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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..

• BTR sector faces oversupply risk

• High listings are finally ending their run

• Higher taxes could limit mortgage affordability

LATEST DEVELOPMENTS

BUILD TO RENT

BTR sector could face oversupply risk

BTR has been treated as the safest part of UK housing: strong rents, dependable demand, institutions deploying billions. But when you put collapsing net migration, rising working-age emigration, a softening housing market, accelerating BTR supply and the rapid elimination of entry-level white-collar jobs by AI side by side, the picture changes. The sector may be building for a tenant base that will not grow fast enough to support the pipeline.

The details:

• Demand is structurally weakening. Net migration has dropped by nearly two-thirds. Long-term immigration fell by 401,000 while 252,000 British citizens left, 91% of them working age. That reduces the pool of renters that BTR depends on.

• The student and young-professional engine is losing momentum. The post-pandemic student wave is now exiting the UK. Visa rules have tightened for new arrivals. These groups were central to filling large BTR schemes in major cities.

• AI is trimming the future renter base. Entry-level white-collar roles, which traditionally feed BTR occupancy, are being automated at speed. As early-career incomes weaken and job security falls, fewer households will qualify for premium rents.

• BTR supply continues to ramp up regardless of demand risks. Institutions are acquiring platforms, funding towers and expanding single-family portfolios even as the demographic and income assumptions that justify these projects weaken.

• Pricing still assumes perfect occupancy. Prime BTR yields continue to sit at levels that imply stable rent growth and minimal vacancy. Yet regulation, rising operating costs and slower household formation all point in the opposite direction.

• Housing data shows stagnation rather than expansion. Zoopla’s latest figures show only 1.3 percent annual house price growth along with lower demand and regional divergence. These conditions do not support unlimited absorption of high-density rental stock.

Why It Matters

If renter growth slows because of lower migration, higher emigration and AI-driven job losses, many BTR schemes will be competing for a shrinking pool of premium tenants. Institutions will hold that risk. Everyday investors can hold the opportunity. Modest homes aimed at ordinary earners become more valuable because they serve the broad middle of the market that BTR cannot efficiently capture.

SALES AND STOCK LEVELS

High listings are finally ending their run

Chris Watkin’s Week 46 data shows a market that’s finally cooling after two years of unusually high listing activity. New listings are slowing, price reductions are easing off and sales agreed remain steady. The market is edging back toward something that looks like normal, but with one big difference: there is still more stock than a typical year, and that extra supply continues to shape everything.

The details

• Listings came in at 24.7k for Week 46, down from last week and well below the long-term Week 46 average of 26.9k. The long run of above-normal listing levels appears to be ending.

• Year-to-date listings are now only 0.8% ahead of 2024, and although still 8–9% above the 2017–19 average, the overperformance seen earlier in the year has faded.

• Price reductions fell to 13.4k, and October’s reduction rate of 12.8% was lower than September’s 14.1%. This suggests agents are easing off price cuts as the year winds down, and the market is moving towards more typical seasonal behaviour.

• Sales agreed (SSTC) printed 20.9k, slightly under the long-term Week 46 average but still healthy. SSTCs remain up 3.4% year-on-year and 12.2% above the 2017–19 average, making 2025 the second-strongest year of the past decade for gross sales.

• Total available stock dipped from 751k in October to about 742k in November, still below the cycle peak of 763k earlier this year but well above pre-pandemic norms.

Why It Matters

The slowdown in new listings and the easing of price reductions suggest the frantic over-supply phase may be ending. With stock still high and sellers becoming more realistic, buyers who stay alert through December and January may find good value before demand picks up again. This is one of those periods where patient, well-prepared investors can move quietly while others wait for the new year.

MACRO UPDATE

UK BUDGET

Higher taxes could limit mortgage affordability

The IFS has made the Budget numbers clear: the government is borrowing more, taxes are rising, and the big spending cuts have been pushed years into the future. For the housing market, the real pressure comes from frozen tax thresholds, higher living costs and no serious reform of property taxes. All of this makes it harder for people to buy homes and harder for landlords to stay profitable.

The Details:

• Government borrowing will be £57 billion higher over the next five years than expected back in March. The tough choices have been delayed until after 2029.

• Taxes keep rising. The overall tax burden moves from 36.3 percent of GDP to 38.3 percent by 2030–31.

• The freeze on tax thresholds until 2030–31 will pull millions more people into paying higher taxes. This will reduce people’s take-home pay and cuts how much they can borrow for a mortgage.

• Investors also face higher taxes on pensions, rental income and capital gains, which makes buy-to-let less attractive and lowers future rental supply.

Why it matters

Higher taxes and frozen thresholds squeeze household budgets and limit how much people can borrow, slowing the wider housing market. But this also creates opportunities. As stretched landlords sell up and buyers pull back, well-priced homes in solid areas become easier to secure. Everyday investors who keep their costs low, avoid heavy debt and focus on affordable, good-quality rentals can pick up strong long-term assets while others step aside.

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!

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