Rental practices that could cost you £40k

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..

• Property listings are up 15.7%

• London’s pulling power remains strong

• Rental practices that could cost you big time

• The party guy who became a property tycoon

The UK property market is buzzing… listings are up 15.7% compared to the 9-year average, and sales are holding steady despite the Easter slowdown.

But here’s the twist: more stock means more price reductions (13.4% of listings saw cuts vs. 12.1% in 2024).

Think of it like a Black Friday sale—vendors are adjusting to attract buyers in a market where choice is plentiful.

Sales agreed (SSTC) are 11% higher year-to-date than 2024, proving demand is still strong…

But with fall-throughs hovering around 23.6%, buyers aren’t rushing into bad deals—they’re playing the field.

Interest rates & affordability:

The Bank of England is likely to cut rates to 4.25% next week, with some policymakers even pushing for a 0.5% drop.

Swap rates are dropping, meaning mortgage pricing is softening—good news for borrowers.

But there’s a catch: affordability remains a hurdle. Nationwide reported a 0.6% monthly dip in house prices, likely due to the stamp duty changes in March.

First-time buyers (FTBs) drove higher borrowing (£13bn net lending in March!), but with mortgage approvals flat at 64,300, the market isn’t overheating—it’s just adjusting.

Supply vs. demand

Savills’ latest report highlights what most experts predicted:

The result?

Rents keep climbing, homelessness is rising, and temporary accommodation costs hit £6m per day.

Shelter predicts 44% more households in temporary housing by 2029 unless social housing gets a £100bn+ cash injection.

Meanwhile, Savills argues that easing mortgage rules (like the 15% cap on >90% LTV loans) could boost FTB demand.

Political wildcard

The local elections showed Reform gaining ground, and their housing policies could shake things up:

• Scrapping stamp duty under £750k (a game-changer for mid-market homes).

• Fast-tracking brownfield development (but will it be enough?).

Opportunities & risks ahead

• Opportunities: Lower rates, more stock, and pent-up demand could fuel a summer rebound. Investors are piling into BTR (Build-to-Rent) and suburban single-family homes.

• Risks: Affordability barriers, construction delays, and political uncertainty linger. Rental yields look attractive, but capital growth may slow.

The market isn’t broken—it’s recalibrating. For buyers, negotiation power is strong. For sellers, realistic pricing wins. And for investors? Cash flow beats speculation.

Even with global economic uncertainty causing some businesses to pause, the pull of London for companies relocating staff hasn't faded.

In fact, enquiries from businesses looking to move employees to the UK jumped 8% in April compared to last year, according to Knight Frank data.

John Humphris, head of relocation and corporate services at Knight Frank, points to London's "position as a safe and stable place to grow a business and invest." 

This stability is attracting firms from the energy, finance, professional services, legal, and tech sectors, drawing in a diverse range of nationalities, including a significant number from the US.

Rental market squeeze

While long-term demand is up, London's rental market is tight.

The number of new lettings listings in prime central and outer London in the first quarter of 2025 was 13% below the five-year average (excluding 2020), Rightmove data reveals.

Meanwhile, the number of prospective long-term tenants was down by just 2%, according to Knight Frank.

This situation coupled with the needs of relocating employees, could present a significant opportunity for short-let operators utilizing platforms like Airbnb and other Online Travel Agencies (OTAs).

Why the squeeze?

Several factors are contributing to this tight supply:

• Renters’ Rights Bill: This upcoming legislation, making it harder for landlords to reclaim properties, has led some to sell, reducing the pool of available long-term rentals.

• Tougher Green Regulations & Rising Mortgage Costs: These are also putting pressure on landlords, potentially deterring new long-term investments.

Rent hike on the horizon?

Unsurprisingly, long-term rents are starting to creep up. Average rents in prime central London rose 0.9% year-on-year in April, the highest jump in six months.

Prime outer London saw an even bigger increase, with rents up 1.5% annually. Opponents of the Renters' Rights Bill predicted this, warning it would make life more difficult for tenants.

This increase in long-term rental costs could further incentivize companies to seek cost-effective short-term solutions for relocating staff.

The short-let angle

The rise in corporate relocations to London could increase demand for short-term lets.

However, the London short-term let market isn't without its complexities as illustrated below:

Future Outlook

As more companies choose London for relocation, the pressure on the overall rental market, including short-term options, is likely to intensify.

While long-term tenants may face rising costs and limited availability, short-let operators who understand the local regulations and cater to the needs of relocating professionals could find a growing market.

Below is a table showing whether a specific action will be subject to a civil penalty, rent repayment order, or something else..

*Up to £7,000 for first or minor non-compliance, and up to £40,000 for serious or repeated non-compliance, or criminal prosecution with an unlimited fine.

*The landlord may have to repay up to two years' rent if First-tier Tribunal imposes Rent Repayment Order

Adam Neumann: Early Days & Pivot

• 1979: Born in Israel, raised across 13 different homes

• 2010: Co-founded WeWork after selling Green Desk, securing $15M from developer Joel Schreiber

• 2012: Made first major personal real estate move: purchased top floors of Woolworth Building for $68M

Key Real Estate Plays

• 2012-2019: Pioneered controversial strategy of purchasing buildings personally, then leasing to WeWork

• 2019: Amassed $90M personal property portfolio including:

• 60-acre Westchester estate

• 6,000 sq ft Gramercy Park condo

• Two Hamptons properties

• $21M California mansion

Financial Maneuvers

• 2019: Extracted $700M from WeWork before attempted IPO

• 2019 (Sept): Resigned as CEO following investor pressure

• 2019 (Oct): Secured $1.7B exit package from SoftBank

• 2021 (May): Renegotiated settlement: $106M cash, $92.5M consulting fees, ability to sell $578M in WeWork stock

The Comeback

• 2022 (March): Shifted focus to Miami property market

• 2022 (August): Launched Flow, a residential real estate startup backed by Andreessen Horowitz

• 2024 (Feb): Attempted to buy back bankrupt WeWork

• 2024 (May): Acquired Whalebone magazine, renamed it Flow Trip

• 2024 (Oct): Launched Workflow, a direct WeWork competitor

By The Numbers

• 2015: Named EY Entrepreneur of the Year

• 2020: Net worth dropped to $750M, falling off Forbes billionaire list

• 2022: Returned to billionaire status

• 2024: Current net worth: $2.2B

The Neumann Playbook

• Leverage vision to secure outsized investment before proving model

• Create personal financial pressure as motivation for corporate growth

• Blur lines between personal and corporate investments

• Maintain resilience and networking prowess through setbacks

• Pivot rapidly when model fails, preserving wealth and investor relationships

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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