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..

• New numbers show highest UK property listings in a decade

• Bank of England survey signals just two price cuts in 2026

• Why rental growth is slowing

LATEST DEVELOPMENTS

MARKET UPDATE

Data shows highest property listings in a decade

UK housing supply has risen to the highest levels in 10 years, with new listings reaching 133,139 by week four of 2026 slightly above 2025's equivalent and ~28% over pre-pandemic levels, while price reductions hit 20,500 that week (second-highest in a decade).

The details:

• Buyer demand is solid: 26,060 SSTC sales in week four beat the decade average (~24,400) and ranked third-highest ever, trailing only 2021's post-lockdown spike.

• Net sales sit in third place over the last ten years, behind 2021 and 2025, when volumes were lifted by the 2025 stamp duty cut-off and low interest rates in early 2021

• Available rentals climbed to 285k in December 2025, from 258k in December 2024 and 235k in December 2023, suggesting supply is once more on the rise (more on this later..)

Why It Matters

The market has moved from scarcity to oversupply. This limits price growth causing higher stock levels and frequent price reductions to give buyers the upper hand. Northern regions (North West, North East, Scotland) are expected to outperform the south due to better affordability, higher rental yields (often 7-8%+) while London and the South East face flatter or weaker performance from higher supply and affordability pressure.

INTEREST RATE OUTLOOK

Mortgage rates to stay elevated in ‘26..

The Bank of England’s latest Market Participants Survey shows that financial markets expect only modest rate cuts in 2026, followed by several years of stability around 3.25%. The message is clear: policy is normalising, not returning to the ultra-low era of the 2010s

The details

• The survey, conducted in late January 2026 with 92 market participants, shows a median expectation that the Bank Rate will remain at 3.75% through the February and March meetings.

• From there, respondents expect gradual easing, with the rate falling to around 3.50% by late spring and reaching approximately 3.25% by the end of 2026.

• Looking further ahead, the same respondents see rates stabilising around 3.25% through 2027, 2028 and into 2029, rather than continuing to fall.

• When asked to estimate the “neutral” rate, the level where policy neither stimulates nor restricts growth - most participants placed it between 3.0% and 3.5%.

Why It Matters

This "higher-for-longer" outlook at 3–3.5% keeps borrowing costs elevated (current 5-year fixed BTL rates ~4.4–4.9% average, best deals ~3.4–3.8% at lower LTV). Investors should target high-demand areas with proven gross yields >8% such as: Sunderland (9.3%, avg rent £659, property £84,924), Aberdeen (8.3%), Burnley (8.2%). Lock in 5–10 year fixed mortgages now to reduce costs. Stress-test your deals at 5%+ rates to maintain positive cash flow.

RENTAL MARKET UPDATE

RENTAL DEMAND

Rental growth drops to low single digits

The UK rental market is cooling as 2026 progresses. After several years of rapid rent rises, demand is easing due to improved supply in some regions, bringing rental growth to low single digits.

The Details:

• Zoopla’s latest data shows annual rental growth running at roughly 2.0–2.2%, with expectations of around 2.5% growth across 2026 far below the peaks seen in 2022–2023.

• Rightmove’s Q4 2025 tracker reported that average advertised rents outside London fell 1.1% quarter-on-quarter to £1,370 per month, marking only the second quarterly decline in five years.

• Goodlord’s January 2026 index recorded longer void periods, signalling weaker tenant competition. Annual rental inflation across England slowed to 2.3%, down sharply from 4.6% a year earlier.

• ONS data to December 2025 showed UK private rents rising 4.0% annually to £1,368 per month, the lowest inflation rate since May 2022. London recorded the weakest regional growth at roughly 2.1%.

• Tenant enquiries have fallen significantly in some cities. In parts of Manchester, reported demand has dropped by around 40%.

• Net migration has fallen reducing the pool of available tenants significantly and putting downward pressure on rents.

Why it matters

Residential rental demand is weak in early 2026. Zoopla reports a 20% year-over-year decline and voids are up 13%. However, commercial property shows stronger rental demand (industrial take-up is above 10-year average) and higher net yields for small-scale acquisitions (6–8% net versus residential's typical 4–5% after voids, tax, and maintenance). Investors looking to stay ahead of the curve should be eyeing smaller commercial assets in the North.

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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