New landlord tax rules launched by HMRC

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This is Chubby Wallet. The newsletter that holds your hand while you navigate the property world..

Here's what’s in store..

• FCA proposes new mortgage rules

• 3 hottest sectors in UK real estate

• Planning reform passes 2nd reading: (what this means for you)

• Top 10 UK institutional investors and their strategies

• The grimy car park that turned into a £3.5b cashflow machine

The Financial Conduct Authority (FCA) has just signalled a shift in how mortgage rules will be applied, and the potential ripple effects could be significant for buyers, investors, and homeowners alike.

Specifically, it’s looking at stress-testing rules—the ones that ensure borrowers can afford their loans even if interest rates rise.

With rates now stabilizing and potentially declining, the FCA suggests that current rules might be too restrictive.

Translation?

Some would-be homeowners who were previously locked out of the market due to stringent affordability tests might soon find the gates opening.

This could increase homeownership opportunities in places like London where buyers and investors struggle with affordability (avg. £550k property at 4.8% rental yield)

However, there’s a fine balance to strike.

Looser lending standards could bring more risk into the system.

Remember the 2008 financial crisis? - It was partially triggered by irresponsible lending practices.

According to the Intermediary, consumer protection remains a top priority for the FCA, but only time will tell how these changes will play out in practice..

A push toward unregulated advice?

One of the more questionable proposals from the FCA involves making it easier for borrowers to bypass regulated mortgage advice. 

Currently, 90% of mortgages are arranged through brokers, and rightly so - buying a home is a complex financial decision, and professional guidance is necessary.

Our take

What does this mean for the market?

• More buyers entering the market? If affordability tests are loosened, demand for homes could rise, potentially driving up prices—especially in high-demand areas.

• Easier Remortgaging Homeowners: those looking to switch lenders may find the process simpler, allowing them to secure better deals as rates decline.

• Risk of Poor Decision-Making: If unregulated mortgage advice becomes more common, some buyers may end up with unsuitable loans, leading to future financial distress.

Mortgage and interest rate outlook

Latest Bank of England Decision (March 2025):

• Rates held at 4.5%—no immediate relief for borrowers.

• The BoE emphasized "gradual and careful" rate cuts, signaling no rush to slash borrowing costs.

What’s Next?

• One more cut likely in late 2025 (possibly August).

• Swap rates stable (~4%)—mortgage rates won’t drop significantly soon.

Why This Matters:

• For Homebuyers: Budget for current rates (4.5-6%)—don’t expect major drops.

• For BTL Investors: Debt costs will stay ~6% for now—focus on high-yield (8%+) deals.

• For Developers/Sellers: Demand remains, but affordability is tight—price competitively.

Opportunity:

• Lock in long-term fixed rates if you find a good deal—uncertainty remains.

• Refinance strategically—waiting for deeper cuts may not pay off.

Risk:

• Over-leveraged investors could struggle if rates stay high longer.

How to win in 2025

• Mortgages: expect stable but high rates—lock in good deals now.

• Investing: Focus on high-yield regions, avoid overpriced London.

• Regulation: Watch for easier mortgage rules—could boost demand (or risk).

• Tax & Policy: Prepare for potential Labour reforms.

Bottom Line

The market is still rewarding smart investors, but due diligence is critical. Stay informed, adapt fast, and focus on cash flow, not just capital growth.

Despite economic uncertainty, institutional investors are pouring capital into the UK’s ‘Living Sectors’—residential assets like build-to-rent (BTR), purpose-built student accommodation (PBSA), and senior living.

In 2024 alone, £10 billion was deployed into these sectors, accounting for 25% of all real estate acquisitions.

And the appetite for these assets isn’t slowing. Investors plan to pump in another £45 billion by 2029.

Why?

Because the numbers don’t lie—demand for quality rental housing is stronger than ever.

• There are 600,000 more renters than a decade ago.

• The UK has gained 580,000 new students, all needing accommodation.

• Nearly 1.8 million people have turned 65—and many are opting to rent in later life.

The result?

According to Knight Frank research, BTR rents have surged 25% in just five years, PBSA rents climbed 7.6% in 2024 alone, and the number of senior rental properties is set to increase by 150% over the next five years.

Our take

The sectors making the biggest waves

• Single Family Rentals (SFR) –  Institutional investors have poured £3.7 billion into SFR since 2023, and 71% plan to invest by 2029.

• Care Homes – The ‘silver economy’ is booming. With 39% of investors eyeing senior rental properties and supply lagging far behind demand, this sector is poised for rapid expansion.

• Student Housing - Universities are struggling to house the growing student population. With 65% of student accommodation stock built pre-2012, there’s massive potential for upgrading, repurposing, and fresh development.

Biggest Risks & Opportunities in 2025

• Stable interest rates mean better financing terms and stronger yields.

• Tech-driven and ESG-focused developments will command premium pricing. Institutional partnerships in co-living and senior housing could unlock new investment pathways. 

• Planning bottlenecks could delay new supply, keeping prices artificially high.

• A sudden shift in government housing policy or rent controls could impact profitability.

Final Takeaway

2025 won’t be a return to the property boom days, but it offers fertile ground for strategic investors.

Whether it’s rental housing, senior living, or student accommodation, the trends are clear: demand is outpacing supply, and investors are stepping up to fill the gap.

The key to success?

Stay ahead of shifting regulations, track interest rate movements, and invest in sectors where demand fundamentals are strongest.

The UK government has unveiled reforms to the planning system, aiming to accelerate housing delivery and stimulate economic growth. 

These changes promise 1.5 million new homes by 2029, with the Office for Budget Responsibility (OBR) projecting a £6.8bn GDP boost by 2030 as a direct result.

Here’s what you need to know:

Key planning reforms

• Streamlined planning process

  • The Planning and Infrastructure Bill (currently at second reading) seeks to devolve decision-making and reduce approval delays.

  • Amendments to the National Planning Policy Framework (NPPF) prioritize brownfield development and fast-tracked applications for high-density housing.

• £2bn Affordable Housing Fund

  • A new injection of capital into social and affordable housing, with further details expected in the June 11 Spending Review.

  • Likely expansion of Section 106 and affordable housing quotas, particularly in urban regeneration zones.

• Skills & Construction Investment

  • £600m allocated to address labour shortages in construction—critical for meeting ambitious build targets.

Risks & opportunities

Opportunities 

• Increased Tenant Pool – More housing supply could stabilize rental demand, particularly in undersupplied regions.

• Regeneration Hotspots – Focus on brownfield sites may drive up values in previously overlooked areas.

• Partnership Potential – Landlords with HMOs or multi-unit properties could benefit from local authority leasing schemes.

Risks

• Affordability Pressures – If interest rates remain elevated, buyer demand may not keep pace with new supply, leading to longer void periods.

• Regulatory Scrutiny – Faster planning approvals will likely come with stricter enforcement of EPC standards, licensing, and tenant protections.

• Construction Bottlenecks – Despite funding, skilled labour shortages could delay project completions.

Forward outlook

If successfully implemented, these reforms could rebalance the UK’s housing deficit—but their success hinges on mortgage accessibility, construction capacity, and local authority resourcing.

Landlords who proactively consult with planning experts to assess exposure to new planning rules. will thrive.

1. Legal & General - £3.0B+ deployed, 10,000+ homes. Cardiff, Bath, Manchester, Birmingham, etc.

2. M&G Real Estate - Active in Cambridge, London, Bristol. Eyeing Glasgow, Manchester.

3. Greystar - Dominant in London, expanding to Birmingham and Edinburgh.

4. Apache Capital - With Moda. Delivering BTR in Leeds, Glasgow, Birmingham, London.

5. PGIM Real Estate - Conservative capital. Focused on cities like Cardiff with stabilised yield.

6. APG - With Get Living. Community-focused, from London to Glasgow.

7. AXA Investment Managers - Targeting London, Bristol, Midlands growth zones.

8. Invesco US - Scale only. 300+ unit targets in key cities.

9. QuadReal Property Group - Canadian capital. Quietly tracking London, Manchester, tech corridors.

10. Barings - National footprint. Keen on major UK urban centres.

What these funds never want to see

• Strong local lettings agent - Irrelevant. They want scale.

• Planning in progress - Not interested. They want deliverables.

• Design-led boutique - Cute. But how will it stabilise?

• No ESG or Impact lens? You’re out.

• Under £20M GDV? Not exciting

These funds aren’t building. They’re backing operators who deliver.

From grimy car park to £3.2BN cashflow machine

In 2014, this was 85 acres of underutilized land.

Today?

The UK’s largest Build-to-Rent (BTR) ecosystem, a case study in how to transform real estate into a perpetual income engine.

Quintain didn’t follow trends. They set them.

Timeline of a game changer

• 2006: Acquired Wembley Stadium land—vision locked.

• 2014: Pivoted from build-to-sell to vertically integrated BTR.

• 2018: First 1,000 units leased—faster than forecast.

• 2021: Hit £1.5B valuation. Proved scalability.

• 2024: 3,390 units live, 6,044 in pipeline. Yield: 5.5%+.

The QUINTAIN playbook: 4 non-negotiables

1. BTR isn’t housing—It’s a financial product. Institutions don’t buy buildings. They buy cashflows. Engineered leases for 100% occupancy through cycles. ESG as a rent premium driver, not a checkbox

2. Amenities aren’t luxuries—They’re levers. Rooftop cinemas → 12% longer tenant stays. Co-working lounges → +£50/pm rent premiums. Pet spas → 28% lower turnover

3. Control the stack In-house construction → 20% cost savings. Own property management → 92% tenant satisfaction

4. Brand is your moat Wembley Park as a lifestyle, not an address.

Why this matters now

The UK needs 1M+ new rental homes by 2030. Traditional developers can’t deliver.

Quintain’s model proves:

• Institutional capital is flooding into BTR (40% of 2024 deals) 

• Operational scale beats one-off sales (5-7% yields vs. 3% REITs)

• The future is branded, tech-integrated living

The bottom line

This isn’t just about Wembley. It’s about the next 10 Wembleys.

The blueprint exists. The capital is ready.

The question is:

Who will execute it next?

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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