How to find hidden UK property gems

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

• How to pick a winning property market in 2026

• Uk auctions still showing resilience

In the world of UK property, inventory has hit 751,797 homes. London's sales ratio is half the national average, and construction shrinks for ninth straight month.

Lets dive in..

The Market Numbers

Chris Watkin's Week 39 data:

• 34,300 new listings (down 1,000 from Week 38)

• 751,797 homes on market (up 15,000 from September 1st)

• 25,600 sales agreed (up 5.3% year-on-year)

• Fall-throughs at 24.6% (slightly above 24.2% average)

Price per square foot on sales agreed in early October shows £336.54/sqft, down from £338.78 in August and £346.45 in June.

That's a 2.9% drop in three months. When these sales complete and hit the Land Registry in early 2026, expect annual price growth revised down to 1.5-2% for 2025.

London vs The Rest

London's sales-to-listings ratio (the percentage of listed properties that actually find buyers) in August-September was 40.8%. The rest of the UK? 75.4%.

For every 100 properties listed outside London, 75 find buyers. In London, only 41 find buyers. The other 59 sit unsold.

Halifax confirms the regional split in price growth:

• North East: +4.8%

• North West: +3.9%

• Northern Ireland: +6.5%

• South West: -0.2%

• London: +0.6%

• South East: +0.2%

Halifax's overall index dropped 0.3% in September, dropping annual growth to 1.3%. Amanda Bryden, their head of mortgages, called it a "sideways market" (up only 0.3% this year).

Budget uncertainty and weak demand above £500k (down 4%) and £1m+ (down 11%) have frozen London's expensive areas.

RICS: Surveyors Turn Pessimistic

RICS balance (the net percentage of surveyors reporting price increases vs price decreases) is 15. Still negative.

Buyer demand and sales agreed have been on the decline for three months, and is expected to continue into 2026.

Key findings:

• 12-month sales expectations: -9% (first negative since August 2023)

• Price expectations: Only +12% expect prices to rise in 12 months

• Landlord instructions: -38% (most negative since May 2020)

• +23% expect higher rents in next three months

Takeaway: Rental supply is contracting while the Renters' Rights Bill looms. Fewer landlords, steady tenant demand = continued upward pressure on rents.

Possible changes in upcoming budget

The October 30th budget will likely include:

• Additional landlord taxation

• Capital gains changes affecting property investors

• Potential stamp duty adjustments

• Possible mortgage interest relief modifications

Why these targets? Property is visible, politically acceptable to tax, and generates immediate revenue.

Impact on mortgage rates: Government bond sales keep this rate higher than it should be. Don’t expect your mortgage rate to fall despite Bank of England base rate cuts.

Impact on construction: With limited money for housing investment, construction is in decline (PMI 46.2 for nine months). The 1.5 million homes target looks increasingly unrealistic.

What To Do Now

Buyers

• Don't rush before October 30th—wait for budget clarity on stamp duty

• Stock levels favor buyers (751,797 homes, 10.4% above average means more choice)

• Focus on areas outside London where sales ratios are healthier (75.4% vs London's 40.8%)

• Have financing ready for November once uncertainty clears

Sellers

• Price competitively—14.1% of stock being reduced vs 10.7% historically

• London properties above £500k face weakest demand (sales ratio 40.8%)

• Consider delaying listings until post-budget (November)

Landlords

• Brace for additional tax measures (high probability)

• Rental supply reduction (landlord instructions -38% means fewer rental properties coming to market and higher rent forecasts - +23%)

• Consider timing of transactions around budget announcement

• Document all expenses meticulously ahead of potential tax changes

Picking a Winning UK Property Market

Step 1: Consider Starting Small (Towns Under 250,000 People) 

• Why this helps: Less competition from institutional investors and London-based funds.

• The approach: Not a hard rule—if Steps 2-4 (below) look exceptional, town size matters less.

• Example: You might pass on Manchester (560,000 population) in favor of Grimsby (88,000 population).

Smaller towns tend to fly under the radar of large investors who need to deploy millions quickly.

Step 2: Look for Supply Constraints (Markets Where Building Loses Money)

What's "supply"? The number of rental properties available in the market.

The challenge: Too much supply typically means falling rents and prices.

What to look for: Markets where building new homes is financially unviable.

Key Metric: "Basis" vs "Replacement Cost"

• Basis = Average sale price per home (UK average: £295,000)

• Replacement Cost = Cost to build a new equivalent home (UK average: £250,000)

Favorable scenario: Basis £100,000 vs Replacement £250,000

Developers would lose £150,000 per home in this market so they're unlikely to build, supporting long term rental and price growth

Step 3: Assess Demand Stability (Avoid Population Decline)

Goal: Look for stable population over 5 years minimum. Growth is a bonus.

Suggested Checklist:

Step 4: Verify Discounts Exist (Track 3-6 Months) 

What's a "discount"? Buying below market value with potential to sell higher later.

Key Metric: "Yield vs Cap Rate Delta"

• Yield = Your annual rental income ÷ purchase price (e.g., 8% = £8,000/year on £100,000 property)

• Cap Rate = Market's average yield (UK average: 5.5%)

• Delta = Your yield minus market cap rate

Think of it: If the local market you’re targeting averages 5.5% but you're getting 8%, you have a 2.5 percentage point (250 basis points) advantage.

Suggested Target: 150+ basis points delta

How: Monitor Rightmove for 3 months. If you see 3+ deals consistently hitting your target, it may be worth pursuing.

Why These Markets May Offer Advantages

• Large funds often don't track these towns closely

• Lower stamp duty: Properties under £250k typically face minimal stamp duty

• Structural supply constraints: Building profitably is often financially challenging

• Stable employment base: Government contracts, established industries

The UK auction market continues to show resilience and steady activity in September 2025. (EIG Auctions)

Here’s a breakdown of the latest trends, regional highlights, and what’s driving the market.

National Auction Snapshot In September 2025, the auction market held strong:

• Lots offered increased by 2.2% to 4,637 compared to last year

• Lots sold rose by 2.2% to 3,313, with a success rate of 71.4%.

• Total raised was £680.5 million, down slightly by 1% from last year, suggesting buyers are becoming more selective.

• Year-to-Date (October 2024–September 2025): The market saw 40,593 lots offered (up 4.8%) and 28,218 sold (up 2.1%)

Residential Market (Current vs Sep 2024)

• Lots offered: Up 2% to 4,053

• Lots sold: Up 1.6% to 2,905

• Total raised: Down 3.2% to £533.4 million, indicating some price sensitivity

• The success rate was 71.7%, slightly lower than last year.

Commercial Market (Current vs Sep 2024)

• Lots offered: Up 3.4% to 584

• Lots sold: Up 6% to 408

• Total raised: Up 7.6% to £147.1 million, showing strong investor interest.

• The success rate improved to 69.9%.

Regional Highlights (July–September 2025)

The third quarter showed varied performance across the UK:

• Yorkshire & The Humber: A standout with totals raised up 26.3% to £103.8 million, driven by strong residential demand (up 56.2%).

• North-West: Performed well with sales up 9.9% and totals raised up 10.7% to £159.4 million

• East Anglia: Saw solid gains with totals raised up 17.6% to £61.2 million

• South-West: Strong growth with lots offered up 21.7% and totals raised up 7.7% to £147.3 million

• London: Weaker performance with totals raised down 7.1% to £267.3 million.

• North-East: Struggled with a 23.8% drop in totals raised to £39 million, particularly in residential sales (down 27.2%).

Final Thoughts

The auction market remains active despite economic shifts.

Buyers are engaging selectively, but confidence persists, and auctions continue to offer a transparent and efficient way to buy and sell properties.

Regional differences highlight the importance of local market conditions, with areas like Yorkshire and the North-West showing particular strength

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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