Sunday Supplement 26 Oct 25 - The lost decade

“London isn't as sought after as it was a decade ago" - Damian Shepherd, Bloomberg News.

This week’s quote pertains to the deep dive, as I take a look at the rumoured demise of Prime Central London and how it has performed over what is now starting to be called “The Lost Decade” as far as PCL is concerned.

Trumpwatch - where we start these days. The Donald is in full flow, it seems, as we sit and realise we have not yet completed 10 months of his 48. Time seems to go quickly, but in that context some would argue it is a bit slow…..

The Government shutdown continues and the press focus this week is on the fact that alongside that, half of the White House is being demolished, unilaterally, whilst federal workers are visiting food banks to survive whilst they are not being paid. There are a ton of estimates about the financial cost, but estimates of around $15bn of output lost per week are being thrown around. Can’t ignore the fact that it didn’t stop the S&P 500 hitting another high, in the absence of meaningful Government data. There could be a shock, or a gap up, when the data is available after everything has been “sorted” - no indication of that happening just yet.

The PMIs continue whilst the shutdown is on, and that buoyed the stock market - PMIs for services at 55.2, a print which we dream of! Their manufacturing PMI also printed 52.2 for October. Inflation printed 3%, but to put that into context, expectations were a print of 3.1%, so ultimately even though that was the first time it had started with a 3 since January 2024).

The big dog is embarking on what looks like a “book signing” tour of Japan and South Korea to firm up/officially launch $900bn of investment from said nations, in what was part of a plea bargain for the tariff negotiations. If you haven’t seen his AI-generated response to the “No Kings” protests - you can’t do anything but admire just how much he really doesn’t care about what anyone else thinks of him, and I have no doubt that’s been a major part of the success that he’s achieved in life - like him or not. It won’t be that easy to actually get the $900bn and get it all deployed in the way that he wants, but let’s not concern ourselves with those little details.

It always feels like a relief to get back to the real time UK property market. Chris has had a week off the video content this week, but as usual has still provided some interesting snippets that are worth a chat. His primary thrust this week was providing context - something which I love. His main points? We are nowhere near a 2008-style market - also, we are nowhere near a 2020/21 market either. This market is very balanced - and the output we look at from Mr Watkin week-in, week-out would very much support that.

Are there doommongers and clickbaiters out there? Absolutely. But there always are, right? Many who call for a crash (one has followed me around on YouTube for nearly 2 years now) are not really recognising how much that inflation has brought the market back down to earth without a huge amount of blood on the carpet. What does Chris focus on? Is it tricky in London - there’s a resounding “hell yeah” - but it has been like that for a few years in the data. Same goes the more “Prime” you go. We know from recent weeks that houses over £500k are struggling, and the headlines from leaks from the Treasury haven’t helped (the most recent leaks are around a 1% rise in Income Tax, I note this week - the one thing that really needs to happen). Prime London is another level altogether. Just ask yourselves one question - if you could wait (which the vast majority of people who are considering Prime London can do, quite comfortably) - why on earth wouldn’t you?

I always give Chris a weekly shout out here because he’s more prolific than “just” this epic tome he releases weekly on the UK property market - he comes up with some great stats on a regular basis. Drop him a like, subscribe, and all the rest of it and some kind words for his content creation. If you are in the industry and want support in growing your business or to be a more effective communicator/be more in touch with your local market - that’s his core business - give him a shout. The article gets published on the Property Industry Eye website, and the video on his YouTube channel - @christopherwatkin

OK. What’s in this week’s macromania? Inflation. It’s big (but not that big). The Rightmove asking price report alongside the ONS Private Rent and House Prices. The flash PMIs are out. Last up? Gilts and swaps, yes of course.

Inflation was a nice surprise - the nicest for a long time. I don’t remember the last time the print was 0.2% below the consensus forecast. This is a big one as well - the biggest print of the year - simply because the September inflation number defines the increase in: Universal credit, JSA, ESA, Income Support, Housing Benefit (main allowances), Stat Mat/Pat/Sick pay, Child benefit, pension credit, DLA, PIP, and more combined (remember the main pension is already defined by the triple lock, so gets CPI as a minimum).

Alongside definitions it also significantly influences the National Living Wage increases. Back to earth, though - the CPI print was still 3.8%. The target (ha ha) is still 2%. The expectation was 4%. CPIH - which the ONS for years has preferred as a more “reflective” measure of inflation - printed 4.1% (this includes housing costs, which is more like the US version of CPI). However - printing “short” is always good news for the economy when inflation is above target. There was quite a shift in approach and attitude to interest rate cuts - the immediate effect was that a cut in November went back to odds-on according to the markets, briefly. The market moves and ebbs and flows - but probability of a rate cut this year leapt to 75% (from 40%), which appears much more likely to be in December than in November. November is still “too soon”, although if it did play out like this (November hold, December cut) it would be the first time there is “no new news” (an MPC full report) and a rate cut in this cycle. It makes sense for two more reasons, though. The first is the date of the Budget - November 26 - and it makes sense for a cautious Bank to see what happens first and how Rachel gets out of the corner that she has boxed herself into. The second is the positivity it creates going into a new year, and - let’s face it - we really need to get some positivity from somewhere! Personally - I don’t think it will be a consensus vote, but I am (currently) a hawk - because I’m a traditionalist and I’ve been an inflation bear for nearly 5 years now (and been proven right about the persistence of it, and the return of it in this cycle thanks to the 2024 budget!).

There’s still a 40% chance of November being a cut, though - I expect a close vote but I’d have 50p on 6-3 hold, in my view - I might change that before the meeting, though!

Back to the deeper detail on the inflation report, then. Core CPIH - 3.9% (down from 4% last month) - core CPI 3.5%, down from 3.6%. Everything is a bit lower than expected, but still far too high. Trends are important - I say it all the time, one swallow does not a summer make, but we have moved in the right direction in this report.

How about the conspiracy theory side of things? Did the Government “fix” the number to get a lower CPI print - it saves about £2bn on the index-linked benefits and the index-linked Gilt payments (that 0.2% undershoot) so it isn’t nothing, but in the context of £2.7tn of debt, etc., it isn’t worth losing credibility for, in my opinion. There’s also no “skin in the game” - it is no-one’s money, but it is everyone’s money, if that makes sense.

Regulars will know I love to look at OOH too - the owner occupier measure of housing. Synthetically created - but nonetheless the best metric we have. It calmed from 5.3% for August to 5.2% for September. The closest that CPI, CPIH and OOH have been since early 2024. OOH makes up 17% of CPIH and is basically what’s added to CPI to make CPIH (simplified!).

Food inflation calmed down massively - from 5.1% to 4.5%. Still too high. Transport went up significantly. Education inflation remains above 7% due to VAT on private school fees (and other changes to charitable structures). Breaking CPIH back - it represents a 2.9% increase in goods (highest since October 2023) and a 4.9% increase in services (very, very close to how much wages are still inflating, please note). CPI services were up 4.7% as we truly struggle to shake this anchor around 5% that we have found (pretty much where wage increases have been, which again is no fluke).

The ONS highlighted the fact that the OOH figure made the smallest contribution to CPIH that it had made since January 2024. So what? So, we’ve seen the part of this cycle where housing costs are forming a disproportionate part of CPIH upwards. I was waiting for some months (felt like years!) for the peak in OOH which was 8% in January 2025, so 5.2% by September 2025 feels like significant progress.

Inflation remains well above the other comparables in the EU, and also comfortably hotter than the US. However, historically, that’s often been the case - there is a different reason this time (individual policy on employers’ national insurance) but it isn’t so far out as to be ridiculous. The EU is over target at 2.6 with Germany at 2.4.

Enough. House prices - starting with the ONS report. Remember, rents go back to September, whereas the report on the house prices part is only for August. Rents are still up 5.5% year on year, as (as always) they continue to lag the moves in inflation that have occurred over the past 4.5 years. That’s down from 5.7% for August, and continues to trend downwards - it is still 9.1% in the North East though and as “low” as 3.8% in Yorkshire/Humber. The ONS has house prices up 3% to August 2025 - remember they lag the other major indices by about 5 months, so the recent drops in this figure since around June (Watkin) have not been reflected yet (although they haven’t in the Nationwide or Halifax indices yet either). What we could be seeing of course is that ever cheaper places are transacting well and the higher value stuff is sticking - we know this is the case, but if that’s happening more than ever before, the price movements suggested by the Watkin sale price psqft figure are not reflective of prices falling - instead, they are reflective of cheaper stock selling in even higher ratios than “normal”.

The July figure, nonetheless, was 3.2% so there has been a little haircut. Average prices according to the ONS? England £296k, Wales £211k, Scotland £194k, Northern Ireland £185k. Northern Ireland prices are still moving forward more quickly than the others (up 5.5% annually).

As the long trend has continued, and as Mr Watkin has referred to this week, the North continues to lead the regional tables, followed by the Midlands, followed by the South. London is bottom with a 0.3% drop in prices year-on-year now (possibly due to seasonal effects to a point - it was +1.3% YOY as of last month). It’s a big shift. The North East is “winning” (depending on which side of the fence you are on) at +6.6% year-on-year (was +6.9% YOY in July).

The rent regional table looks similar but not the same, given that Yorks are at the bottom. The Southern regions bring up the rear below the average, alongside the West Midlands, as it goes. The North are still winning! So - yields are still increasing, overall, although things are converging. Average rent in London - £2,260. Average rent in the North East - £750.

How about Rightmove and their asking prices? This is their October report (released 20th). Asking prices up 0.3% - “smaller than usual” - for October. They are also down 0.1% year-on-year. Sales agreed are up 5% according to Rightmove’s data. The 10-year average bounce is 1.1%, so 0.3% sure is modest. Why? The decade-high level of stock, which checks out, and is in line with the analysis here over recent months. September 2025 was not as strong as September 2024, but mostly because there was the first rate cut in a while which was taken into September 2024’s market, and also there was early action being taken to avoid the stamp duty “discount period” as it has now been badged, that came to an end at the end of March 2025.

So - Rightmove new buyer and new seller enquiries were both down 5% year-on-year. This is giving me more confidence that this trend of more and more listings has reached its peak in this cycle. However, new buyer demand is up 2% on the year versus 5% more listings thus far. Sales agreed YTD? Up 5% too.

The three Rightmove patented categories are closer in annual performance than they’ve been at any point this year as well. FTB asking prices 0% movement. Second steppers? +0.2%. Top of the ladder? +0.1%. That surprises me, but this is only one snapshot and I expect that to change (FTB asking prices to drastically outperform top of the ladder). That’s everything that came to market in the past month via Rightmove.

I thought the commentary was very sensible from Colleen Babcock, their resident property expert. Not enough pent-up momentum (well, none, yet, because the SDLT changes cleared it all out - there might be a little after the budget if there’s a lot of waiting and seeing AND the general take after the budget is that all is “OK” again, similar to last year unless you ran a small business!). Not enough positive sentiment (again back to the budget but overall both Consumer and Business Confidence Indices are suppressed at the moment), and of course a lot of choice in terms of the stock on the market. All agreed. A healthy dose of budget-trepidation added in by Colleen too.

Rightmove didn't say it but I did wonder. If the mooted changes for the buying and selling process DO come in, the Scottish Home Report system basically (mess around calling it something else if you want, but that’s what it is) - will that affect sales volume BEFORE it comes in because buyers will perceive they are getting a better deal? Will we see a glut of listings BEFORE the extra cost of several hundred pounds in listing a property on the open market is introduced? So, lots of sellers and no buyers in a period of a couple of months? No, because information distribution isn’t perfect, but there will be an element of impact you would think. RM do, however, approve of the fact that housing is well within the Overton window at the moment. Personally I think that is proof that if you want to, and show strategic leadership in an area (even though some of it is clearly misguided or at least badly informed), you CAN get a less popular policy area in the spotlight.

OK. PMIs. Those who know, know that I LOVE a good PMI - real time information direct from the private sector. Not everything - but absolutely the engine of growth in a healthy economy. Good news overall, even though the prints are a bit limp. On the upside, when the prints have been improving over recent months (before the Q3 “down to earth” prints), they have tended to then be revised upwards again when the final numbers come out very early in the following month. Let’s hope for the same pattern again here.

The Composite print was 51.1, and so was the Services flash print. Manufacturing? 49.6. Not over the magic 50 handle yet - but, still, a vast improvement on last month’s 46.2 and a 12 month high. Services have hardly moved there, but the composite print is up a full point.

This was a better report than I had feared we might be in for, with budget paralysis being mentioned. Logically, I hoped businesses would take the fact that all of the tax being talked about is personal (basically, although LLPs being drawn in in the past few days won’t help - but that is too recent to be included in these flash numbers) - and therefore be less worried than they were before the 2024 budget, which turned out to be completely justifiable. Let’s hope that holds up for November’s report, but I am still a bit bearish there I am afraid. The ultimate conclusion that I’ve come to, ignoring a lot of the noise and the ad hominem attacks, is that Rachel Reeves is yet to gain the trust of the private sector.

What did Chris Williamson, Chief Business Economist at S&P have to say? He hopes the September print was a cycle low, and this gives us hope that it might be (there’s time to come yet!). Output has picked up in manufacturing, and services demand is up, especially from consumers. He’s probably more positive than I - a slight uptick in business confidence, a moderation in job losses, and inflationary pressures coming “back into line with levels consistent with the BoE 2% target”. This will pertain specifically to input costs for businesses, rather than the wider economy, note. Core inflation at 3.5% puts 2% inflation comparatively out of reach for the next 12 months in my view, but it is better than the 3.7% print that was expected for core CPI of course.

Chris does acknowledge that this is consistent only with GDP growth of 0.1% monthly at most. He also points out the JLR restart is “helpful” as that was large enough to have an impact at a national level due to OEMs and indeed all members of the wider supply chain. Exports are still falling and tariffs are still getting blamed there as well. He is talking more about budget outcomes now, whereas I am still concerned over budget trepidation for November, but perhaps I am “property-biased” whereas Chris will be much more business-focused of course.

OK. Any gilt-y pleasures to consider this week? The open? 3.985% yield on the 5-year. The close? 3.906%. The week? All defined when the inflation figures came out on Wednesday - because we had that drop 0.2% below consensus, the yields took a kicking. However, since then they’ve drifted back upwards slightly - and so my conclusion would be that 8 basis points is not reflective of how significant that downside miss would be, and therefore the current underlying pattern is drifting slowly upwards rather than downwards. But that prevailing wind only lasts until the next move of significance, which can potentially be in the UK, US or even somewhere else in the world! Then again, if this was easy, everyone would do it.

Thursday’s close was 3.886%. The 5-year swap yield that ran alongside that was 3.569%, 32 basis points or thereabouts below, thus preserving that discount we’ve seen emerge over the past 12-18 months. Lower than both one month ago and one year ago, where both of those figures were closer to the 3.75% mark (much more reflective of the average of the 5-year swap yield over the past 18 months or so). Still - all these are moves in the right direction, so let’s not look a gift horse in the mouth.

How about the 30-year? 5.34% yield to open the week but “only” 5.218% at the close. 12 basis points, and therefore a 4 basis point advantage on the 5 year. The yield curve got a little shallower, but things still look very tempting for long-term, truly passive, investors.

OK. It’s time to get heavy. Last week saw such a glut of industry-relevant reports that this week missed out a little (some will breathe a sigh of relief when they read that, I’m sure!). The two items that couldn’t go without reporting on, though, were a report from Savills around Residential Development Land, and also Hamptons Autumn Market Insight.

Savills is a quarterly report centred around land values. What’s been thrown around in the industry, given that construction costs are up an “official” 17% in the past 3 years (and that was after a “gap” adjustment upwards during the pandemic itself, remember), whereas prices are up a small percentage by comparison - and the suggestion that is often used in reports is that because of this “redistribution” of costs for developers - which has very much included a margin squeeze for housebuilders, but then they were working to 30%+ profit margins back in the good old days of help to buy in the 2010s marketplace (once the shackles of the GFC had been thrown off).

However, this report leads with “land market holds firm”. This would be my overall sense of the land market as a whole in “normal”, less turbulent, times. There’s much less likely to have been leverage used to purchase undeveloped land, and the owner is much larger to be a larger asset holder (these are more general senses that I have, not backed up by my usual dose of facts and figures - if you read this and disagree, I’d love to hear from you!).

The Savs official figure is 0.3% growth in land values in the past year. So - much like a residential property (although a little lower) - inflation is still doing much of the legwork with price adjustments that have been happening since 2022, mostly. Whilst land prices are not discussed widely, real (inflation-adjusted) land prices are discussed even less, but you can be sure that real land values have dropped by more like 25% if nominal land values are down by 10% since the middle of 2022.

Savills also report a “balance”-style figure, as RICS do - and the balance is +22% for positive agent sentiment, compared to +47% last quarter. They speak of the pressure that urban land is under at this time - and in a week where it looks like Steve Reed actually reads the Supplement (I’m joking of course - but it does appear he is listening to the industry), there has been an announcement that fast-track planning, plus some CIL relief and the likes, is being offered in London at 20% affordable rather than 35% (much easier for him to do this than Rayner, of course - using the opportunity to right her mistakes in this area) - it has been great to see fairly quick action being taken and that the Government has responded to the true evidence, a genuine collapse in housebuilding. The Molior report specifically is being cited as “the one” that cut through - ultimately, it wasn’t speculation, it was reportage of the facts.

Greenfield is more resilient, according to Savs - steady demand, and constrained supply. The classic economic case for holding land prices up - and back to my overall characterisation of the market in general for land. Scotland and the North of England are seeing “Heightened engagement”, in a phrase so corporate it oozes.

Urban land values are down 3.2% year-on-year, and planning consents in the year to June 2025 were down 34% compared to the 2021 peak. The stats are in the report, but are so bad that they are only very lightly referred to.

They then revert to “mini-article” format for the rest of the report. First up? London. The analysis is all about policy and the brakes that it has put on the London market. Central London land values are down 7.2% year-on-year, and outer London is down 12.3%. Significant haircuts. Whilst this is a resi report, in a desperate search for positivity they refer to the flat office land market in outer London, and the fact that Central London office land is up 2% on the year.

Where IS the robust demand for land as housebuilding overall suffers from the 18 metre rules and viability challenges? Purpose-built student. The word that is constantly wheeled out in this area is “Robust” and the projections out to 2030 look good. It is no mistake, in my view, that development where space standards are far more liberal than in single residential, stacks up far better than the broader marketplace. There isn’t that level of understanding of tradeoff, it seems - or the regs overall have gone too far and it has been too long before having a sensible conversation about this. Again, props to Steve Reed for jumping on the affordable requirement in London very quickly, but if he ignores the fact that of 280k+ unbuild permissions in London, 90% are over 18m, then the urban problem simply will not be solved.

In the greenfield market, Savs segment by region. This is, as usual, illuminating and it won’t surprise you at all when you compare it to how that breakdown works in terms of capital values in the secondary market, which (as you know) I specialise in, week-to-week. The UK annual growth of 0.3% breaks back to 2.3% in Scotland and 1.1% in the West, where land values are concerned; the East printed -0.9% and the South East -0.6%. Same old story!

They close with “who is doing what” - and it is the major housebuilders, with particular appetite for sites from 100 to 250 homes, who are replenishing land banks. Public companies are active. SMEs are struggling more - Savs point to the fact that they struggle with deploying incentive schemes in the same way that the PLCs can - using them on 12% of sales versus 24% of sales in the PLC sector. SMEs therefore have a “limited appetite” for new sites and are focusing on delivering existing commitments. S106 appetites are also low from Housing Associations, although healthy in Wales where transfer values are fixed - Savs implication there being that “that system works”. Land led schemes - the £39bn commitment are favourably mentioned as helping to stimulate demand for these schemes.

The final chapter is on when planning changes will start to filter through into increased applications - “second half of 2026” is the current estimate, which sounds reasonable. Like everyone, Savs put emphasis on the next cuts in the base rate - which makes more sense for development financing specifically because it takes place at the shorter-term end of the yield curve, whereas I question the relevance of it for 5-year debt and house prices overall, as they have been very stable (5-year fixed rates/swap rates) for the past 18 months in the face of 5 base rate cuts.

Interesting stuff, I hope! Hamptons quarterly market insight, then. What’s their take? Cautious but steady. The same story that we keep hearing - and what we would expect. They speak of a modest uptick in activity, but an element of underlying fragility - a very fair characterisation of what I see in the “heart” of the nation, it seems, at this time. They refer to the more hawkish tone in the recent Bank of England report, although this week’s news around the lower inflation print than expected is the most dovish sign for some time, in my view (they weren’t to know, that was revealed after the report!). Aneisha Beveridge, their head of research, makes the point that I’ve also been making over recent weeks - swap rates had nudged upwards, so the expectation was higher product rates when existing product allocations run out. Happily, the news this week has taken the swap rates back to where they were in early August, under 3.6%.

London prices are now +8% in the past 5 years against an inflation backdrop of 28% (that’s CPI rather than RPI). On one side that improves affordability, of course - on the other it provides a limited incentive for discretionary sellers, a good point well made. There’s then a look towards the budget and Hamptons concentrate on 3 of the 50,000 seeming property tax or structural changes that have been mooted; shifting SDLT from buyer to seller, annual property taxes (on top of council tax) rather than SDLT, and removing the capital gains tax exemption on private homes. They point out that the first two require a massive systemic overhaul (which is why they won’t happen, of course) whereas the third could be done more quickly (although they stop short of saying what political suicide it would be).

Then, the report moves to focus on a “lost decade” - the sort of phrase more often associated with Japan and its economy that struggled from 1990 onwards - in Prime Central London. Land reg data shows a 5% price rise in the past 10 years (so, with inflation over that time period being more like 40%, that is some real-terms adjustment - but don’t forget the meteoric rise from the early 90s onwards). Some data suggests that PCL values have fallen over the past 10 years. The “PCL premium” is therefore down from 55% to 31%, the difference between truly prime and a posh suburb of London, basically.

The average gross gain since purchase, however, since people have on average owned those homes for over 10 years, is £599,000. The first time that has been under £600k since 2012. 24% of those who sold a prime home this year lost money (that’s gross, as well, so consider SDLT etc!) - compared to 7% the year before. Hamptons actually stratify this by year of purchase in the report, and this breaks back to 60% of sellers this year who bought in 2015/16 lost money when they sold in the past 12 months. This 10-year mark that is approaching is analysed as Hamptons by potentially kicking off a self-perpetuating cycle of stagnant transactions, because the 10-year ownership level is a key one before moving/selling up.

There’s an argument put forward by Hamptons that reform to SDLT could restore liquidity to the PCL market, but I find it unlikely that Labour would embrace too much that would lower the tax burden on prime priced property - however, just not having to find 12-17% up front on top of the rest of the transaction, and paying something each year - even if it was “equivalent” - might be interesting if it ever was to happen. I’m not holding my breath on that front, though - this is not a radical Government, but one of “tweakers”, as I’ve said before.

Next up is an analysis of what 4 mooted policy changes would do to the London and the South market - with CGT changes, or moves to an annual 0.48% property tax, both being rated as having the very highest level of impact, because these are the most expensive property markets in the country and the argument is that the more expensive, the more impact that would be made.

They then discuss the shift of SDLT incidence, and conclude that it would impact the mid to upper market the most - and also the mooted increase of National Insurance on Landlords (personal name) - having the greatest impact on personal name landlords under 65 (presumably due to NI dropping off at retirement age - the whole system there is crying out for a change!).

Hamptons then discuss their lettings index. Of course, as you can tell, their stats are biased towards London and the South East. According to them, rent is down 0.4% in the year to August 2025. This is drastically different from the ONS/dataloft sample discussed earlier in this article, of course, and also - as I always say - represents “New rents” when it is being published or offered up from a portal or estate agency source, not existing rents. So there is an important distinction there.

Demand is down 4%, and supply is up 8%, as Hamptons sees it. They make a couple of distinctions as well - air fares are up 81% in 5 years and water bills are up 61% - rent is up a fair chunk less than a number of other household costs (which is a longer-term trend, it is just that everything has gone up quite so much that it is often difficult for people to make this distinction - the average tenant also spends a lot more on rent than they do on air fares or water bills as well, of course, so the absolute rises make a big difference - not just the percentage differences).

They also point to rising rents as being one of the reasons that the Bank hasn’t been able to hit its 2% inflation target. I’m not so sure about the validity of this argument, particularly because the inflation target is based on CPI, and not CPIH (as the ONS would actually “prefer”, from a technical perspective), so housing costs are not comprehensively included. Nevertheless, they make a good argument - rents could have gone up more, or less - plenty has gone up more that is “day to day” expenditure, but rents have outpaced inflation (although not on their index in the past year, of course!).

Hamptons always measure some interesting stats which don’t seem to feature anywhere else (or in the ONS, specifically) - that have good day-to-day relatability. For example - the average “discount” for a renewed tenancy is £90 a month on an average rent of £1,387 (so that’s about 6.5%). The “record” in the recent cycle was £170 per month in October 2023, so the gap is narrowing.

Before the pandemic, that discount was between £10 and £20, which is why rent rises on existing rents will continue to outstrip inflation for some time yet, in my opinion.

How about the number of people leaving London? Slowing down. Hamptons don’t mention changes to second home rules, which I would also think would have had an impact - but that the “return to the office” continues, and the subdued growth in prices of both rents and purchases are having an impact, which of course they will. In the first seven months of 2025, there were 31,620 homes bought outside the capital, accounting for 5.3% of deals. It was 5.9% before the pandemic, and it was 63,600 in the first seven months of 2021. Hamptons describe a shift in focus from aspiration to affordability, with Dartford being the most popular destination (measured by the percentage of transactions there that take place from people moving outside of London). Greater London is now up 23% in the past decade - compared to 55% elsewhere. This vindicates a great deal of what I was saying on social media in 2015 because the top in the London market was very, very clear and data-backed - but instead at the time I was absolutely pilloried by people telling me I had no idea what I was talking about. That will do with the “I told you so” for this week!

How does this sort of shift play out? People moving out of the capital can afford on average 533sqft smaller properties (32%) than they could in 2015. 2 large double bedrooms (it is the size of a generous one bed flat, which would be the analogy I’d prefer!).

The other factor is a regional shift - we knew that in 2021 there was a huge preference for the Cotswolds, Cornwall and Devon. That has changed to staying nearer to London, congruent with the return to the office. It all still sounds like a pretty good deal - the average move gets 121% more space - but in 2016 that number was over 200%.

There’s been a heavy focus there on London specifically - which isn’t a particularly relevant market to me in many ways, because since I really started to scale which was only 2015 or so, London has been completely off the table for me in terms of both yield and capital growth. However - over recent years I’ve come to appreciate much more how much the fate of London and the surroundings shapes policy quite so considerably around the country. The overall feeling is that there is a bright future there, IF the current administration can do what they’ve promised and actually cut the regulation that will make a difference (the FT, incidentally, ran an article this week about how housing was the area where regulatory cuts HAD made the most difference, so I absolutely despair as to the other “cuts” in regulation!).

Now - as I draw this week to a close, the next Property Business Workshop is prepared, and as we turn our eyes to 2026, the next workshop is online and available! We start the year with a bang, discussing strategic planning and how to get the most of the next 12 months, with some of our own methods and takes on productivity and time management, alongside systems and processes. The other half of the workshop is about the most common pain point in SME property businesses - accounts, bookkeeping and group accounting. This is about measuring asset performance - not “how to use Xero”, but “how to make the most out of financial information” - what should you be seeing monthly, and how should you interpret it properly and use it strategically to grow your business, safely but quickly? 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. Join us! Thursday 22nd January 2026; Central London; https://bit.ly/pbw9

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. It will be slow(ish), and take a little while longer to get off the ground - and the amount of stock around is still keeping things suppressed at the moment - but as the market continues to improve slowly, it is a case of “here we go” in my opinion.