BTR's £6b boom - where to invest now

Hi there,

This is Chubby Wallet. The newsletter that teaches you how to profit from property trends before they go mainstream..

Here's what’s in store..

• General market update

• Build to Rent (BTR) is eating the UK housing market

• The council’s new super-powers

• The poor kid from New York that rebuilt the world trade centre

The real-time property market data (courtesy of Christopher Watkin) shows we're experiencing quite the interesting scenario. Week 17 of 2025 brought some eye-opening numbers:

• New listings rose to 42,600 in just one week—the biggest start to a year since 2015

• 16.5% more listings than the 9-year average

• 6.4% more listings than the same period in 2024

• 11.9% ahead of pre-pandemic 2019 levels In simple terms? There's about 10% more stock than normal on the market right now.

The price reduction

Here's where it gets interesting. Price reductions hit record levels:

• 13.4% of stock reduced in price (compared to 2024's average of 12.1%)

• A record 27,168 price reductions nationwide in one week

• For perspective, bull markets of 2021/2022 saw only 10,416-12,711 weekly reductions

• That's 2.5 times as many reductions as a bull market and 50% more than a normal market

You'd think this spells disaster, but...

Sales are booming

Surprisingly, it was also the biggest week for sales in nearly 3 years:

• 28,300 homes went SSTC (Subject to Contract)

• Sales are up 10% on 2024 figures

• Up 19% compared to 2017-19 pre-pandemic markets

• Fall-through rates stayed below the 7-year average at 22.7% 

But notice the maths: 42,600 new listings vs. 28,300 sales. Stock continues to build… meanwhile, Halifax's latest figures show the classic north-south divide intensifying:

• Northern Ireland leads with 8.1% year-on-year growth

• Scotland and Wales follow at 4.6% and 4.7% respectively

• North West England at 4.1%

• London trails at just 1.3%

• South West England brings up the rear at 0.9%

As Adam Lawrence noted:

The BoE's big move

The Bank made its first interest rate cut last week, moving from 4.5% to 4.25%, but it wasn't the unanimous decision many expected.

The vote split was surprisingly contentious at 5-4:

• 5 voted for 0.25% reduction

• 2 voted to hold rates steady (including the Chief Economist)

• 2 voted for a bigger 0.5% cut

What this means for mortgages

Despite the rate cut, don't expect dramatic changes in mortgage rates:

• 5-year bond yields closed the week at 4.032%

• The 5-year SONIA swap was at 3.669%—36 basis points below gilts

• The market predicts Bank Rate will bottom out at 3.5% by Q2 2026

One expert even suggested that:

The inflation picture

The BoE is predicting:

• Inflation to peak at 3.7% in September this year

• Return to the 2% target by early 2027

But many remain unconvinced, suggesting "3% is the new 2%" might be our reality for the foreseeable future.

Looking ahead

Despite all the data points, the market's current message seems to be “go steady..”

As Halifax put it, we're seeing "remarkably stable house prices" nationally, though with significant regional variations.

The UK’s Build-to-Rent (BTR) sector is smashing records—£6B in projected 2025 investment, 130K+ operational homes (double since 2021), and 56K units under construction.

But dig deeper, and the real story gets way more interesting….

The data breakdown

• 60% of new BTR units are outside London/Greater Manchester—a seismic shift from the "London-first" era.

• Birmingham is the new king, with 16K+ units in planning/development (Moda’s Loudon’s Yard, Cortland’s Broad Street).

Why this matters

• Yield-starved investors are fleeing London’s premium prices.

• Young professionals/remote workers are driving demand in Bristol, Manchester, Leeds.

• Co-living (15% of pipeline) is booming outside London (46% of co-living beds).

The stabilized asset gold rush (and why it’s a trap)

£1.1B poured into stabilized BTR assets in Q1 2025 (up from 27% to 48% of multifamily deals).

However, stabilized doesn’t mean "safe." If rent growth cools, some buyers might find they have overpaid for stagnant yields.

The smart money move is to look for value-add plays (older stock needing refurb) vs. chasing "finished" assets.

Where to deploy capital now

• Regional Cities (Birmingham, Manchester, Bristol): Higher yields, lower competition.

• Single-Family Rentals (SFR): The next BTR megatrend—families can’t buy, so they’ll rent.

• Co-Living: Niche but exploding in student/young professional hubs.

Red flags to watch

• Overpriced stabilised assets (yields are trending down).

• Legislation risk (Renters’ Rights Bill = more compliance costs).

• Co-living oversupply in some markets (check local demand first).

Final Thought..

The BTR sector isn’t just growing—it’s maturing. London’s reign is fading, co-living is the wild card, and the real money will be made by those who see the shifts before they’re obvious.

The Renters' Rights Bill is coming in hot for 2025, and it's bringing some game-changing investigatory powers for local councils.

Councils can now demand documents from just about anyone connected to your rental property—your bank, your accountant, even the plumber who fixed that leaky tap last summer.

It's like having your entire property management history laid bare on the kitchen table for inspection.

Warrantless entry powers

Councils can now enter business premises without a warrant if they suspect violations. Your letting agency office isn't just your workspace anymore—it's potentially an open book.

For residential properties, they still need warrants, but once they have one, they can use "reasonable force" to enter. It's less "May I come in?" and more "I'm already inside, hope you don't mind!"

The "rented accommodation legislation" trap

This isn’t just about the Renters' Rights Bill—it links to EVERY rental law, including:

• Housing Act 2004 (HMOs, licensing, hazards).

• Protection from Eviction Act 1977 (illegal evictions).

• Database breaches (did you forget to register that tenancy deposit?).

Your survival guide

Before you consider selling all your properties and moving to a remote island, take a deep breath. There's a path forward….

1. Embrace documentation: If there was ever a time to become obsessive about record-keeping, it's now.

2. Compliance: This isn't just a box-ticking exercise anymore—it's a way of life. The stakes are high (up to £40,000 per breach), but so is the opportunity to run a tight ship.

3. Build your A-Team: Everyone connected to your property needs to understand the rules of the game. Your contractors, your accountant, your letting agent—they're all potential witnesses in the court of council opinion.

The silver lining

Amid all this regulatory tightening, there's actually good news for professional landlords:

• The playing field is leveling. Rogue landlords will find it harder to undercut you by cutting corners.

• Property values for compliant rentals could increase. As the market adjusts to higher compliance costs, properties with proven compliance history will likely command premium prices.

• Tenant relationships to become more valuable. Happy tenants are less likely to trigger investigations. Investing in good relationships is now not just good ethics—it's good business.

Looking ahead

While lending rates remain favorable and demographic trends show continued demand for rental properties, this regulatory shift will undoubtedly reshape the market.

We're likely to see:

• Consolidation as smaller landlords without systems exit the market

• Professionalization of the sector with better standards overall

• Technology adoption accelerating to meet compliance demands

The Bottom Line

Is the regulatory landscape getting tougher? Absolutely.

But are professional landlords who take their responsibilities seriously going to survive and thrive? Also yes.

The key question isn't "How do I avoid these rules?" but rather "How do I build systems that make compliance automatic?" 

Because in the property game of 2025, the winners won't be those with the most properties—they'll be those with the best systems.

In 1956, Larry Silverstein spots a run-down building on 23rd Street with zero dollars to his name. His only asset? Pure audacity.

After dozens of rejections, Phil Green at a small Delancey Street bank lends him $15,000 on nothing but a promissory note—the first domino in what would become a real estate empire.

The $100,000 gamble

Weeks later, an appraiser offers $100,000 for his contract—before a single renovation.

His father advises:

Silverstein declines life-changing money and instead:

• Assembles 25 investors at $10K each

• Renovates on a shoestring (spray paint, surplus lighting)

• Doubles the rents from $0.50 to $1.00 per square foot

The deal that changed everything

1999: The Port Authority sells the World Trade Center.

Silverstein, the underdog against massive REITs, bids $3.2 billion, finishing second. When the winner backs out, he closes in just 21 days.

Six weeks later: 9/11. The towers fall. That night, his wife tells him:

Over the next decade, he does exactly that, creating the new World Trade Center that now defines Manhattan's skyline.

The pressure principle

For Silverstein, pressure isn't something to avoid—it's fuel to harness:

• Building around a power substation without disrupting service

• Recovering when an anchor tenant suddenly backs out od a lease contract

• Rebuilding after unimaginable tragedy

Each impossible challenge becomes a stepping stone.

The blueprint

• Start small, think big. His empire began with surplus lighting.

• Transform competitors into collaborators.

• Create win-wins where others see zero-sum.

• Transfer risk intelligently. Note how he negotiated away personal guarantees. Reject short-term windfalls for long-term vision.

That $100K declined built billions. He created self-imposed pressure. And consistently took on challenges that force growth.

As Silverstein puts it:

For a kid who started with just a promissory note and chutzpah, that impact now towers over Manhattan.

That's it for this week folks. Each week we'll cover strategies, updates and insights to help you succeed in real estate. We love this stuff!

If you Have questions or just want to chat, We want to hear it.

See you next time in your inbox!

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