Why buyers are beating renters now

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

• Understanding bridging loans -1

• Update on renters right bill

• The refugee that flipped $200k into a $1b real estate empire

If the UK property market were a movie, we’d be right at the part where the plot twists — no crisis, no victory, but definitely momentum shifting…

Let’s unpack what’s really happening...

• Rental demand is cooling fast. For the first time in over a decade, there are more first-time buyers in London and Scotland than renters searching for homes…

According to Hamptons:

Why the drop?

Mortgage rates are doing what they're supposed to — making home ownership more affordable.

With just a 10% deposit, buyers are now often paying less per month to own than to rent…

That's flipping the script in a major way, especially in more affluent areas where tenant demand has halved.

Meanwhile, rental growth is slowing down..

The average rent on newly let homes rose just 1.5% over the past year, down from 5.1% in 2024.

Rents in London even slipped 0.5% year-on-year. If you’re a landlord banking on rent hikes to cover rising costs — it’s time to recalibrate.

Property listings and sales

According to Chris Watkin, property listings are up 8% vs. pre-pandemic, and price reductions are 32% higher than the 5-year average.

So sellers are blinking first...

Think about it: with 756,675 homes on the market heading into June — way above the ~600k norm of a seller’s market — it's no wonder prices aren’t rising...

We're floating in a "flat market" — healthy deal flow, but no fireworks.

The impact of a sluggish economy

Behind all this, the macro story looms. April was dubbed “Awful April” for a reason — GDP shrank 0.3%, and the employment picture darkened with payrolled jobs dropping 55k.

That matters because fewer secure jobs = fewer confident buyers.

And while the labour force participation is improving slightly (down to 21.3% inactivity, still above pre-COVID’s 20.2%), we’ve got a long way to go.

The good news is net sales are up 6% year-on-year and first-time buyer registrations in London hit 50.3% — a two-point rise.

If you’re building or selling in the North or Midlands, conditions are still relatively bullish, especially at lower price points.

A tale of two markets? Absolutely.

Government intervention

The recent Spending Review earmarks £950m for local authority housing, expands the Warm Homes Grant (up to £30k per home) and promises a Mortgage Guarantee Scheme in July to support low-deposit buyers.

These aren’t just press release fodder — they could genuinely move the dial.

What are the risks

• Further job losses in the private sector

• Uncertainty over the Renters’ Rights Bill

• Unrealistic housing targets (1.5 million homes promise)

• Flat GDP projections (Q2 estimates vary between +0.1% and -0.1%)

The opportunity

Let’s not miss the signal in the noise: this is a rich market for buyers, first-timers, and long-term investors.

Flat markets shake out the flippers and speculators.

They reward discipline, local knowledge, and patience.

If you’ve got dry powder, use it wisely. If you’re thinking of selling, be realistic — this isn’t 2021.

And if you’re renting — watch mortgage rates. The moment buying becomes cheaper for you, you owe it to yourself to explore that path.

Let’s leave it at this: the tide hasn’t turned — but it’s shifting.

Whether you’re swimming with it or against it might define your next decade in property.

Ever dreamed of buying a brilliant auction deal, but worried about the super-fast deadlines?

Meet your solution: bridging finance. This isn't your average mortgage; it's your secret weapon for speed and flexibility in the auction room.

What exactly is this "bridge"?

Simply put, a bridging loan is a short-term loan, usually for under 24 months, designed to "bridge" a financial gap.

Think of it like a temporary cash injection.

Auctions demand fast completion (often 28 days!), a speed traditional mortgages can't match, especially for properties needing work.

That's where your bridge comes in.

Interest can often be "rolled up" (added to the loan amount upfront), meaning no monthly payments. This keeps your cash flow healthy.

Quick case study

Picture Sarah. She secures a run-down terraced house at auction for £250,000.

It's a bargain, but unmortgageable and needs a full renovation. The auction demands a 28-day completion.

• Bank Says No: Her bank won't touch it due to its condition and the tight deadline.

• Bridging Says Yes! A bridging lender, however, looks at the potential value (£350,000 after renovation) and quickly approves a loan, say £175,000 (70% LTV of the purchase price).

Sarah uses her savings for the rest, closes the deal on time, renovates it, and then gets a standard mortgage to repay the bridge.

The "wild west" & what it means for you

Bridging finance is often called the "Wild West" because, unlike residential mortgages, it's largely unregulated for investment properties.

This means:

• Greater flexibility: Lenders can be more adaptable to unique properties and situations.

• Faster decisions: Less red tape means quicker approvals.

However, it also puts the onus on you to do your homework and choose wisely.

Understanding the game

Bridging loans use leverage e.g. using a small amount of your own money to control a larger asset.

You put down, say, 30%, but you control 100% of the property!

This can boost returns, but also amplify losses.

Your Loan-to-Value (LTV) ratio (loan amount / property value) shows your risk exposure.

A higher LTV means less of your own cash, but more risk if things go wrong.

The Renters' Rights Bill remains in limbo.

After sailing through the Commons, the 264-page legislation hit the Lords' committee stage in May 2025, generating nearly 300 amendments.

The government now faces a critical decision point.

Key timeline

• July 1-15, 2025: Lords Report Stage begins

• September-October 2025: Earliest possible Royal Assent (if amendments are voted in and the gov likes them)

• May-October 2026: Implementation date (12+ months notice required)

So, where are we now?

The committee Stage in the House of Lords wrapped up on May 15th, seeing almost 300 "probing amendments" debated.

These are polite suggestions, not firm demands.

The government is now reviewing these suggestions, though major points like abolishing fixed terms or Section 21 are likely set in stone.

Expect flexibility only around the edges…

The next big date

July 1st, - this is when the report stage kicks off in the Lords, lasting until July 15th.

The government's softened stance might emerge after this stage..

Here's the kicker: if the Lords vote in amendments the government dislikes, we enter the infamous "ping-pong" stage.

Imagine a tennis match where the Bill gets batted back and forth between the Lords and the Commons.

This bureaucratic ballet can sometimes drag on – remember the Rwanda Bill? That took five weeks!

Looking forward

With Parliament breaking for summer recess soon after (July 24th to September 1st), and then party conferences, don't expect Royal Assent (when it officially becomes law) until September or October at the very earliest.

The Housing Minister, Baroness Taylor, has assured us the sector will get "adequate notice."

What's adequate?

Suzanne Smith, a lawyer and landlord, suggests a good 12 months, not just six. 

So, if Royal Assent happens in October, we're likely looking at May 2026 at the earliest, or perhaps even October 2026, for these major shifts to fully impact your operations.

Navigating the landscape

While the Renters' Rights Bill plays its parliamentary 'ping-pong' match, remember the wider economic game!

Lending rates can react to policy uncertainty, and demographic shifts ensure the private rented sector remains absolutely vital.

Risks include:

• Ongoing uncertainty.

• Sheer volume of changes demanding swift adaptation.

• Getting your head around rewritten agreements, statutory notices, and potentially recoded software.

But every challenge presents an opportunity!

• Be proactive: Start familiarizing yourself with proposed changes now to refine your operations.

• Attract quality tenants: New provisions, like clear pet policies, could become a selling point.

• Refine your strategy: Review current processes to identify areas for efficiency and compliance.

The uncomfortable question

Is this reform or managed decline of private landlording?

The government is essentially converting entrepreneurial property investors into involuntary semi-public housing providers.

Smart landlords should prepare not just for compliance, but consider the possibility that traditional buy-to-let investment is becoming economically unviable for all but the most sophisticated operators.

In 1984, 14-year-old Manny Khoshbin arrived in the U.S. as a war refugee from Iran.

Within weeks, his family was homeless, living out of a beat-up car in California.

No money. No English. But one thing was clear: he was going to find a way out.

By 16, he was hustling snacks door-to-door

At 18, he lost his life savings in a scam gas station deal.

Most people would quit. Manny doubled down.

The Pivot

He got his real estate licence and became a broker.

He crushed it in the mortgage business—earning $290K at 22—but realized he was just making other people rich.

So in 1992, he started buying distressed properties.

His strategy: go where others won’t. Bank-owned. Undervalued. Creative financing. Maximum upside, minimum capital.

The big break

One deal alone made him $50 million. That wasn’t luck—it was contrarian thinking, bold negotiation, and obsession with value.

Manny built a $1B+ portfolio of over 2.5 million square feet—without outside investors.

Fueling growth with pressure

Manny didn’t just face pressure—he created it. He set insane goals and gave himself no backup plan.

Discipline, risk, and discomfort became tools.

Crashes? He bought through them. Critics? He outworked them.

Lessons from his approach

Failure is tuition. Learn. Move. Repeat.

Think differently. Where others see risk, look for hidden value.

Own it. Control your capital, control your destiny.

Manny shows that real estate success isn’t inherited—it’s engineered

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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