How to earn £84k a year in passive income

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

• 10 myths busted about the new renters bill

• How to earn £84k a year in passive income

The market remains active with high inventory, steady sales, and softening prices, creating opportunities amidst an economic slowdown.. Data is sourced from Watkin’s report unless otherwise noted [Watkin, Property Industry Eye, Week 36, 2025].

Property market dynamics

The UK property market in Week 36 shows robust listings outpacing sales, with inventory levels suggesting a buyer’s market.

Price reductions and steady transaction volumes indicate opportunities for negotiation, though pricing is slowing down..

• Listings and Inventory: Week 36 saw 37.4k new listings, with 1.3 million homes listed in 2025, 10.8% above the nine-year average and 3.1% ahead of 2024. Inventory dropped to 736,333 by September 1, down 25k from August, a rare seasonal decline compared to 710k in August 2024

• Sales and Reductions: SSTC sales reached 25.6k, near the 2025 average of 26.2k, up 6.2% year-on-year. Price reductions totaled 26,280, with August’s rate at 11.1%, above the five-year average of 10.7%, signaling deal-making potential

Pricing trends

August’s pricing data reflects a cooling market, with SSTC prices per square foot down from recent months, suggesting modest annual growth. Real-terms price declines and stable fall-through rates underscore a market favoring buyers

• Price Movements: August SSTC prices averaged £338.78/sqft, up 1.41% from August 2024 but down 2.2% from June’s £346.45, pointing to 1.5-2% annual growth

• Transaction Stability: Fall-through rates were 24.8%, slightly above the 24.2% average, with net sales at 19.2k, up 5.2% from 2024 and 10.1% above 2017-19

Macro Picture

Economic indicators reveal challenges, with a slow job market, persistent inflation, and rising bond yields. These factors, alongside regional disparities in rents and house prices, create a cautious environment for property investment

• Labor and Inflation: Payrolled employees fell 142k year-on-year, unemployment held at 4.7%, and CPIH inflation dipped to 4.1%. Food inflation rose to 5.1%, and private rents increased 5.7%, outpacing house price growth at 2.8%; ONS, August 2025].

• Yields and Rates: 5y gilts closed at 4.134%, 30y at 5.558%, with borrowing at £18bn against £12.75bn expected. The Bank of England held rates at 4%, with a 28% chance of a November cut.

Outlook

The market offers opportunities for buyers, particularly in high-growth regions like the North and Midlands, as inventory remains elevated.

However, economic pressures—rising yields inflation, and labour market weakness—suggest caution.

The Renters’ Rights Bill will get Royal Assent by October 2025 and start in 2026. There’s been a lot of confusion online and in industry sources.

This report, based on Suzanne Smith’s the Independent Landlord article, clears up myths and explains the bill’s key points

Clearing up myths

False claims have spread, like immediate eviction bans or forcing landlords to use agents. ..so let’s set the record straight and help landlords and tenants understand what’s coming in 2026.

1. No-Fault Evictions Are Gone? Not Quite. The Bill abolishes Section 21, but landlords can still evict tenants without fault for reasons like selling the property, moving in family, or redeveloping. The term “no-fault eviction” is misleading, as these options remain.

2. Section 21 Ends on Royal Assent? Nope. Section 21 will stay in effect until the new assured periodic tenancy system starts in 2026. Landlords can serve valid Section 21 notices until at least spring 2026, and existing notices remain valid if court action is filed within three months of the commencement date.

3. Self-Managing Will Be Too Hard? Not for Everyone. The Bill is complex, but capable landlords can self-manage with free government guidance and resources like this newsletter

4. Mandatory Letting Agents? False. There’s no requirement to use letting agents. Landlords can continue self-managing, though choosing qualified agents is wise if you opt for professional help.

5. Repaying Rent Paid in Advance? Only in Specific Cases. For new tenancies post-2026, rent paid in advance doesn’t need repayment unless the tenancy ends early. Clauses requiring advance rent will be unenforceable, but voluntary payments after signing are fine.

6. Remove Rent Review Clauses Now? No Need. Existing rent review clauses remain valid until 2026, then become void automatically. New tenancy agreements can omit these, but there’s no rush to edit current ones.

7. Rent Guarantee Insurance Is a Must? Not Always. Insurance can mitigate risks, but it’s not mandatory. Vetting tenants thoroughly—e.g., calling previous landlords—can reduce the need for it, especially with reliable tenants.

8. Section 13 Notices Every 12 Months? Almost. Rent increases via Section 13 notices must align with rent due dates, requiring slightly over two months’ notice. The 12-month rule starts from the last Section 13 increase, not informal agreements.

9. Rent Controls Are Coming? No. The Bill doesn’t impose rent controls. Tribunal decisions based on market rent may stabilize increases, but there’s no arbitrary cap like inflation-based limits.

10. No More Guarantors? Untrue. Landlords can still require guarantors. The only change is that guarantor liability ends if the tenant dies. A proposed ban on guarantors didn’t make it into the Bill.

How to Earn £84,000 a Year in Passive Income

This guide draws from real deal examples and expert approaches in UK markets like Yorkshire and the Midlands. It outlines practical steps to build a high-yield portfolio quickly, focusing on bold moves rather than slow, single-property buys

Set Your Income Replacement Goal Start by aiming for full income replacement, not just extra cash. Target £7,000 per month (£84,000 per year) through two strong deals. This shifts property investment from a long-term retirement plan to a fast path to financial freedom.

Define Your Target: Calculate your living expenses and aim to cover them entirely with rental income. For example, two deals each generating £3,500 monthly can hit £84,000 annually.

Mindset Shift: Treat property as an immediate income tool, not a distant goal. Use available cash or financing to make quick, high-impact purchases

Buy Blocks of Flats in cheaper high yield areas: Focus on entire blocks of flats, often with shops, instead of single properties. This creates instant scale, lower costs per unit, and higher yields from day one.

Spot Opportunities: Look for mixed-use blocks in affordable regions like Yorkshire. Example: A 7-flat block bought for £250,000 (including works) yields £38,000 yearly at 15.2% gross.

Streamline the Process: Use one commercial loan for financing, one legal process for purchase, and centralized management to cut costs and effort

Target Deals with Built-In Uplift: Seek properties where income can grow fast after purchase, like through rent reviews. Buy based on future value, not just current rent, to boost cash flow quickly.

Assess Uplift Potential: Check for easy wins, such as rent increases. Example: A 5-flat block acquired for £305,000 starts at £2,500 monthly but rises to £3,750 after reviews—a 50% jump.

Conduct Due Diligence: Review leases and market rents upfront to confirm achievable growth, ensuring the deal's true value emerges soon after closing .

Build Your Support Team: Assemble a network of experts to handle sourcing, financing, legal, and execution risks. No one succeeds alone in these deals—rely on pros to de-risk and speed up the process.

Key Team Members: Include a commercial broker for loans, solicitors for multi-unit buys, tax advisors for planning, and architects for any upgrades.

Mitigate Risks: Use bridging finance for quick closes, planning advisors for hurdles, and the team to avoid common pitfalls like legal delays

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.

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