This high end area is seeing falling house prices

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..

• General market update

• Prime central London undergoing a market adjustment

• Navigating the bridging lender landscape

• How an ex-tyre fitter became a £B property tycoon

The UK property market right now is like a supermarket aisle after a restock—more options, some discounts, but still a few pricey items.

So, what’s really going on? Let’s break it down...

Supply glut

For years, we’ve been in a seller’s market—low stock, high demand, and prices climbing like a kid on a sugar rush.

But now? Supply is surging.

According to Chris Watkins (Property Industry Eye) 37,600 new listings hit the market in late May—8% above pre-pandemic levels.

Total available homes? 756,675—way above the "seller’s sweet spot" (sub-600,000).

Landlords are exiting, adding fuel to the supply fire…

What does this mean?

Buyers have more negotiating power—sellers who overprice are getting realistic fast. In May, 14% of listings had price cuts (up from 12% last year).

One expert commented:

More homes are great, but can people afford them?

Swap rates suggest long-term fixes around 5.7-6%, with some forecasts even pointing to 7% in five years

First-time buyers are stretching at 3.58x income multiples—not crazy, but not easy either.

Rents are still climbing (7% YoY), especially in the North East (+9.7%), while London cools slightly (+7.7%).

Good news? - Lenders like LendInvest are cutting BTL rates (now from 3.44%), throwing in £500 legal fee contributions—a small win for landlords feeling the squeeze. (Note the 7% product fee though)

Will the BoE cut or not?

The Bank of England’s June hold (5.25%) had a dovish twist—Ramsden switched to vote for a cut, sparking bets on an August reduction (80% priced in).

But…

Core inflation (3.5%) is still way above target.

UK gilt yields are creeping up, hinting the market expects higher-for-longer rates.

According to Adam Lawrence (Propenomix)

What’s next?

• For buyers: More choice, better deals—but don’t expect a crash. Prices are flat to slightly rising, not plummeting.

• For sellers: Price right or stagnate—homes priced correctly sell 22% faster (Rightmove).

• For investors: Cash flow over speculation. The North offers growth, the Midlands yields, and London? Steady but slow.

Final thought: This isn’t a boom or a bust—it’s a recalibration.

The smart move? Stay nimble, lock in good rates, and focus on value.

As Watkin says: "Flat is the new up."

London's pricy neighborhoods are experiencing what economists politely call "market adjustment" Here’s what went down..

Numbers don't lie

• High-end property deals in London crashed 35.8% compared to May 2023.

• Properties "under offer" dropped 22.3% 

• Meanwhile, available inventory jumped 11.7% 

Classic supply-demand economics playing out in real time.

The ultra-luxury segment (properties £5M+) also saw sales down nearly 15% year-over-year.

But available stock in this bracket hit a "record high" after rising 22.4% over 12 months.

The non-dom exodus

Remember those wealthy international buyers who traditionally picked up trophy London properties.? They've basically ghosted London.

Why?

Labour's decision to close the non-dom tax loophole, exposing worldwide assets to 40% inheritance tax starting April 2024.

The Result

A mass migration to tax havens like UAE, Monaco and Switzerland..

Rental market

The rental scene isn't exactly thriving either..

• Lettings agreed down 21.7% annually

• New rental instructions fell 5.2%

• Available rental stock dropped 4.6% 

But here's the silver lining for landlords: rents still climbed 3.3% annually and sit 32.9% above pre-pandemic levels.

The bigger picture

• Average monthly rent: £1,339 (up 7% annually)

• Average house prices: £265,000 (up 3.5% annually) 

• April GDP: contracted 0.3% (larger than expected)

The numbers tell a sobering story. While the US "mints 1000 millionaires a day" (per UBS Global Wealth 2025), the UK has been shedding wealth..

For perspective:

Bottom line

Smart money recognizes that Prime London is trading at a discount to its true value.

For investors with cash and a long term view, the current environment offers a solid entry point to one of the world’s most liquid luxury markets.

Navigating the bridging lender landscape

Scene: Sarah’s standing in her newly bought auction house—and £175,000 in bridging finance in her account.

It all feels like progress... until it doesn’t.

The hidden risk

That £175,000? It might not be as secure as she thinks.

Many lenders don’t use their own capital—they borrow it. If their funding dries up, so does hers.

The loan approval is just the beginning. What matters is whether the money keeps flowing until you're done.

Who's really behind your bridging loan?

• The individual person: Personal funds (pension, savings, etc.)

  • Pros: Fast decisions, flexible, personal

  • Cons: If their life changes, so does your funding

• The big company source: A mix of own funds + institutional money

  • Pros: Professional systems, larger loans

  • Cons: If their backer pulls out, so do they

• The crowdfunding source: Pooled money from hundreds of investors

  • Pros: Transparent process, competitive rates

  • Cons: Nervous investors = frozen funds

• The broker network source: Connections to various lenders

  • Pros: More options, expert matchmaking

  • Cons: Weakest lender in the chain = your risk

Sarah’s wake-up call

She bought at £250k with £175k bridge + £75k of her own. The plan: renovate in £20k phases, sell at £350k.

• Month 1–2: Roof done, all good.

• Month 3: She calls for the next drawdown.

• Response: “Sorry, our funding partner’s pulled out.”

Suddenly:

• House half-renovated

• No electrics, no mortgage options

• £175k still owed

• £20k already spent, and zero income

She’s trapped. can’t remortgage. can’t sell. can’t finish. Interest keeps stacking.

Questions to ask to avoid this

• Where does your money come from? Push for specifics—not vague answers.

• What if your funding source pulls out? Good lenders have Plan B.

• Have you ever pulled funding mid-project? Honest lenders will explain how they handled it.

• Can I speak to 3 recent customers? No references = walk away.

Selecting a lender

Day 1:

• Research 5–8 lenders

• Check reviews and forums

• Shortlist top 3–4

Day 2:

• Call each

• Ask the 4 critical questions

• Request client references

• Clarify all terms and funding structure

Day 3:

• Call references

• Validate claims independently

• Check legal docs and backup plans

Day 4: 

• Compare findings

• Choose based on stability, not just rates

• Negotiate terms and plan for contingencies

Paul Sykes was born into a working-class family in Barnsley, failed his eleven-plus, and left school at 15 with no qualifications.

Started out as a tyre fitter, but spotted a bizarre arbitrage: scrapped British buses had valuable engines for Far East fishing fleets.

At 17, he was already exporting reconditioned vehicle parts to Asia, turning waste into wealth before most people opened a bank account.

In his own words..:

The big break

• Sykes bet big on UK Enterprise Zones — unloved industrial areas with government incentives.

• His crown jewel: Meadowhall, a mega-mall built on an abandoned steelworks in Sheffield.

• Transformed the site into a 350-shop retail magnet pulling in 30 million visitors annually.

• Sold it for £1.17 billion in 1999, pocketing around £280 million. Game over? Not even close.

The climb

Ploughed profits into commercial real estate and tech — founding and selling Planet Online for £125 million.

Used personal luxury as leverage — private jets, yachts, and £3M homes weren’t status symbols, they were commitments that forced him to keep growing.

He didn’t coast after success — he engineered financial discomfort to stay sharp.

Lessons for aspiring investors

• Start scrappy. You don’t need capital — you need clarity and hunger.

• Find value where others see junk. Sykes made millions from what others discarded.

• Use risk as a growth engine. He bought liabilities that forced him to grow.

• Play the long game. Build something that outlasts your bank balance.

• Be controversial, not conformist. His money followed his beliefs — regardless of applause.

Paul Sykes is proof you can start with nothing but a wrench and still end up owning a billion-pound empire.

He didn’t follow blueprints. He broke the mould, rebuilt it, then sold it back with a markup.

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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