The £1 deal that built a £15B empire

Hi there,

This is Chubby Wallet. The property newsletter that teaches you to be bullish when everyone else is bearish..

Here's what’s in store..

• How remote work is changing the market

• Leasehold properties to be banned

• Houses vs flats (why the gap in price is widening)

• Landlord mortgages going down

• The £1 deal that turned into a £15b development

Remember when we all thought remote work was here to stay, and moving to the countryside sounded like the dream?

Well…. about that

According to the Virgin Media O2 Business Movers Index, which tracks commuting behaviour in Britain, 75% of companies now require employees to come in at least three days a week, up from 67% the year before.

That means long commutes are back, and so is demand for homes near city centres. And for properties in the suburbs, sales are taking a major hit

Case in point: Suburban home prices saw the weakest growth of any property type for the second year in a row according to the Economist.

They also take 73 days to sell—double the time compared to 2022. Even in the luxury market, country mansions are no longer safe havens.

So… Is this the new normal?

The jury is still out…. Markets often respond with knee-jerk reaction.

For instance, during the 2008 financial crisis, first-time buyers initially flocked to buy small flats—only to see the trend reverse by 2013

So what does all this mean for you?

✅ For Sellers: Pricing strategy matters. Position your home as a hybrid-work-friendly retreat to attract hesitant buyers.

💰 For Buyers: Country homes are cheaper than they’ve been in years. If space and greenery still call your name, now’s your chance.

🏡 For Investors: Expect rising rental demand in commuter towns. Move fast, and you could lock in strong rental yields.

Final thoughts..

Will this be a permanent shift, or just another cycle? Will government policies steer the market in a new direction?

And what happens if companies relax their office mandates again?

We’re tracking all these trends—and more—in our future editions

For years, homeowners in England and Wales have been trapped in a leasehold system that feels more medieval than modern.

Buying a leasehold flat meant you never truly owned your home—your landlord (the freeholder) did.

And with that came a barrage of fees: ground rent, service charges, and bizarre rules on how you could use your own property.

But change is coming…

The UK government has announced plans to ban new leasehold flats and make commonhold the default form of ownership.

Housing Minister Matthew Pennycook called it:

And if you’ve ever had to beg your freeholder for permission to change your own windows (and pay them for the privilege), you might just agree

What’s changing?

The government’s proposed reforms will:

• Ban new leasehold flats – All new-build flats will now be sold under commonhold.

• Reinvigorate commonhold – A legal overhaul will make commonhold a more attractive and practical alternative.

• Make it easier to convert existing leaseholds – Leaseholders will have a clearer, simple path to commonhold ownership.

So what exactly is commonhold?

Think of it as a fairer way to own a flat.

Instead of a freeholder controlling the building, homeowners collectively own the freehold and manage it together.

No more third-party landlords dictating service charges or hiking up ground rents.

Who’s affected?

• Five million leasehold homes exist in England and Wales.

• 70% of new-build flats sold each year are leasehold.

• Some homeowners have seen their ground rents double every 10 years, making their properties difficult (if not impossible) to sell.

Winners and losers

• Winners: Leaseholders who will gain more control over their homes and avoid endless fees.

• Losers: Freeholders and developers who’ve profited from service charges and ground rent payments.

The changes could also make property investments more transparent, potentially attracting new buyers who were previously put off by leasehold complexities.

Will it work?

While the ban on new leaseholds is a step forward, the bigger challenge is converting existing leasehold properties to commonhold.

A draft Leasehold and Commonhold Reform Bill is expected later this year, but key questions remain:

• How easy (and affordable) will it be for leaseholders to switch to commonhold?

• Will mortgage lenders embrace commonhold properties?

• How will disputes over building management be resolved?

The bottom line

The end of leasehold is in sight, but challenges remain.

If you’re a leaseholder, keep an eye on the upcoming legislation—it could mean more rights and fewer headaches.

And if you’re looking to invest, understanding these changes could give you a serious edge.

The latest data from Zoopla just dopped and it reveals a surprising reality:

The price gap between houses and flats has hit a 30-year high..

With the average house now costing 1.7 times more than the average flat. That’s the largest gulf since at least 1995!

Supply vs. demand

More flats are hitting the market, but demand is barely budging…Listings for flats increased by 14% in early 2025, but buyer demand is only up by 1%. according to the FT.

Meanwhile, house listings rose just 5%, yet demand surged 16%. This mismatch is tilting negotiating power firmly into the hands of buyers—especially those eyeing flats.

So why are flat owners scrambling to sell? One big reason is the upcoming stamp duty hike in April.

Many are racing to offload properties before higher transaction costs kick in, further flooding the market.

Our take

Conventional wisdom says houses are the smart buy. But here’s a bold prediction: flats could be the overlooked investment opportunity of 2025.

Yes, the market is favouring houses right now. But history shows that price gaps this extreme rarely last.

The house-to-flat price ratio hit a high after the 2008 financial crisis, only to narrow once affordability pressures kicked in.

With inflation cooling and interest rates stabilizing, cost-conscious buyers might start eyeing flats as a more affordable entry point. 

Let’s not forget location, either. While suburban houses boomed post-pandemic, urban centres are making a comeback.

So, is it time to bet on a rebound?

Yes - if you’re willing to dig into lease terms, negotiate on price, and factor in service charges, you could bag a hidden gem before the market shifts again.

Houses might be in vogue today, but smart investors don’t chase yesterday’s winners.

They spot tomorrow’s trends before everyone else does.

Great news landlords: mortgage rates are finally easing

The average five-year fixed rates dipped to 5.55%, down from over 6% last year.

It’s not exactly the super low rates if 2020/021, but here’s the silver lining - it’s weeding out amateur investors.

Those with strong fundamentals are now in a prime position to take advantage.

How mortgage rates are shaping rents

The latest data shows average UK rents climbed 8.3% year-on-year, with London seeing a 10.1% increase.

That’s a £200+ monthly jump in some areas. This is driven by a chronic undersupply of rental properties (tax hikes and regulations are pushing landlords out) and higher mortgage costs forcing landlords to pass costs onto tenants

If mortgage rates fall and landlords return, a new wave of supply could cool rental prices.

The data suggests it’s possible—but only in certain areas. London and other high-demand hubs will likely stay hot, while secondary cities may soften.

How a £1 Deal became a £15 Billion finance powerhouse

For 10 years, this London swamp was a financial graveyard.

Here’s the lowdown:

• 1988 - Canadian giant Olympia & York launches the project.

• 1991 - Recession hits. Olympia & York goes bankrupt - the biggest corporate failure in Canadian history at the time.

• 1993 - Administrators take control. Half-built, no demand. 1995 - Saudi investors take a punt, they can’t fill it either.

• 1997 - A new Canadian consortium led by Brascan (now Brookfield) buys it - for just £1

That £1 came with serious strings - they had to inject fresh capital, take on all existing debts, and fund the project’s completion.

They weren’t buying a bargain.

They were buying a liability-laden, half-finished ghost town the entire market had written off.

25 years later, that £1 deal became a £15 billion super-hub.

THIS is the story of Canary Wharf.

The 5 power plays that flipped the script - and how any developer or investor can copy them:

1. SELL A VISION BIGGER THAN YOUR PROJECT

Canary Wharf was never going to win if it stayed "just another office block."

Brookfield didn’t sell offices - they sold London’s future as the No.1 global finance capital.

• Banks needed modern, giant HQs after deregulation •

• The City couldn’t deliver

• Canary Wharf became the only solution to a national problem

The best developers don’t just sell square footage. They sell a story so big the government, the press, and the market have to get behind it.

2. PLAY THE LONG GAME - THE MONEY'S IN THE MACRO

They weren’t flipping buildings - they were betting on unstoppable forces.

• Global banking expansion

• London’s dominance in European finance

• The shift from cramped City offices to purpose-built towers

The average developer plays the project. The smartest players bet the decade.

3. CURATE THE ECOSYSTEM BEFORE YOU BUILD

A few tenants wasn’t enough. Brookfield needed to move the whole finance machine east.

So they went beyond offices:

• Global law firms

• Accountants, consultants & recruiters •

• 5-star hotels & deal-making restaurants

They weren’t selling leases. They were building a complete financial gravity field.

4. BUY YOUR FIRST TENANT - THEN SELL THE REST

Nobody wanted to be first.

So Brascan made HSBC & Citigroup an offer they couldn’t refuse.

• Discounted rates

• Custom spaces

• Public deals to signal

Once they signed, every other player rushed to follow - paying full price.

The first tenant sets the anchor price. The rest pay the FOMO premium.

5. TURN THE SKYLINE INTO A STATUS SYMBOL

A skyline is a brand.

Brookfield knew if Canary Wharf’s towers became instantly recognisable, every future lease would carry a premium.

Today:

We have an office in “One Canada Square" isn’t just an address. It’s a badge of power.

The Result: 16 million sq ft prime space, Up to 120,000+ workers daily, Europe’s largest finance hub

They didn’t just save a project - they reprogrammed London’s financial map.

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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