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..

• Why your money buys less house now

• Prime Central London faces stagnation

• Landlords lose leasehold reform appeal

LATEST DEVELOPMENTS

MARKET UPDATE

Why your money buys less house now

House prices haven't collapsed like people predicted. Instead, your money buys less house than it did two years ago because of inflation. Prices stayed flat in pounds, but dropped in real terms. No panic selling, no mass repossessions — just a slow, silent price decline.

The details:

• National picture: Prices per square foot are flat. Adjusted for inflation, they're down. This is a slow landing, not a slump.

• London under pressure: The Capital is down 0.3% year on year making it the weakest region. Properties over £500k, especially in prime central London, are barely moving, with sales volumes on track for a 10 year low

• Sales and listings: October asking prices up 0.3%, below the 10-year average, and down 0.1% year-on-year. Sales agreed are up 5% this year — activity remains healthy.

• Buyer groups: Price movements for first-time buyers, second-steppers, and top-end movers are now nearly identical. First-time buyers will likely lead any rebound once mortgage rates drop.

• Lettings market: New lets are down 0.4%, supply up by 8%. Renewal discounts offered to existing tenants have narrowed to £90/month from £170 last year indicating landlords are regaining ground.

Your move

If you have cash or access to private capital you can buy income-producing BTL assets below market value. Acting early allows you to capitalize on a buyer’s market before mortgage rates drop and prices edge upward again.

SALES AND STOCK LEVELS

Prime Central London faces stagnation

Over ten years, prices in Prime Central London (PCL) rose just 5% in cash terms. Factor in 40% inflation and you've lost 35% in real money. Some postcodes have fallen in actual pound terms. The premium PCL once commanded over outer London has collapsed from 55% to 31%.

The details

• Average gains collapsing: Typical PCL sale in 2025 made £599k gross gain, first time below £600k since 2012. People are holding for over ten years now.

• Loss-making sales rise: 24% of sellers took a loss this year, up from 7% in 2024. Of 2015/2016 buyers, 60% sold at a loss in the past year.

• Tax uncertainty: Hamptons identifies four reforms freezing the market: CGT on main homes (biggest PCL impact), annual wealth tax at 0.48%, stamp duty shift to sellers (12–17% top rates), and employer NI on individual landlords.

• SDLT reform floated: Hamptons suggests spreading stamp duty over time instead of paying upfront could get people moving again.

Why It Matters

• PCL faces a structural problem: owners holding unrealized losses won't sell, buyers won't pay 2015 prices, and tax policy uncertainty prevents both sides from committing.

• Transaction volumes remain suppressed: Without policy clarity or a significant price adjustment, the market stays in low-activity mode.

• Three possible outcomes are possible:

  • Prices fall enough to clear inventory and attract buyers.

  • Policy changes are sufficient enough to unlock supply.

  • Time forces more sellers to accept losses.

• Current data suggests all three are happening slowly, but none dominantly.

REGULATORY UPDATE

LEASEHOLD REFORM

Inside the 164 page court judgement that just saved leasehold reform

A High Court ruling spanning 164 pages has dismissed every challenge mounted by major landlords against the government's leasehold reforms. We've extracted the key points from thousands of paragraphs of case law, valuation evidence and constitutional argument so you don't have to.

The Details:

• What was challenged: Six groups of major landlords (pension funds, estates, charities) took the government to court claiming the below reforms in the 2024 Act broke human rights law by not paying them enough when tenants buy their freehold or extend their lease:

  • Capping ground rent at 0.1% of property value when calculating what tenants pay

  • Removing "marriage value" (Profit to freeholders from property value increase on short lease extensions)

  • Making landlords pay their own legal costs instead of tenants paying them

• The landlords' argument: They said the reforms transferred billions in value from landlords to tenants unfairly. They claimed the rules should only help people living in their homes, not investors or landlords renting properties out.

• The government's argument: Leasehold is fundamentally broken. Tenants pay near-freehold prices but get a "wasting asset" that loses value over time. They're then forced to pay again to stop their property becoming worthless or unsellable. The reforms fix this imbalance for all tenants.

• The court's decision: All challenges rejected. The judges ruling:

  • The 0.1% ground rent cap is justified. Ground rents above this level affect whether properties can be sold or mortgaged. Landlords still get paid for ground rent up to the cap.

  • Removing marriage value is justified. This value only exists because of the unfair "wasting asset" problem Parliament is trying to fix. Landlords still get the investment value of their property (rent income and future ownership rights).

  • Making each side pay their own costs is fair. This matches normal property sales. Tenants shouldn't pay landlords' bills when they're forced to buy out the lease to save their own investment.

• Key legal reasoning: The court found Parliament had a "wide margin of appreciation" (freedom to decide) on social and economic policy. Leasehold creates an inherent power imbalance: tenants pay freehold-level prices but get a time-limited asset forcing them to pay again later. Fixing this system-wide unfairness justified the reforms.

Why it matters

• The Leasehold Reform Act 2024 stands. When it comes into force, leaseholders will pay significantly less to buy their freehold or extend their lease.

• The ruling confirms Parliament's view that leasehold as a system is "fundamentally unfair" and needs radical reform, not tweaking.

• Landlords who bought freeholds expecting continuing income from marriage value and high ground rents have lost that bet. The court said they took investment risk in a sector ripe for reform.

• The judgment doesn't just uphold these specific reforms—it endorses the principle that fixing structural unfairness in leasehold justifies major changes to what landlords receive, even if it costs them billions.

• This probably isn't the end. Landlords could appeal or take the case to the European Court of Human Rights, but the detailed reasoning makes that difficult.

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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