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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..

• Market heading into year end slow down

• Why UK borrowers could face rising mortgage costs

• Why sub 80 year leases suddenly became valuable

LATEST DEVELOPMENTS

LISTINGS OVERVIEW

Market heading into year end slowdown

The UK housing market cooled in Week 43 as new listings fell and sellers began preparing for the usual winter slowdown.

The details:

• Listings: 27.5K new homes hit the market last week , according to Chris Watkin of Property Industry Eye - down 1.8K week-over-week.

• Stock levels: 1.53M homes have been listed so far in 2025 , 9.1% above the 9-year average (skewed by 2020) but only 1.5% higher than 2024.

• Prices: The average asking price for Week 43 listings dipped under £400K — the lowest in four years (vs. £434.4K in 2024).

• Reductions: 18.3K price cuts last week, down from 21.3K — but still 23% higher than the 5-year average.

• Sales activity: 23.5K homes went sold subject to contract, in line with the 9-year Week 43 average (23.8K) and up 4.2% YoY.

• Market balance: 751.8K homes sat on the market at the start of October — up 15K MoM, still shy of the August peak (763K). For context:

  • Pre-pandemic “sticky” market = ~660K

  • Sellers’ market = <600K

  • Oct 2025 = +4% vs Oct 2024 (which already marked an 8-year high)

• Prices per sq ft: October SSTCs averaged £338.38/sqft, up 1% from September and back to August levels

• Fall-throughs: Steady at 24.2%, right on the long-term average.

  Why It Matters

The UK housing market is normalizing after two years of oversupply and volatility. Listings are falling, pricing is correcting, and buyer demand holds steady - signs of a healthier equilibrium.

Manufacturing data reinforces this. The PMI hit 49.7, with factory output rising for the first time in twelve months. Still below 50 (contraction territory), but the trajectory suggests the industrial downturn is bottoming out.

The read: Both sectors point to stabilization, not decline. For property professionals, that means planning for a steady but competitive 2026 , a market where success will rely less on rapid price growth and more on accurate pricing, efficient marketing, and quality stock selection.

INTEREST RATE IMPACT

Why mortgage rates may rise

UK government bond yields rose slightly last week as markets adjusted expectations for when the Bank of England might start cutting rates.

The details

5-year gilt yield: Opened 3.888%, closed 3.933% (Bank of England, 8 Nov 2025). When yields rise, borrowing costs increase, which can push mortgage rates higher and make buying property more expensive.

5-year swap rate: Ended 3.574%, down from 3.795% a month ago (ICE Benchmark Administration). Changes in swap rates often influence mortgage rates and the cost of borrowing for property.

30-year gilt yield: Rose from 5.181% to 5.252% (UK Debt Management Office). When long-term yields go up, it usually signals expectations of higher inflation or stronger growth, which can make long-term mortgages and financing more expensive.

Market expectations: Forecasts suggest a Bank Rate of around 3.43% in 12 months, though economists expect it may stay closer to 4%. This gives an indication of how mortgage rates and borrowing costs could move over the next year.

Bank of England rates: The Bank held interest rates at 4%, pausing after five cuts since August 2024 (BoE statement). This means borrowing costs for mortgages and property development remain steady for now, but we shouldn’t expect big drops in rates soon.

Why It Matters

Rising yields signal that borrowing is likely to remain costly. This benefits savers but increases mortgage and business loan costs. For the property market, higher financing costs could slow sales and weigh on prices, even as the economy continues growing at a measured pace.

REGULATORY UPDATE

LEASEHOLD REFORM

Short lease savings not guaranteed

The government is changing the rules for lease extensions in 2025. These changes include fixed “deferment” and “capitalisation” rates, caps on ground rent, and the removal of “marriage value.” While these reforms can save money for short-lease flats, tweaks to the rates could reduce those savings or even increase costs for longer leases.

The Details:

• Deferment rate: This is a percentage used to calculate how much a leaseholder pays for the freeholder’s “future value” of the property. Think of it as the freeholder’s expected windfall when the lease ends.

  • Lower rate: Makes the future payout worth more today, so you pay a bigger premium now.

  • Higher rate: Makes the future payout worth less today, so you pay less now.

• Capitalisation rate: This is used to turn yearly ground rent into a single lump sum for the lease extension.

• Ground rent cap: The government will limit ground rent to 0.1% of the property’s value when calculating the premium. For example, a £300,000 flat would have a maximum of £300/year. This reduces the cost for leases with high ground rent.

• Marriage value abolished: For leases under 80 years, freeholders no longer get a cut of the flat’s increase in value. This often saves £10,000–£30,000.

• Lease length matters:

  • Under 80 years: Big savings (40–70%) because marriage value disappears and fees/ground rent are capped.

  • 80–90 years: Small savings (10–30%) because deferment tweaks might slightly raise costs.

• Government aim: These changes should simplify and speed up lease extensions, avoid disputes, and make costs more predictable. But the final savings depend on the exact rates the government sets.

Why it matters

If you have a short lease, these changes could still save you a lot of money, often tens of thousands of pounds. But for longer leases, tweaks to the deferment or capitalisation rates could increase your costs. Understanding these terms and planning ahead- such as serving protective notices and getting a quick valuation remains important. The final rules will decide whether the reforms are truly beneficial or only help certain leaseholders.

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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