're down everywhere. Across the first three full weeks of June, 75,000 UK homes were sold subject to contract - that's down 10.39% on the same period in 2025, around 7,800 fewer sales agreed than a year ago. And here's the line that caught the eye: every single UK region was in the red. Not one bucked it. Outer London led the falls at -13.13%, Inner London next at -12.74%, the North West at -11.49%. At the gentler end, Yorkshire & Humber was off 5.44% and Scotland 5.89%. So it's a broad softening, and there's no point pretending otherwise.
But - and you knew there'd be a but, because there always is when you actually read the data rather than the headline - the comparison needs its context, and Chris is scrupulous about providing it. Last June was an unusually strong month. Stack 2026 against 2024 instead and the first three weeks of June were down a much more modest 3.8%; stack it against 2023 and we're actually 6.45% ahead. So the honest reading is this: a market operating below last year's peak, broadly alongside 2024, and still comfortably above 2023. Not a market that's stopped. A market that's lost momentum against an unusually strong comparator. There is a real difference between those two things, and most of the press won't bother to draw it.
Being honest - I’d be completely unfazed if we were between 2025 and 2024; sitting instead between 2024 and 2023 is most definitely a slowdown, that now is unlikely to right itself until the World Cup is over since major football tournaments with England making any sort of progress (and this is an extended World Cup, remember - we’ve already passed the 40-year anniversary of the “Hand of God”, which was much deeper into the tournament than we already are, for those who aren’t overly engaged in the football). Major football events always slow the market down anyway - but this slowdown was happening BEFORE the football started.
Let's do the supply side properly, because it remains the story it's been all year. 36,000 new properties came to market in Week 24, with the year-to-date pipeline now at 895,000 listings. That's a whisker - 0.1% - ahead of 2025, 5.1% ahead of 2024, and 13.6% above the pre-COVID 2017-19 norm. My year-plus adage of "10% more stock than a normal market" ready reckoner is, if anything, still a shade light against that pre-COVID baseline - we're nearer 14% on the flow measure. And before anyone writes in: yes, I regularly make the point that flow isn't the same as standing stock, and the standing-inventory read - homes per branch sitting in the low thirties against a high-twenties norm - is the one I actually lean on. But both measures are telling the same story. There's more to buy than there used to be, or than there “normally” is.
Now the demand side, where the softening actually shows up. Gross Sales (Subject to Contract) came in at 24,400 for the week, against a 10-year average for the period of around 26,200 - so below par, which is new. Year-to-date gross sales sit at 596,000. Yes, that's 6.4% below 2025 - and we know exactly why, because last spring's stamp duty deadline pulled a mountain of transactions forward into early 2025 and flattered the comparison. But that same 596,000 is 1.3% ahead of 2024, 11.4% ahead of 2023, and 8.4% above the pre-COVID 2017-19 average. Net sales tell the same tale - 18,900 for the week, 464,000 year-to-date, which is 4.7% below 2025 but 6% above the pre-COVID norm. People are still moving. The Five Ds - death, debt, divorce, downsizing, and diddy ones - plug away week in, week out, entirely indifferent to who's resigned the Labour leadership or what the Orange Man posted overnight.
The friction is where the market's character really shows, and it hasn't softened at all. The gap between the average listing price - £440k - and the average sale-agreed price - £373k - sits at 18.1%, still well above the long-run 16-17% norm. Sellers are still asking for the moon, helped along by estate agents buying instructions with valuations they know won't hold. Chris had a lovely, slightly brutal stat in the show this week that puts numbers on the cost of it: of the homes listed this year that subsequently sold, around eight in ten did so without a price reduction - so getting the price right first time really does work.
Sit on the market too long and the damage compounds. Reduce within the first 28 days and your chance of selling stays around 31%; wait until roughly 12 weeks and it falls to about 14%. The problem isn't only that the asking price was too high. It's that the property spent its most valuable weeks - those first few, when the keenest buyers are looking - being quietly ignored. As Chris puts it, are you winning the instruction, or winning the right instruction? Price reductions are doing the heavy lifting as ever: 25,900 reductions in the week, 13.4% of all stock reduced in May against a longer-run average of 10.7%. And the withdrawals number remains the one that should make every overvaluing agent wince - 45.2% of all homes that left agents' books in May went unsold. Nearly half. The fall-through rate, by contrast, is behaving itself at 22.8%, below the decade average of 24.5% - so the deals that do get agreed are sticking. Fewer are being agreed; more of those that are, hold. A selective market, not a collapsing one.
On the £/sq.ft measure, which I rate above any asking-price index you'll read in the papers, May's agreed sales averaged £349.64 per square foot - 1.9% higher than twelve months ago, and 13.2% higher than five years ago. Read that carefully alongside the volume softening, because the two together tell you everything. Fewer homes are selling, but the ones that sell are achieving more per foot, not less. That is not a market in retreat. It's a market that's got fussier. And the reason I keep flagging this particular number is that it matches the Land Registry index with about 98% accuracy roughly five months ahead - direction, not quantum, and it's correlation rather than prophecy, but it's still worth more than any headline asking-price figure the papers will wave at you.
On the rental side, the average rent in Week 24 was £1,817 pcm, with the May average at £1,785 against £1,779 in May 2025. So at the headline level rental growth has gone broadly flat year-on-year - which, after the relentless climb of recent years, is itself notable. But the supply picture hasn't shifted: just 305,000 rental properties available, down from 311,000 a year ago. The structural shortage in the private rented sector isn't going anywhere, whatever the monthly average does - and hold that thought, because it ties directly into the short-term lets numbers we'll dig into in the Deep Dive.
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!
Dust off the Macroscope, then. It's a rich week for it, so let me tell you what's coming. First, the official rent and house price data from the ONS - and there's a base-effect story in the house price number that the headlines will get wrong, so we need to do it properly. Then the PMIs, my darlings of the real time economy, which came out with the economy flat-lining and a curious split between a dying services sector and a briefly resurgent manufacturing one. Then a look at the labour market through the recruiters' eyes, via the KPMG and REC jobs report, because it's telling the same story the official data did but with more texture. And then, bringing up the rear as the contract demands, the gilts and swaps - which this week have a fresh ingredient, because British political risk just got a good deal more concrete.
OK. The official ONS numbers first, and the headline you'll see splashed everywhere is house prices: average UK prices up 3.8% in the year to April, to £270,000 - the highest annual rate since before the stamp duty changes a year ago. The papers will file that under "recovery" and reach for a photo of a sold sign. And I want to be careful here, because it largely isn't a recovery at all - it's a base effect, and the ONS, to its great credit, is admirably blunt about saying so rather than letting the cheerful number do its own PR.
Here's the mechanism, because it matters and it's not hard once you see it. Prices rose a modest 0.7% month-on-month between March and April this year - gentle, unremarkable, the kind of move you'd shrug at. But cast your mind back twelve months. In that same March-to-April window a year ago, prices fell sharply, by 2.9%, as the stamp duty deadline passed on the 1st of April 2025 and the market handed back the transactions it had pulled forward to beat it. So the annual rate - which is just this April measured against last April - leaps upward, not because this April was strong, but because last April was weak and has now dropped out of the comparison. It's arithmetic, not momentum. The clearest illustration in the whole release is the North East, which posted the highest regional inflation in the country at a startling 9.9%. Sounds like a boom. Except it was minus 0.9% the month before. A region does not swing from falling prices to near-double-digit growth in thirty days because everyone suddenly fell in love with Sunderland. It swings because last spring's slump just rolled off the back of the twelve-month window. Let the pedants, like me, insist on this distinction until we're hoarse, because the entire housing commentariat is about to misread it: a base effect is not the market reflating, and anyone trading off that 3.8% as evidence the market's roaring is going to be sorely disappointed when the base effect washes out over the coming months and the underlying flatness reasserts.
The genuinely instructive number sits underneath the headline, and it's London, because London is where the base effect does NOT rescue the picture. London prices fell 2.1% in the year to April - and that's the ninth consecutive month of annual decline in the capital. Nine months of falling prices, grinding on quietly while the North East rides its arithmetic to +9.9% (massive!). And the reason the stamp duty cliff didn't flatter London the way it flattered everywhere else is itself revealing: London prices are so high that the threshold changes were almost an irrelevance there - the buyers were already well above the bands that moved, so there was no great pull-forward to give back, and therefore no weak base to bounce off.
So while most of the country gets a one-off statistical sugar-rush from the comparison, London just keeps drifting lower on its own fundamentals: stretched affordability, the highest exposure to elevated mortgage rates, a glut of flats and leasehold stock weighed down by service-charge and building-safety worries. We have, in effect, two housing markets in one country, pointing in opposite directions, and I've now said it so many times I bore myself - but the ONS data, Chris's portal regional splits, the RICS survey, the Bank's regional agents, every single independent reading lands in the same place. The North and the devolved nations holding up or rising; London and the South soft and getting softer. Two-tier, everywhere you look. The question I keep turning over is whether that's a temporary divergence that mean-reverts when rates eventually ease, or a more structural reordering of where the value sits in British housing - and I genuinely don't know, but I lean towards the latter, because the affordability gap that opened London up has been a decade-plus in the making and won't close in a quarter or two.
Onto rents, where the ONS has annual inflation slowing to 3.3% in the year to May, down from 3.5% - average UK rent now £1,383 a month on their stock measure, which captures existing tenancies as well as new lets (about 77% existing, 23% new, in a typical year), so it's the truest read of what the rental nation is actually paying rather than just what's being advertised this week. The regional spread is the now-familiar mirror image of the sales market: the North East highest at 5.9%, London lowest at 2.0%. And the absolute levels tell their own story of a divided country - average rent highest in London at £2,294 and lowest in the North East at £776, very nearly a threefold gap between the priciest and cheapest English regions. The slowdown in the rate of increase is real, and it's welcome for renters who've had a brutal few years of it. But - hedge incoming, and it's an important one - a slowing rate of increase is not a fall. Rents are still going up; they're just going up a bit less fast than they were. And with the available stock still shrinking year-on-year - Chris's portal data has it at 305,000 against 311,000 a year ago, remember - the medium-term arithmetic in the private rented sector resolves in exactly one direction, however gently the monthly numbers behave for now. Fewer homes to rent, demand that isn't going anywhere, and a slowing-but-still-positive price trend. There's only one way that tension breaks over time, and it isn't downward. File it next to the short-term lets numbers we'll dig into in the Deep Dive, because they're two ends of the same question about where the rental homes have gone.
Onto the PMIs, my darlings of the real time economy. And the June flash composite came in at 49.4, down from 49.7 in May - below the 50 line that separates growth from contraction, and a 14-month low. So that's the second month running of contraction, albeit a marginal one. Chris Williamson at S&P Global - and like me, he draws much of the weakness back to the war and its energy shock - reckons the reading is consistent with the economy contracting at around a 0.1% rate and essentially flat-lining across the second quarter as a whole. Which, frankly, is exactly the treacle I've been describing for three years now. Nothing in this print breaks that frame; if anything it sets it in concrete.
But the composition is where it gets interesting, and it's worth doing properly rather than waving at the headline, because the headline hides two opposite stories cancelling each other out. The contraction is entirely a services story. Services activity fell to 48.7, a 41-month low - that's the deepest reading since the very start of 2021, when we were still in lockdowns - with firms blaming a mix of the Middle East war and, increasingly and tellingly, domestic political uncertainty. Hold that "domestic political uncertainty" phrase, because it was written down by survey respondents BEFORE Starmer resigned on Friday, which means the business mood was already unsettled by the Westminster backdrop before the actual bombshell landed. Manufacturing, by contrast, did the opposite: output hit a 21-month high at 53.6. So how on earth is manufacturing booming while the dominant services sector stalls and the overall economy shrinks?
The answer is the sneaky bit, and it isn't really a boom at all - it's a mirage with a timer on it. Producers are benefiting from a temporary surge as clients build up safety stocks ahead of expected price rises - stockpiling, in plain English, against the war-related supply worries and the threat of goods getting dearer or harder to get. It's not durable end-demand; it's pull-forward, firms buying tomorrow's inputs today because they're frightened of what tomorrow's prices and availability look like. And Williamson is explicit that it could falter as soon as the stockpiling runs its course - indeed the survey already shows manufacturing new orders softening to a six-month low, which is the early tell that the frontloading is starting to fade. So the one apparently bright spot in the whole release is, on closer inspection, a bright spot with a very short fuse, and a fuse that's already burning down. Is there genuine underlying industrial strength there? I'm not convinced - it looks to me like fear-buying dressed up as a recovery, and fear-buying by definition borrows demand from the future and pays it back later in the form of a hole.
The two things that should actually worry Threadneedle Street are buried lower down the release, and they pull in opposite directions, which is precisely the Bank's problem. First, employment fell again - the twenty-first consecutive month of falling private-sector headcounts, and Williamson reaches for the word "worryingly" about the pace of it, which is strong language for a man who chooses his words carefully. Firms are shedding staff because their order books are thin and their confidence is thinner. Second, and pulling the other way, price pressures - though still elevated by any historical standard - eased for the second month running, helped by softer energy prices as some of the war premium came out of the oil price. So line those up: a labour market visibly weakening, which argues for cuts, and inflation pressure visibly if slowly moderating, which also argues for cuts. On the face of it, that's a Bank that should have room to ease. Except - and this is the whole tension of the rates picture right now - the Bank has just been told by the public's inflation expectations and by the gilt market that the room to cut has evaporated, war or no war, soft labour market or no soft labour market. Hold that contradiction in your head, because it's the entire story of the gilts section: the real economy is whispering "cut" while the inflation-expectations data and the bond market are shouting "you can't." I know which one wins in the current climate, and it isn't the whisper.
Let me round out the labour picture properly, because it's the bit that really matters for everyone reading this, and the recruiters see it before the official statisticians do - the KPMG and REC Report on Jobs is a survey of around 400 recruitment consultancies, the people with their hands actually on the hiring tap, so it's a real-time read where the ONS data is a rear-view mirror. And the May report had permanent placements falling at their fastest pace in ten months, with firms pulling back on permanent hiring because of low confidence and cost pressures - and explicitly blaming, in the survey's own words, the war in Iran and UK political turbulence. There's that political-uncertainty drag again, showing up independently in a second survey.
Where employers did still need bodies, though, they didn't hire permanent - they reached for temps instead, and temporary billings rose at their fastest rate in over three years. That single contrast is the most telling thing in the whole report, and it's worth dwelling on because it tells you exactly what's going on in the corporate mind. When firms are reasonably confident about the future, they hire permanent staff - it's cheaper per head, it builds the team, it signals belief in tomorrow. When they're nervous, they hire flexible: temps, contractors, fixed-terms, anything they can unwind quickly and cheaply if the outlook sours in three months. A surge in temp billings alongside a slump in permanent placements is the statistical signature of a business community that wants the work done but is too uncertain to commit to the people doing it. That's not a collapsing labour market - the work is still there, someone's still being hired to do it - but it's unmistakably a frightened one, hedging its bets.
Underneath that, the supply-and-demand of labour is loosening in the worker-unfriendly direction. Candidate availability is rising sharply, and the report is blunt about why: redundancies, fewer job openings, and people clinging to the jobs they've got out of insecurity rather than chasing new ones. More candidates chasing fewer permanent roles means the pricing power has shifted firmly from the worker to the employer - and you can see it in the pay data, where growth for both permanent and temporary staff stayed tepid, softening again from April and sitting well below historical averages. Regionally, it's the same two-tier story that runs through everything this week: the North of England was the only area to post a rise in permanent placements, while the Midlands and the South fell and London declined again. Neil Carberry at the REC put it well - momentum is being held up by uncertainty, with temporary work filling the gap while businesses tap the brakes - and Jon Holt at KPMG made the point that businesses need stability to plan and confidence to invest, and with both under pressure the medium-term jobs outlook stays subdued.
So the recruiters' read and the official read shake hands and agree: a labour market that is not falling off a cliff, but is unmistakably cooling, with the heat coming off pay - which, whisper it, is exactly what a central bank fighting inflation actually wants to see, even as it makes for a grim time at the sharp end. In the real world of hiring, where I still do a fair bit, the observation I've made before holds and if anything has firmed up: there's an awful lot of good talent out there and available right now, which is a buyer's market for employers and a tough one for workers, and that slack is precisely why the wage-driven inflation the Bank most fears is the one part of the inflation picture that's actually behaving itself. It's the imported, energy-driven, expectations-driven inflation that's the problem - not, for now, the homegrown wage-price kind. Which brings us, neatly and unavoidably, to the gilts.
OK. Time to get Gilty, or not Gilty - and this week the gilts section earns its keep, because Friday's events in Westminster have handed the bond market something real to chew on. Let me set the scene plainly first, the bit that hasn't changed. The Bank Rate sits at 3.75%, where it's been since the final cut of the easing cycle back in December. At the last MPC meeting, on the 17th of June, the Bank held at 3.75% - but on a 7-2 vote, with two members, Megan Greene and the Bank's Chief Economist Huw Pill, both dissenting in favour of a HIKE to 4.00%. Remember where we were in April: Pill dissented alone. By June the hawkish camp had doubled. That is the single most important thing to understand about the current rates picture - the pressure on this committee is upward, not downward, and it's building.
The 5-year gilt had a nice steady downwards week, as the market seemed to price in a Streeting chancellorship over a Miliband one. My current odds - Streeting 60%, Miliband 25%, Reeves 5%, the rest 10%. Still too much chance of Miliband for anyone’s comfort but the characterisation (correctly, in my view) of Miliband as a Net Zero Zealot - may well have done for him, because the bond markets NEED to be OK with whoever is chosen as Chancellor, and they would be OK with Streeting. Streeting has also done the necessary political turncoat 180 - last week “we can’t have a coronation, there must be a contest, I will be standing” - this week “I won’t be standing” - we have to read into that that there’s either significant dirty dealings in the background (and he’s already been health secretary, so there’s already been a lot of enhanced scrutiny, so it’s probably not this), or he’s been offered one of the big 3 offices of state (Home Secretary, Foreign Secretary, Chancellor) - it’s no secret he wants to be PM one day and Chancellor is the best-placed of the 3 to make that happen.
The actual numbers - an open at 4.39% on the yields drifted back to 4.283%, with only a disturbance on Friday with a breakout that reversed back before the close. The week’s low - 4.228%, which is back in the sub-4.25% range which makes everyone happier and the residential mortgages meaningfully cheaper than at some points since February 28th (the start of the Iran conflict officially). The swaps were back under 4% on Thursday’s close at 3.97% on the 5-year, which puts 5.8% financing (and indeed a bit lower it seems as margins continue to be squeezed by the lenders) back on the table. Best guess for 5-year fixed rate limited company money at the moment in 6 months’ time? 5.75% or lower, all else being equal.
Here's the structural read regardless of the exact closes. The whole rates conversation has been flipped towards hikes since the war and the oil price did their work back in the spring - I covered that flip in detail a fortnight ago and nothing this week unflips it. What this week ADDS is a second source of upward pressure, and it's home-grown: political risk. The Bank of England's own one-year-ahead Bank Rate expectation, read off the forward OIS curve, was 4.07% as of the 24th of June - down a touch from 4.10% on the 17th, so a marginal easing on the week, but still comfortably above where the rate sits today. Read that again slowly, because it's the whole story in one line: the curve is STILL pricing the base rate HIGHER in a year's time than it is right now. The market is not waiting for cuts. It's bracing for the next move to be up. Worry not about the base rate though, because as usual the 5-year gilts and swaps will move in real time, whereas the Central Bankers will move at their own pace……slowwwwww.
And now layer Friday on top. The gilt market spent the spring learning to price the fiscal trajectory of the next government, and it didn't much like any of the options on the menu. Starmer's resignation and Burnham's pole position crystallise that. The bond market reads a Burnham-led, more fiscally-expansionary administration as a higher-borrowing prospect, and higher borrowing means more gilt issuance, and more issuance - all else equal - means higher yields to clear it. Too cynical? Perhaps. But the bond market doesn't do sentiment, and a political risk premium is now a real, visible line in the UK's borrowing cost in a way it simply wasn't six months ago. I'd be careful not to overstate the immediate move - a leadership contest is not a Budget, and nothing actually changes fiscally until somebody wins and then governs - but the direction of the nudge is unambiguously upward, and it lands on a curve that was already leaning that way. Calm - IF we have a Streeting, or even better a Pat McFadden (now a distant, Propenomix-sponsored hope) - will be much better than speculation. Come on Wes.
What does all this mean for the thing you actually care about, which is the cost of money? The same as it's meant for a while now, only a little more so. 5.75% or so is still adrift of where we were a year ago, when the direction was unanimously downward and the confidence was there, which is a good part of why the year-on-year property numbers look soft right now. Direction matters more than the absolute number, to an extent - but if the maths prices a first-time buyer out, the maths prices them out, and right now the maths is not getting friendlier. KCCO on the rates, in other words. Nothing here is a reason to panic, but plenty here is a reason to keep the discipline on leverage tight - which most of you reading this will already be doing.
OK. Here endeth the lesson on current rates - here comes the Deep Dive. The through-line this week chose itself, because three separate publications landed within days of each other all describing the same wall from different sides: the houses that won't get built, the builder who's stopped trying to build them, and the generation stuck at home waiting. Then a fourth, slightly off to one side, asking an awkward question about where some of the rental homes have quietly gone. Four sources, three themes pulled from each, because every one of them rewards a proper dig. Let's get into it.
Paper One: Savills - Housing Completions Forecast for England, June 2026.
A quick frame before the themes: Savills is the consultancy whose completions forecasts the whole industry watches, and this is their five-year look-ahead. Three things in it are worth separating out - the raw shortfall, the cause on the supply side, and the awkward policy lever they reach for.
Theme 1: The Fifty-Six Per Cent.
The Summary: Savills Research forecasts that new home completions in England will average 167,500 per year over the five years to 2029/30 - just 56% of the Government's 300,000-a-year target. The cumulative shortfall against target across the period is around 662,500 homes, with total expected delivery of 837,500. The near term is grimmest: Savills models just 152,000 completions in 2026/27 - the weakest single year - before a recovery towards around 169,000 by 2028/29 as affordable housing capacity grows and mainstream sales improve. Completions had already fallen 4.1% to 190,602 in the year to March 2025, down 10.2% in the two years since the Help to Buy scheme ended. The forecast is, Savills notes, broadly in line with the 20-year average for delivery - which is to say the target was always wildly above trend.
The Propenomix Perspective: This is the number that ought to be on the front of every paper, and won't be. Fifty-six per cent of target. Not eighty, not ninety with a fair wind - fifty-six. And the framing I'd gently push back on is the reassuring "broadly in line with the 20-year average" line, because while it's true, it quietly normalises failure. Yes, we're set to build roughly what we've built on average for two decades. But the whole point of the 300,000 target was that two decades of average building is precisely what created the shortage of 2-3 bed terraces and semis I've been banging on about for years. "We'll keep under-building at the same rate we've always under-built" is not the comfort the phrasing makes it sound. The 1.5 million homes pledge - five years at 300,000 - is now, on the country's most-watched forecast, going to miss by the better part of two-thirds of a year's entire output. I remember when that pledge was the centrepiece of a manifesto. It's worth sitting with how completely the gap between the promise and the actual machinery of delivery has opened up. We'll see if anyone in the new-look government even pretends to defend the target by the autumn.
Theme 2: Consents Down Thirty-Nine Per Cent.
The Summary: On the supply side, Savills attributes the constrained pipeline primarily to a collapse in planning consents and starts. Full planning consents for new homes fell 39% in three years, to around 180,000 in 2025, and housing starts are down 31% over the same window, with new-build Energy Performance Certificates - a useful leading indicator of completions - down 16%. With fewer consents granted and fewer sites started, the pipeline of homes under construction necessarily thins, and completions follow with a lag of a couple of years. Savills does note one early flicker of improvement: residential planning applications rose 44% in the last year, back towards levels last seen in 2022-23, and a higher success rate at appeal suggests recent reforms may be starting to feed through - but the firm cautions it will take at least 18 months for that to show up in completion volumes.
The Propenomix Perspective: Consents down 39% in three years is the tell, and it's the number I'd put alongside the headline shortfall as cause-and-effect, because you cannot complete what you never permitted. This is the bit that gives the lie to any politician who stands up and blames "the builders" for not building - the builders can't build homes that were never consented, and the consents have fallen off a cliff. Now, I want to be fair and hold two things at once here, because the applications-up-44% flicker is genuine and I don't want to be relentlessly gloomy. There IS something stirring at the front of the planning pipe - more applications going in, a better hit rate at appeal, which suggests the reforms aren't pure theatre. But - and here's my hesitation - an application is not a consent, a consent is not a start, and a start is not a completion, and each of those gaps is where viability quietly kills schemes that looked fine on paper. The 18-month lag Savills flags is doing a lot of work; my worry is that by the time those applications would feed through to completions, the rate environment and the build-cost environment may have killed the viability that justified them. Applications are a hopeful leading indicator. I've been doing this long enough to know they're also the cheapest part of the process to start and the easiest to abandon. I'd want to see the starts turn before I'd call it.
Theme 3: The Demand-Lever Trap.
The Summary: On the cause of weak demand, Savills points to affordability constraints, higher mortgage rates since the spring, and rising build costs - the combination meaning limited appetite to buy at the prices developers need to build profitably. The firm's headline policy conclusion, voiced by director Emily Williams, is that "boosting demand remains the clearest policy lever for lifting delivery." Savills models that a new buyer-support scheme - a Help to Buy successor - introduced now could support around 85,000 completions by the Government's March 2029 deadline, and roughly 120,000 within the forecast window, of which an estimated 92,000 would be truly additional. Under that scenario, completions could rise to around 198,000 a year by 2028/29.
The Propenomix Perspective: Here's where I part company, gently but firmly, with the policy conclusion - and it's the same fault line that ran through the Citizens Advance proposal I picked apart a fortnight ago, so forgive me returning to it, but it keeps being the central question in British housing. Williams is right that demand support is the clearest LEVER - it's quick, it's politically loveable, and with the market this becalmed it really would get more homes built in the short run, because it lets developers sell at prices that make sites stack up. All true. But "clearest lever" and "right lever" are not the same thing, and the trap is this: we have run Help to Buy. We have the receipts. The settled finding across the serious evaluations is that a meaningful slice of it capitalised straight into higher prices and ended up in the seller's pocket rather than making homes more affordable. So pour fresh deposit firepower into a pool of houses that Savills has just told us is barely growing, and a chunk of it bids up the price of the homes that exist. Even Savills's own modelling concedes the point quietly - of the 120,000 completions the scheme might support, only 92,000 would be "additional," which means roughly a quarter of the effect is pulling forward or substituting rather than truly adding. The honest, uncomfortable position is that the quickest fix is also the one most likely to inflate the very prices it's meant to relieve. The real answer is the slow one - consents, starts, land, building - and the entire forecast is a monument to how badly we're doing the slow one. I'd rather we fixed the supply pipe than subsidised the demand into the same fixed pool. Again.
Paper Two: The Berkeley Group - Final Results, year to 30 April 2026.
A frame: Berkeley is the country's pre-eminent brownfield regeneration housebuilder, London and South-East focused, sitting on land for over 50,000 homes. When a builder of this calibre reports, the numbers are a window onto the whole sector's economics. Three things stand out - the profit decline, the land decision, and the London number.
Theme 1: The Honest Profit Warning.
The Summary: Berkeley reported pre-tax profit of £451 million for the year, down 14.7% from £528.9 million the prior year, on revenue of £2.4 billion. Earnings per share fell 10.8% to 332 pence, and the average selling price dropped to £546,000 from £593,000, reflecting a softer sales mix and lower prices. Net asset value per share nonetheless rose 9% to £39.17, supported by £233 million of share buy-backs, and the company held net cash of £363 million with liquidity above £1.5 billion. Berkeley described a frustrating year of "six months of stability, six months of disruption": a stable start, transactions hit through autumn by pre-Budget speculation over property and wealth taxes, a hopeful new year on rate-cut expectations, then the market knocked back by the economic fallout of the Middle East conflict. FY27 volumes are guided lower than FY26, with pricing expected to return to around FY25 levels.
The Propenomix Perspective: A 15% drop in profit and a £47,000 fall in the average selling price is the sound of a top-tier builder taking it on the chin in a difficult market, and I'd note - to be fair to them - that £451 million of pre-tax profit and net cash of £363 million is hardly a company in distress; the balance sheet is a fortress and they're hoovering up their own shares while they're cheap, which is what well-run businesses do when the market undervalues them. But the line that caught my eye is the rhythm of the year they describe: six months stable, six months disrupted, with the disruption coming first from pre-Budget tax speculation and then from the war. Read that as a property investor and it's a near-perfect map of the two forces that have whipsawed confidence this year - domestic fiscal fear and imported geopolitical shock - and it confirms, from the coalface, exactly what the macro data has been telling us from 30,000 feet. When the builder's own narrative of its trading year matches the gilt market's mood swings beat for beat, you know the read is right. The falling average selling price is the bit I'd watch, mind: that's not just mix, it's the market telling Berkeley what it'll actually pay, and it's saying less than it said last year.
Theme 2: They've Stopped Buying Land.
The Summary: The single most significant disclosure in the results is strategic: Berkeley has stopped acquiring new land - other than through joint-venture arrangements - on the grounds that the continuously rising tax and regulatory burden means it can no longer make its required rate of return on new acquisitions. It will instead focus on its existing holdings, which already comprise land for over 50,000 homes plus a pipeline of more than 10,000 more. The company singled out the incoming Building Safety Levy as "counter-productive" in the current environment, and Chairman Rob Perrins called for policy changes to reduce the time taken to get buildings into development and to allow builders to make a return "commensurate with the risk."
The Propenomix Perspective: When the country's most capable brownfield specialist - a company sitting on land for sixty-thousand-odd homes, with the balance sheet and the expertise to build every one - tells you it has stopped buying land because the numbers no longer work, you should put your coffee down and listen, because that is about as clear a market signal as this sector ever sends. And the reason it carries more weight than any forecast is that it's a capital decision, not a press release. Berkeley has every incentive to lobby for a lighter tax and regulatory touch, and you should absolutely discount the rhetoric for that - of course they'll paint it dark. But you cannot discount a halted land-acquisition programme.
That's them voting with the chequebook, and the chequebook doesn't do spin. What they're really saying, stripped of the diplomatic phrasing, is that at current taxes, current build costs, and current regulatory drag, the risk-adjusted return on new London development has fallen below their hurdle rate - so they'd rather buy back their own shares than buy land to build homes. Sit with the implication of that for a second, because it's bleak: the system has made not-building a more rational use of capital than building, for the best builder we've got. That's not a market failure in the abstract. That's the predictable, sit-back-and-watch-it-happen consequence of taxing and regulating the supply side while subsidising the demand side, and it's why I keep saying the Savills numbers might even be optimistic - they're forecasting a shortfall while the people who'd close it are downing tools on new land.
Theme 3: London Building Under Ten Per Cent.
The Summary: Perrins stated that structural challenges have left London delivering less than 10% of the homes it needs. Berkeley cited specific planning setbacks alongside its wins - including plans for over 850 homes on a designated regeneration site in Peckham being blocked by the Planning Inspectorate, even as it secured masterplan consents elsewhere. The company noted the Government's March 2026 "Homes for London" package as a positive step - reducing affordable-housing fast-track thresholds from 35% to 20%, grant funding for affordable housing above 10%, and 50% Community Infrastructure Levy relief for qualifying projects - but the overall message was that London's delivery machinery remains badly broken, with the pace of Building Safety Regulator approvals a particular drag.
The Propenomix Perspective: Under 10% of the homes it needs. Let that sit next to the Savills forecast we just walked through, because the two are in the most damning possible relationship - one report models the national shortfall from altitude, the other is a builder at ground level in the capital explaining, in cash and in blocked schemes, exactly why the shortfall happens. The Peckham example is the one I'd point to: 850 homes on a site specifically designated for regeneration, blocked by the Inspectorate.
Whatever the merits of that particular decision - and I haven't read the inspector's reasoning, so I'll hedge and not pretend the blocking was necessarily wrong - the broader picture of a city building a tenth of what it requires while individual large schemes get knocked back is alarming for anyone who cares about where the next generation lives. I'll give the "Homes for London" package its due, because cutting the affordable-housing fast-track threshold from 35% to 20% and offering CIL relief is a real, sensible loosening, and credit where it's due. But here's my unease: it's a demand-and-viability tweak bolted onto a system whose fundamental problem, per Berkeley's own testimony, is the time and cost and risk of getting anything approved and built at all. You can sweeten the viability all you like, but if the Building Safety Regulator takes an age and the Inspectorate blocks the big schemes, the homes still don't appear. The houses first. Always the houses first - and right now the capital isn't building them.
Paper Three: Resolution Foundation - "They're coming home," June 2026.
A frame: the Resolution Foundation is the living-standards think-tank, and this briefing assesses younger Millennials and Gen Z at a moment of rising "boomerang" living-at-home and a resurgent NEET problem. Three threads worth separating - the income story (better than you'd think), the wealth story (worse), and the policy fix (familiar, and familiar in its risk).
Theme 1: The Income Surprise.
The Summary: Against the prevailing gloom, the Foundation finds genuine generational income progress has returned for the youngest cohorts. Household incomes after housing costs for 20-26-year-olds born 1996-2001 are nearly a fifth higher than for those born a decade earlier at the same age. At the benefit-unit level - looking just at young people and any co-resident partner, stripping out parents - incomes before housing costs for those born 1996-2001 are 14% (£4,600) higher than for the cohort born a decade before. The gains are driven heavily by the labour market and specifically by minimum wage rises, which have pushed real hourly pay up by 36%, 29% and 23% at the 10th, 20th and 30th percentiles respectively since 2012. Crucially, though, the Foundation flags that exactly half of the apparent household-level progress for the very youngest comes from the income of other household members - i.e. living with, and pooling with, parents.
The Propenomix Perspective: This is the bit that genuinely surprised me, and I'll be honest about that, because the lazy narrative - the one I might have reached for myself - is that the young are uniformly worse off than their parents on every measure, full stop. And on income, this says, not quite: the youngest cohorts are actually earning more in real terms than the cohort a decade ahead of them, driven overwhelmingly by the minimum wage doing exactly what it was designed to do at the bottom of the distribution. Credit where it's due - that's a policy that's demonstrably lifted real pay for younger and lower-paid workers, and anyone who tells you the minimum wage has been an unalloyed disaster has to reckon with these numbers. But - and the Foundation itself plants this caveat, which is why I trust the work - half of the apparent gain for the very youngest is just the accounting effect of living at home and sharing a household with earning parents. Strip the parents out and the youngest cohort's own trajectory looks weaker. So the income progress is real but partly a statistical artefact of the very boomerang-living the report is about: they look richer at the household level precisely because they haven't left. And I'd add my own worry, which the Foundation also flags - this pay progress rests heavily on rapid minimum-wage rises that cannot be assumed to continue at the same clip, so it's a gain with a question mark over its durability. Earn more, yes. But on borrowed time and partly on mum and dad's sofa.
Theme 2: The Wealth Collapse.
The Summary: The wealth and assets picture is where the report darkens sharply. Home ownership among twenty-somethings is in persistent, cohort-on-cohort decline: 47% of those born 1961-65 owned a home by age 28, against just 27% of those born three decades later - a 20-percentage-point collapse. Nearly two-thirds (63%) of people in their early 20s now live "at home," up 12 percentage points since 2011. Access to ownership is increasingly shaped by parental wealth: in 2018-20, 20-29-year-olds with the highest incomes were 6 percentage points more likely to have received an inheritance or gift of at least £1,000 than those with the lowest incomes. And the real-terms wealth gap between twenty-somethings and sixty-somethings stood at over £500,000 in 2020-22, up from around £320,000 in 2006-08 - a 58% widening in a decade and a half.
The Propenomix Perspective: The ownership figure is the one that stops me cold: 47% owning by 28 a couple of generations ago, 27% now. That twenty-point collapse is not a story about smashed avocados or a feckless generation that won't save - it's the direct, arithmetic consequence of houses costing what they cost relative to what young people earn, which loops straight back to Lloyd George at the top of this Supplement and the land under it all. But the figure that really troubles me, more than the headline, is the parental-wealth one, because of what it does to the idea of a fair market.
Access to ownership is now measurably shaped by whether your parents have wealth to pass down - which is to say the housing ladder has quietly become a hereditary thing, an asset you inherit access to rather than earn your way onto. And the £500,000 wealth gap between the twenty-somethings and the sixty-somethings, widening 58% in fifteen years, is the engine of that: wealth is concentrating in the generation that bought before the great repricing, and trickling down only to those whose families happen to hold it. That should bother anyone who believes a market ought to reward work over inheritance - and it bothers me, as someone who's built what I've built through the spreadsheet rather than a windfall. We are, slowly and without quite admitting it, rebuilding a property-owning aristocracy by the back door. I don't think that's anyone's deliberate policy. It's just what happens when you let the asset run away from the wage for long enough.
Theme 3: The Starter Deposit Scheme.
The Summary: The Foundation's headline recommendation is to make it easier for young people onto the ladder, via a proposed Starter Deposit Scheme - a 5% loan calculated against the 25th-percentile price of an entry-level home, designed to tackle the deposit as the single biggest barrier to ownership. This sits alongside broader recommendations: building more homes, especially affordable ones; strengthening renters' rights and support, particularly through Local Housing Allowance; expanding mental health provision and personalised support to tackle the growing NEET share; and pausing the convergence of the youth minimum wage towards the adult rate, on the grounds that future cohorts cannot rely on rapid minimum-wage rises to keep driving pay progress.
The Propenomix Perspective: You can probably guess my hesitation about a deposit-loan scheme, because it's the same one I had about Citizens Advance and the same one I had about the Savills demand lever earlier in this very Deep Dive - it's a demand-side intervention into a fixed pool of houses, and we've now spent two whole papers establishing that the pool is barely growing. Hand a cohort more deposit firepower without building the homes, and a chunk of it bids up the price of the homes that exist and lands in the seller's pocket. Same trap, every time, and I'm starting to feel like a broken record about it - but it keeps being the right objection.
HOWEVER - and I want to be properly fair here, because I was hard on the SMF a fortnight ago and the Foundation has done something the SMF didn't - they pair the deposit idea explicitly with "build more homes, especially affordable ones," and they lead the broader recommendations with supply and with renters' protections. That's the bit that matters, and it's the bit that earns my grudging respect for the package as a whole. If the deposit scheme rode in BEHIND a genuine building programme - if the homes came first and the deposit help second - I could live with it, even welcome it, because then you're helping people compete for a growing pool rather than an inflating fixed one. Riding in front of the building, it's just price support with a rosette on. The sequencing is everything, and the Foundation at least has the sequencing pointed the right way, which is more than most. The houses first. Then, by all means, help with the deposit.
Paper Four: ONS - Short-term lets through online collaborative economy platforms, July 2023 to December 2025.
A frame: this is the official data on Airbnb-and-similar lettings, and I've put it in deliberately off to one side of the other three, because it asks a question the headline housing debate mostly ducks - where did some of the rental homes go? Three threads - the scale, the concentration, and the awkward policy trade-off.
Theme 1: A Hundred Million Guest Nights.
The Summary: The ONS, using aggregated data from Airbnb, Booking.com and Expedia, reports 100.9 million guest nights spent in UK short-term lets in calendar 2025 - an 11.5% increase on 2024's 90.5 million. Growth was broad across the UK: Wales saw the largest country-level rise at 17.4%, England rose 11.1%, Scotland 10.9%, and Northern Ireland 10.8%. The domestic share of guest nights rose 3.0 percentage points to 67.2%, with domestic guest nights up 16.7% while international nights edged up just 2.1%. August was the peak month at 14.1 million guest nights. The data captures rentals booked through the three major platforms - apartments and rooms - explicitly excluding hotels and campsites.
The Propenomix Perspective: A hundred million guest nights, up over 11% in a single year, is a properly large number, and it's the scale that I think the housing debate consistently under-weights. We spend a lot of words wringing our hands about a shrinking private rented sector - and Chris's portal data has rental stock down again year-on-year, remember, 305,000 against 311,000 - and we mostly talk as though those homes simply evaporated. They didn't. A real, if partial, slice of the answer to "where did the rental homes go" is sitting right here: a chunk of them are being let three nights at a time to holidaymakers rather than twelve months at a time to tenants.
Now I want to be careful and not overclaim, because this is the kind of number that gets grabbed by people who want a single simple villain, and short-term lets are emphatically NOT the whole story of PRS supply - not by a long way. Tax changes, Section 24, the regulatory drag of the Renters' Rights Act, the sheer hassle of being a landlord now: those have done far more to push landlords out of long lets than Airbnb has. So this is a piece of the puzzle, not the puzzle. But it's a real piece, and an under-discussed one, and the fact that domestic demand is what's driving the growth - up nearly 17% while international barely moved - tells you this is a structural feature of how Britons now holiday, not a passing post-pandemic blip that'll fade on its own.
Theme 2: Nine Local Authorities, A Quarter of the Load.
The Summary: The activity is heavily concentrated geographically. Nearly a quarter - 24.4% - of all UK guest nights fell in just 9 of the country's 361 local authorities: seven in England (Westminster, Cornwall, North Yorkshire, Kensington and Chelsea, Camden, Westmorland and Furness, and Liverpool) and two in Scotland (City of Edinburgh and Highland). North Yorkshire saw the largest absolute increase of any local authority. London held the most guest nights of any region but grew slowest, at just 6.3%. At the extremes of visitor type, the most international-dominated areas were Kensington and Chelsea (81.7% international) and Westminster (80.5%), while the most domestic were coastal: East Lindsey (98.3%), Great Yarmouth and North Norfolk.
The Propenomix Perspective: The concentration is the really interesting bit, and it's what turns this from a vague national grumble into something you can actually reason about. This isn't evenly-spread misery - it's nine local authorities out of three hundred and sixty-one carrying a quarter of the entire load, and they're exactly the places you'd guess: Cornwall, North Yorkshire, the Lakes, the honeypots. Which tells you the short-term-let pressure on housing is intensely local, not national, and that matters enormously for how you'd think about any policy response. In a Cornish coastal town or a Lake District village, a let earns dramatically more by the night to a tourist than by the month to a local family - and so the homes flow that way.
That's not greed, and I want to be clear I'm not moralising at the owners, because it's the same arithmetic that runs everything else in this Supplement and everything I do for a living: capital flows to where the risk-adjusted return is highest, and right now in St Ives that's a holidaymaker, not a nurse. The owner responding to that incentive is behaving exactly as the system asks them to. But the consequence - a hollowing-out of the actual resident community in precisely the prettiest, most pressured places, where the people who work in the town can't afford to live in it - is a real social cost, and it's concentrated enough to be a genuine local emergency in a handful of areas even while it's a rounding error nationally. Two different problems wearing the same name, which is why national policy keeps missing.
Theme 3: The Trade-Off Nobody Wants.
The Summary: The data implicitly frames a policy question that several of those concentrated areas are already grappling with: whether and how to restrict short-term lets to free up housing for permanent residents. The figures show short-term letting is growing fastest in domestic-tourism-dependent rural and coastal areas - Wales up 17.4%, the North East up 22.2% regionally, North Yorkshire and Cornwall leading absolute growth - which are frequently the same areas where local affordability pressures and resident-displacement concerns are most acute. The ONS data is descriptive rather than prescriptive, but it lands amid an active policy debate about registration schemes, planning-use-class changes for short-term lets, and council tax or licensing levers.
The Propenomix Perspective: The policy question that follows is properly hard, and I don't have a clean answer for you, which is itself worth saying in a debate full of people who are very sure. Here's the bind: clamp down on short-term lets - through planning use classes, licensing, a registration scheme, whatever lever you favour - to free up homes for residents, and you hit a tourism economy that a lot of those very same rural and coastal areas depend on for their livelihoods. The pretty Cornish town wants its young families to be able to afford to live there AND it wants the visitor spend that keeps its cafes and pubs and shops alive, and those two wants are in direct tension, because the same cottage can't be both a family home and a holiday let. There's a genuine trade-off there, and anyone selling you a costless fix - "just ban the Airbnbs and the housing crisis solves itself" - is selling you something, because the tourism income doesn't vanish quietly when you do that; it goes somewhere, and some of those somewhere-elses are local jobs.
So I'd resist both the simplistic clampdown and the simplistic shrug. What I'd actually like, modestly, is just for the debate to ACKNOWLEDGE that the homes are going somewhere identifiable rather than vanishing into thin air - because they're not vanishing, they're sitting on a booking platform earning a very rational return - and to recognise that the answer is going to be local, calibrated, and full of trade-offs rather than a single national rule. The Welsh have been experimenting with council tax premiums and planning changes on this; it's worth watching how that lands before anyone reaches for a blanket English equivalent. Measured, local, eyes-open. Not a crusade.
As we get towards the end for this week - I can't wait for our next workshop in London on 1st July. The VIP dinner afterwards, last time out, set new standards for the length, breadth and depth of conversation, and the next one will sell out again without doubt. Due diligence is the topic - and it's broader than how you're being measured by others, or how you should measure them; we cover deal due diligence in full, partners, companies and counterparties, lenders and borrowers, the whole gamut. The live DD exercise - how I do it, no stone unturned - is always the popular bit, and it's even had predictive value in past workshops as to precisely which smoke-sellers one should swerve. We close with our no-holds-barred Q+A, and the dinner gets you access to Rod and myself afterwards to talk through your own circumstances. Book your tickets for Wednesday 1st July, Central London at: https://www.tickettailor.com/events/boardroomclubconsultingltd/2177426
Above all - please remember to Keep Calm, ALWAYS listen to or read the Supplement, and Carry On. It's been a week of upheaval at the top - a Prime Minister who's resigned the leadership, a President threatening tariff walls, and a stack of housing reports all pointing at the same building shortfall - so let me end where I always do, on the fundamentals, because they haven't budged an inch. There's a shortage of 2-3 bed terraces and semis; there was fifteen years ago, and every single report I've read this week deepens it rather than easing it. Savills says we'll build barely half of what we need. Berkeley says it's stopped buying the land. The Resolution Foundation says a generation is stuck at home waiting. None of that is a market that's about to flood you with cheap stock.
"Investing in property" is not a guaranteed win, and with the rates conversation pointing at holds-then-maybe-hikes rather than cuts, and a fresh dollop of political risk in the gilt market since Friday, the discipline around leverage and loan-to-value matters more this month than last. But buying in undervalued areas, strong on the spreadsheet, strong on yield, in a market repricing slowly in real terms rather than crashing in nominal terms - that remains as close to a guarantee as this game offers, and it's how you stay ahead of an inflation rate the public has very much noticed and the recruiters can feel in the wage data. The houses still aren't being built. The people still need somewhere to live. Everything else - and there was an awful lot of everything else this week - is noise. KCCO!