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

• Why the leasehold system won’t die anytime soon

Stock is piling up. Prices are barely moving. Yet builders can't make money in half the country.

Welcome to the paradox of Britain's 2025 housing market.

The Inventory Problem

Chris Watkin's Week 38 data shows 35,300 new listings hit the market in late September. We're sitting at 10.5% more stock than the 9-year average and 736,333 homes on the market as of September 1st.

This isn't panic selling—it's reluctant selling meeting cautious buying. Price reductions hit 25,000 properties in Week 37, with 13.1% of all stock reduced this year versus a 5-year average of 10.7%.

That's 22% more reductions than normal. Sellers need to move. Buyers have all the time in the world.

The Price Reality

Nationwide says house prices rose 0.5% in September (2.2% annually). Sounds healthy until you strip out inflation.

Nationwide's data shows the average UK home is worth £272,819 in purchasing power—that's 10.6% below the 20-year average of £305,204. Houses got cheaper even though the number went up.

For investors, this is a chance to buy low and benefit as prices recover. Adam Lawrence (Propenomix) expects roughly 50% capital growth over the next decade when you factor in that catch-up plus normal inflation.

But regional performance varies. Northern Ireland sees strong annual growth at 9.6%. The North, Yorkshire, and North West are solid. London, the South East, and South West are frozen. Properties over £500,000? Buyer demand is down 4%. Over £1 million? Down 11%. 

Mortgages Aren't Getting Cheaper

Mortgage approvals are steady at 64,700 monthly (Bank of England). New mortgage rates are 4.26%, while five-year swap rates (rates banks use to price mortgages) have held at 3.79% for 18 months.

Rates likely won’t drop much; expect new deals around 5.8% with fees. The good news is the gap between new (4.26%) and existing (3.89%) rates is just 0.37%. 

In about a year, they may align, eliminating rate shock for those remortgaging and easing market pressure.

What This Means For You

If you're buying/investing:

• Sub-£500k in the North/Midlands: Sweet spot. Viability is decent, demand is steady

• £500k+ in the South: You have leverage. Expect 5-10% negotiation room, especially on properties with 90+ days on market.

• New builds: Builders are desperate. Taylor Wimpey's sales rate shows they need your purchase. Negotiate hard.

The Bottom Line

Sales are "okay" (64,700 mortgage approvals, 5.6% up on last year). Prices are "steady" (+2.2% annually). 

But sellers are frustrated, buyers are cautious, builders can't build profitably in half the country, and everyone's waiting for the government to either help or hurt them.

For the next 8 weeks: Watch, don't act (unless you have a genuine reason to move). The budget on October 30th will clarify tax implications and direction.

For Q1 2026: Execute. The stock clearance will accelerate once certainty returns. Have your plan ready.

Long-term (3-10 years): bullish. The supply-demand issue isn't fixable quickly. Real prices are 10.6% below historical averages. Patient capital wins.

4.5 million homeowners are trapped in escalating fees and short leases.

Reforms were promised. But the Reality?

Legal battles and delays.

The Problem

Leasehold = you "own" your home but pay ground rent to a freeholder, face escalating service charges with zero control, and risk forfeiture for debts over £350. Scotland banned it. England? Still debating.

The Leasehold and Freehold Reform Act 2024 (LAFRA) was supposed to fix this. Instead: judicial review from freeholders, implementation delays to 2026+, and a "two-tier market" emerging.

What's Changed

• No two-year wait for lease extensions

• Expanded Right to Manage

Still waiting:

• Ban on new leasehold flats

• Commonhold as default

• Service charge transparency

• Ground rent elimination

Housing Minister Matthew Pennycook defends the pace to avoid "rushed" flaws. Campaigners call it betrayal—Labour promised to end leasehold by 2029.

The Freeholders Fight Back

Freeholders launched a High Court challenge in January 2025, arguing LAFRA violates their ECHR rights by slashing income from marriage value (lease extension premiums) and ground rents.

Hearing ended July 18, 2025. No ruling yet. Could push reforms to 2026+.

The Service Charge Scandal

Opaque, unaffordable fees with freeholders appointing their own management firms—classic conflict of interest.

The numbers:

• Charges up 20-50% recently

• Cladding remediation adds £10k+ per flat

• Councils spent £31m incentivizing private landlords to house homeless families

July 2025 consultation (closed September 26) proposed standardized documents and mandatory agent qualifications. Critics: "too little, too late."

@SokarisJones notes charges, cladding costs, and "part-buy scandals" (pay 25% equity, owe 100% charges) target the poorest.

What to Do Now If you own leasehold:

• Lease extension costs may drop post-judicial review (2026+)

• If lease under 80 years, don't wait—marriage value skyrockets costs

• Document all service charge issues for future challenges

• Leasehold Advisory Service offers free advice

If you're buying:

• Avoid leasehold unless essential

• Check: ground rent escalation, 5-year service charge history, lease term, cladding status

• Don't assume commonhold available for existing stock by 2029

The Bottom Line

Freeholders are weaponizing human rights law. Government is moving cautiously. Leaseholders remain trapped.

 Key question: Can ECHR accommodate meaningful abolition, or does Labour need to confront that constraint directly?

For 4.5 million affected owners: don't wait for reforms. Extend leases now, challenge unfair charges, document everything. The system won't fix itself. It's designed not to.

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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