Supplement 16 Mar 25 - Unbiased

“I want the news delivered unbiased. I thought that was the whole point with journalism” ― Aaron McGruder, American writer.

We are just over two weeks away from the next Property Business Workshop on Tuesday 1st April - where the topic is Due Diligence. An entire DAY on due diligence, back after popular demand (and expanded on our last DD workshop from 2024, where we also covered 2 other major topics). Fresh content and ideas. We are covering - DD on business partners and suppliers; DD on deals; DD on lenders and borrowers; The health of companies and what you can (and can’t) rely on from companies house; liquidation, administration and receivership - DD on deals with limited time or information available; credit ratings and how they REALLY work; Financial promotions and the FCA; and a LIVE due diligence exercise on some individuals and companies using some online tools. Tickets are live and selling already at bit.ly/pbw6 - the EARLY BIRD tickets have a genuine 10%+ discount on face value and when they are gone, they are gone - they are selling well. It will be a great room. Hope to see you there.?

Welcome to the Supplement - the news has been around the US sneezing and everyone else potentially catching a cold - the legacy of Trump 1.0 was very much that when the stock market said “hang on mate” he did something different, and I don’t think a lot of the companies caught in the “tariff crossfire” are enjoying themselves, so I suspect we might hear a bit less about these tariffs. 200% on booze from EU countries……you threaten me, I threaten you 4 times harder is the message (regardless of who started it). As usual, don’t look at what’s actually said, look at the bigger picture - the problem has always been that tariffs are inflationary, and Trump thinks he can say stuff is black when it is white and vice versa - but the stock market won’t lie.?

This week’s deep dive takes a look at the Hometrack Rental Market index published last week and also a recent publication from NIESR (The National Institute for Economic and Social Research) called “Housing the Economy”. Another fairly damning paper on the “state of the union” in housing - the sort of thing informing the Government as to the way forward from a policy perspective.

Into the real time slot then - Chris Watkin and the Property Market Stats Show get another outing. We get to ask that question that we love to know the answer to - What is currently happening in the UK property market?

Week 9 of 2025 (remember we run 1 week behind, but it is as close to real time as we get!) - and we see the listings data continuing to revert back towards the mean after a white hot start in terms of numbers of listings. 2025 still remains the biggest start to the year for listings since 2016 if not before (Chris’ data only goes back to 2017!). It’s still 8% higher than the 2024 number - which was, other than this year, the highest year for listings in the sample, and 17.6% ahead of the pre-pandemic average. My main reasons - if you leave out beating the stamp duty deadline as a reason for listing this year (you were very hopeful if you listed in the retail market on 3rd Jan and expected to get a completion by 31st March, but some maybe tried it?) were those who waited during 2023 (and early ‘24) because the market was obviously not great , and also that there’s a larger desire to get out of the market from (soon to be ex-) landlords.?

It can’t be explained by there being more units/completions - or more repossessions - or anything else I could think of that I expected to be significant. Thanks to those who suggested alternative reasons - shoutout to Rod Turner who suggested people moving to cheaper locations due to changes in mortgage rates (which would show up in regional statistics if true) - he also suggested moving abroad plans (we know we lost 12.5k millionaires estimated in 2024, but how many non-millionaires? - again you could check the emigration figures when they are available) - also people who HAD delayed waiting for lower rates that never came - hard to measure - and flats being “unclogged” after EWS1 dramas for years and years. Some great points there so thanks Rod!

12% of stock continues to be reduced - compared to 2024’s average (a market of more stock than we’ve been used to, just as 2025 is shaping up) of 12.1%, although the 5-year average is 10.6% for reductions. More stock, more reductions (both in percentage and absolute terms).

The gross sales still sit between 2021 and 2022's although now on the lower end - 26.7k homes SSTC in week 9, 25% higher than pre-pandemic levels. 24.3% fell through, very near the 24.2% 7-year average. Net sales press on - 20.2k - and 177k so far in 2025 is 19% higher than the pre-pandemic 3-year average year-to-date.

As at 1st March there were 675,186 properties on the market in the UK. The most by a chunk - that number was 623,112 on 1/3/24 and 628,020 on 1/3/19. On 1/3/22 it was 399,915! 7.5% up on the previous high (2019). Feb’s final ￡/sqft figure was ￡340/ft, down ￡2/ft from January, supporting the “wobbly market” readings from Nationwide and Halifax. Very sideways stuff.?

I always like to give Chris a weekly shout out here because he’s more prolific than “just” this epic tome he releases weekly on the UK property market - he comes up with some great stats on a regular basis. Drop him a like, subscribe, and all the rest of it and some kind words for his content creation. If you are in the industry and want a ghost writer - that’s his core business - give him a shout. The article gets published on the Property Industry Eye website, and the video on his YouTube channel - @christopherwatkin

We sidestep from the real-time UK property market to the Macro segment, like a Knightmare contestant from 1990. We will take a look at GDP growth (we will have to look pretty hard), the RICS residential market report, and then some data releases from S&P Global including the KPMG/REC jobs report. We will round up with - guess what - the gilts and swaps data in a trying week.??

Growth. I’ll never tire of reminding us of the great soundbite - Growth, Growth, Growth. The thing is - this IS absolutely the drum that Labour need to bang. They’ve even shown some ability to navigate some issues correctly - it really does seem that they mean it. Anyone sensible knows they aren’t delivering it in Q1, or Q2 of 2025 - on the back of the budget that they knocked out in October. Stagflation central. The challenge to get Q3 singing will be a rising inflation number, dare I say for the millionth time - remember GDP growth, imperfect metric that it is, is quoted net of inflation. The Bank of England Q3 peak prediction is based around 3.7% inflation.?

Now - we had anaemic times under the last administration. From late 2022 we really struggled (can’t think why - any suggestions, let me know - yes, that is a joke). Ironically in Q1 and Q2 2024 Sunak/Hunt’s sensible policies had actually kicked in and the UK was growing quite nicely - but that soon got undone and disrupted by the change of Government. And it had taken time to get here, or to recover from the lettuce, of course.

Still - they had really huge inflation to contend with, and I said a few times - it was honestly an economic miracle that nominal GDP did keep pace with that roaring inflation. Really not easy. You might think it is - with prices going up that much, tax take goes up - but inflation punishes businesses and consumers in so many inefficient ways that wouldn’t automatically filter through in real time to GDP. Hence we had an economy with an underlying natural growth rate of say 1.75% (close enough) growing not at all because inflation was sapping it.?

We’ve ended up, on the back of all of that, with a number of issues - one being sickness benefits, as it goes - Labour MPs threatening mutiny but ignoring us heading towards ￡100bn a year for these. No-one is asking the tough questions on the left about why this has utterly exploded in the past few years - and Government is ultimately about tough conversations. Respect to SKS and Reeves if they can handle this one - it absolutely MUST be handled. Sunak had identified it, then called an election, if memory serves!

So - the expectation was 0.1% growth, I had predicted -0.1 to 0 as a much more realistic range - and indeed it came to pass that we hit -0.1%. My primary driver in my prediction was the outperformance in December, again expecting 0.1% growth but hitting 0.4% growth. The PMIs are not, in my view, a fabrication - and there’s no way the “jobs tax” isn’t hitting what’s already a difficult time. It’s difficult because the trust isn’t there yet in the Labour government.

The reality, however, is looking a little different to me. I have very few political conversations, but the ones that I do have I try to make meaningful. I do have a think tank that I speak with on a quarterly basis, that is close to the housing side of policy in Government. It’s a bit of a quarterly rant to be honest where I reel off all the mistakes that are being made, supported by the data. Temporary accommodation would be one example. This time round, I did say to the “other side”, that I did think Labour’s attempts at “populism-lite” were clever. That will include cuts to welfare (as discussed) and deporting criminals born in international jurisdictions. I’m skeptical but pleased to see these policies that will appeal in the centre to the working person.?

IF we get through the spring statement period - and we are about to go into a two-week-or-so period of announcements that “aren’t in the statement” but are being made around the statement so that it “isn’t a budget” - and have no tax rises (on a recent poll I ran on LinkedIn, 47% still believed more tax rises were coming this month) - and they are likely “there but not there” e.g. chipping ISA allowances (apparently being shelved for another day), or freezing thresholds just as the Tories did for 7 years - then we might see a more practical approach. April will come, jobs will be shed, but investment decisions will come around. If it is a one-off shock to business, business will adapt, because that is what it does. You can argue that if it has cost around 0.8% in GDP (a case could be made for 1%, fairly easily, if not more) - then that cost is around ￡8.7bn to the exchequer. This is close to the amount of headroom wiped out - estimated - that will be confirmed by the OBR in the leadup to the Spring Statement. The maths there - just for a minute - GDP around ￡2.85 tn. 0.8% growth - ￡22.8bn. Government “hold” (increase in tax take) - roughly - 38% - ￡8.664bn. So - raising ￡25bn (which is actually more like ￡16bn) on National Insurance has had a cost of something like 50% of it, by not growing the economy.?

This simply harks back to the old economic saying - there’s no such thing as a free lunch. This leaves Reeves with further problems though, as you might imagine. We are still behind the 8 ball and will be until we get this growth!?

So - how did the growth shape up? Services up 0.1%, continued resilience - about in line with the PMIs. Production and construction falling - once again in line with the PMIs - production dramatically (0.9%), construction less so (0.2%). Those were enough to move us from +0.1% to -0.1%. I have said it many times, but it is just depressing when we are splitting hairs between 0.1%s - and it is always better to be on the positive side than the negative, as this time round.

You could just view December and January together as a bit of an anomaly and poorly forecasted. Some (Rachel included) point to Trump being to blame because the spectre of tariffs meant a LOT of inventory building and imports in January, and imports come off GDP (indeed, the same has happened in the USA, where recession has been mentioned, although anaemic growth is much more likely, until the volatility stops - assuming it will).?

If there’s truth in that (and it is true, to be clear, but how much difference it really makes is the question), there will be a bounceback accordingly. At some point. The PMIs are around the 0% - 0.1% growth mark mainly, which is why December’s 0.4% number made very little logical sense, but a bit of smoothing (and why we look quarterly more than monthly, if you like) sees an expectation of another 0% in February - bearing in mind Manufacturing and Construction PMIs dipped again - as realistic. The sensible range looks like -0.1% to 0.1%, and if we do get another negative print for Feb we would see the quarter still be positive thanks to December. March’s figure will be the one that makes up the first quarter though, of course, and a good estimate here would be 0-0.1% for the quarter, which means March will need to be pretty good (compared to January, anyway!) NIESR still see growth at 0.3% in Q1 2025, which is far braver than I am willing to be; they say that’s in line with the PMIs but with the composite PMI at 50.6 in Jan and 50.5 in Feb, I can’t see where they are getting this bullish number from, to be honest. At the moment, I’d take 0.1% as a result for Q1.?

There are a limited number of other surprises in the GDP report - accommodation and food & beverage had a tough January; in other news, the Sun rises in the East and sets in the West! From a construction perspective, new work is still 6.1% down on 2022 numbers, and repairs and maintenance is up 17% since then.?

Can’t go on for any longer about no growth at all (or a small contraction!) - to the RICS Residential market survey. The headline is in line with the Watkin real time numbers - sales market activity softening ever so slightly. The suggestion would be, here, that the stamp duty bump is going to have less impact than other bumps in the recent past. That makes complete sense, because the difference it causes is not as stark - 2.5k extra tax on all houses above 250k not bought by a first time buyer. The first time buyer tax impact is higher - 7.5% extra on all first time buys above 425k.?

To some parts of the country that will sound outrageous - to some it will be not enough to buy a flat, of course. This disproportionate impact may not matter that much in London because so few new flats are being built anyway…….but that’s not the right attitude, let’s face it. Perhaps Rachel has some surprises up her sleeve to cheer the big housebuilders up when it comes to FTBs.

So - RICS don’t want to alarm anyone but - new buyer enquiries and agreed sales turn “mildly negative”; momentum appears to be moderating but prices still rising (less than inflation at the moment, you’d wager); and a further gentle softening in sales market activity is expected in the month ahead. Sounds like the effect of a fairly small clip in SDLT, to be honest - and not much more to say than that. However, this is one of the reasons why my prediction for house prices this year was quite moderate.

New buyer enquiries -14%, new sales agreed -13% on the indicators - near-term sales expectations -5% (these are quite large moves, about 15% on the indicators from Jan’s report). Over the next 12 months, outlook for sales is +32% - the least positive reading since the end of 2023, as it goes. Still plenty of new instructions - as we know from Chris’ numbers, so they are once again validated - and the Balance - the main figure watched from the report - is down to +11%. Price growth tapering off, as the glut of stock and the transactions pushed over the line by the stamp deadline have cooled ardours somewhat.?

Lettings wise - headline tenant demand is at -4%, which I’d agree with - the fourth negative month in a row. The longest stretch without a positive reading ever since the dataset was formed (2012). However - landlord instructions still fall with them at -22%, and +34% see higher rents as supply is still cratering faster than demand according to RICS. This will continue to be ignored at a policy level of course!

OK. S&P Global - a bit of room to explore some of their other reports. I’ll start with the REC report on jobs. “Starting salaries rise at the slowest pace in four years” - that will keep the rate setters at the Bank of England happy, somewhat. It is something they have been referring to for over 2 years now - the outsized moves upward in wages, when you think that the inflation target is 2%. A week doesn’t seem to go by these days without me reminding everyone that I don’t believe in the 2% target any more and believe that 3% is the new 2%.?

A modest increase in salaries, staff availability up, and vacancies falling further - but a softer decline in permanent placements and temporary billings - almost exactly how you’d expect the market to react to an economic shock such as the increase in employers’ national insurance announced back in October. It’s a “non-negative” writeup from the commentators, including the Group Chief Exec of KPMG - saying “businesses that are well-capitalised will be looking for signals to support future planning and growth, and with that will come confidence to invest and create jobs.” - one of the more positive pieces of commentary from any of the S&P PMI and related reports in the past 4 months.?

The S&P UK business outlook is less positive. That report leads with “UK firms expect to shrink workforces over the rest of 2025 amid gloomy outlook for profits and activity.”

It refers to plans from both services companies and manufacturing firms to shed staff over the course of 2025 - which was more in line with my expectations following the activity in the budget. Perhaps more worryingly, profit forecasts turned negative for the first time since October 2022 (that’s the allowance for October 2022 references met, once again, for today!). The final key finding in the report is that inflation expectations for both staff and non-staff expenses have accelerated (which again is not in line with the results from the REC report).?

Now - this data was collected in February, based on a survey of around 12,000 manufacturers and service providers. The future employment level sentiment was negative for the first time since June 2020. UK employment expectations were lower than anyone else surveyed - it’s the dozen largest/most developed economies in the world. In spite of the negatives, however, firms still expect activity to increase - just not very much! The +25% number for business activity compares to +18% in October 2022, which in itself was the lowest number since the Global Financial Crisis.

The commentary resonates - unfortunately - because it points to stagflation, which looks highly likely with increasing inflation. However, a really significant rise in unemployment does look unlikely - and whilst economists disagree, stagflation is normally characterised by high levels of unemployment that are persistent. I prefer to call this “treacle”, which I started referring to back in 2023 - because I think that’s a better analogy. Progress, forward, just about, but really very slowly.?

So - the best conclusion we can draw there is “mixed signals”, which arguably at least means that not all signals are negative. The overall feeling when looking over the past 4-5 months of miserable reports are that the worst has been absorbed, and therefore the next couple of months of releases of Government data (because there is a lag) will be fairly miserable, but post-April perhaps the services sector particularly will continue to show the resilience that it has done over the years that I’ve been producing the Supplement.

That leaves the gilts, and it was another up week unfortunately. 4.212% at the open ended the week at 4.287% on the 5y gilt yield, so up 7.5 basis points. Not a disaster, but another up week nonetheless. The big drift this week was really in the US markets, because - as referred to - after another messy week in the stock market as the US crossed the threshold of the stock market being 10% down on its most recent high (and Tesla has lost 50% of its value in just 3 months) - the bond yields went upward on the back of inflation data which was heralded as a victory for Trump supporters, rather than looking into the actual detail. The markets don’t get political - they are, instead, clinical - and a bond sell-off after a Monday rally had an impact in the UK as it often can do. Often the market would have trimmed the yields on the back of a negative growth surprise (as we had in Friday’s figures) - and I often say, when the market doesn’t do what you would have expected, you should take note. This is one of the most negative signs for the bond yields since early January when yields were charging upwards, and the short-sellers in the bond markets clearly still have plenty of confidence and money in the tank. Rates aren’t moving downwards anytime in the very near future - certainly not at this coming Bank of England meeting on Thursday this week.

Thursday’s 5y gilt close was actually pared back relatively near the end of the day to 4.235% and the swap at Thursday’s close remained at under 4% - 3.964% is very similar to last week’s reading, and also just about above 1 month ago and 1 year ago (which were both in the low 3.90s). We are well over a year now without too much significant movement in the swaps market, suggesting we’ve “found our level” at a 4% swap rate until something material changes in the economy.

The expectation for figures for 5 year limited company debt still needs to be at 6% for the foreseeable future, folks, I’m afraid!

OK - suit up for the deep dive! First up this week is the Hometrack rental market report released this month. The Hometrack data is trusted by the vast majority of top UK lenders, and is part of the wider Zoopla Property Group for those that don’t know. The notable headline figures - 3% annual rental inflation for new lets in the UK (exactly at the figure of inflation, and where my expectation is going forward for new lets - between 3% and wage inflation, basically). There are still 12 renters chasing every available home, and London’s figure is up 1.1% for the year on new lets (suggesting heads are butting against affordability ceilings).?

This 3% number is the lowest for 3.5 years, suggesting that the crack-up boom is over - in fairness, this has been the case for the best part of 6 months as far as Zoopla go, although their figures were closer to 4% when I last reported on them. One year ago that 3% was 7.4%. Interestingly, homes for rent are up 11%, and rental demand down 17% - so the balance has been redressed somewhat which is taking price pressures off.?

The 12 renters chasing a home is 42% down on 2022-2024 levels, but still higher than pre-pandemic. The Hometrack expectation is in line with mine - 3-4% rent increases during 2025. The 17% down year-on-year demand is still 79% above 2019, for full context. The supply is “only” down 22% since then - so that’s showing demand driving about three-quarters of the price growth - possibly thanks to outsized population increases in the interim.?

The report drills down regionally - every area of the UK has a higher stock of homes for rent than 12 months ago other than the West Midlands, which is down 10%. The North East and Scotland (areas with the highest yields) have supplied the most stock, which shouldn’t surprise anyone.?

Next is an interesting point - rents are rising faster in more affordable cities. This is congruent with the observation that affordability is the guv’nor in this market. Hull, Liverpool and Portsmouth are at the top end of the increases city-by-city compared to Nottingham, Leeds, Brighton and London at the bottom end of rent increases.

Areas adjacent to big cities are the ripest for continued rent increases, Hometrack concludes (and this looks a sensible conclusion). UK Ex-London is up 3.9%, such is the drag on the figures from the London market. Both the South-East and the East have seen more like 4% rent increases in the past 12 months.?

Always an insightful report and worth spending some airtime on. Moving on, then, to NIESR’s recent report entitled “Housing the Economy”. They kick off the intro to the report by describing a “troubling trinity” - rising homelessness, growing queues/high payment burdens in rental housing, and difficulties in entering homeownership.?

They point to multi-decade socio-economic changes but also failures in governance as chiefly to blame. “Governments fail to grasp how housing outcomes frustrate goals for stability (agreed), higher growth and productivity (makes sense), fairer distributions of wealth and residual incomes (agreed with an expanding PRS alongside a shrinking social system, if indeed that’s where we still are as at today - it is certainly where we have been for a couple of decades) - and progress towards net zero (I remain sceptical here - there’s no doubt in the UK that a large percentage of human emissions come from leaky houses, but the production of energy is the subject matter that would have and still would provide the most bang for buck when it comes to net zero).”

The need - NIESR tells us - is to make housing affordable and expand homeownership. The recent decade or so has been a slow move upwards after post-crisis repair, although affordability has been whacked by normalised interest rates and rents moving up above inflation, which is an unusual phenomenon that hasn’t occurred in the 15 year period before the pandemic (for any sustained period of time).?

The factors are listed as: high immigration rates (rarely mentioned because of its political status, but economically factual) - growing student numbers - and high down payments, stress tests and now higher mortgage rates. This appears to be another tip or precursor to the incoming regulation easing for mortgage rates which looks likely to occur in the coming weeks and months.?

Then - there’s a really classic reporting “naughty bit”. I couldn’t really think of a less reflective piece of analysis than this. “Between 1992 and 2022 average house prices rose by 377 per cent and median household disposable income only by 51 per cent.”

I need to spend a couple of minutes here. Where do I start! Well - 1992 was a year at or very near the bottom of the movement in house prices which - even if we just start in 1980 rather than tell the full story - saw house prices treble between 1980 and 1989 - with right to buy and massive credit expansions taking place to support right to buy and the broader market - and then saw house prices correct by 10% between 1989 and 1992. 1992 was pretty much the bottom - very convenient when seeking to make a point about a rising cycle since then.

Then - 2022 - the complete opposite. Before the lettuce, September 2022’s figures (which were settling as she settled - briefly - in 10 Downing street) were not again seen until August 2024, when inflation had done a serious amount of heavy lifting in that time (and, indeed, household incomes had moved on).?

So to make a point we are comparing a bottom to a top. Naughty. That doesn’t change the point being true - house prices have outstripped median household disposable income. Sure. The magnitude of it would change significantly if we chose different time periods - for example, 2004 to 2024. Other points would have to include the fact that between 2019-20 and 2022-23 the average household in the English housing survey went from 2.4 people to 2.2 people. This is a significant change of course (over 8%) and so that would dramatically impact household incomes. The EHS only goes back to 2008/9, and it is hard to find data on number of people per household in 1992 in the UK - the ONS estimates 2.48 persons per household in 1991. This isn’t a huge decline, but nonetheless it is something that makes a difference. If the household on average is smaller, it also needs/demands smaller accommodation - a point that needs to be made here for this to be a reasoned discussion.

The next point is that income and wealth have shifted against the three poorest deciles. In recent years, that point around income is unlikely to be accurate in the UK - with extreme rises in the minimum wage in percentage terms. If we use my 20-year range, as an example, rather than lament the giant credit expansionary events of the 1990s (including the advent of the buy-to-let mortgage) - I’ve shared a graph this week from the equally-respected IFS who show real median household disposable incomes in the past 20 years after deducting housing costs. It just proves the oldest point in the world - lies, damned lies, and statistics…..if the vast majority of the difference in the figures listed in the report is on the basis of what happened between 1992 and 2002 - then at least say so…….

NIESR presses on with reporting on the pie-in-the-sky 1.5 million homes numbers, but - unlike many other reports - do mention the numerous issues that there are in achieving this. They categorise the goal as not only unachievable but also too limited!

Remember thanks to the changes in the fiscal rules that borrowing to create assets is “allowed” - and so there is scope for more to be done almost independently of the cost of doing so (assuming wise investment). The numbers being thrown around - in the millions - are a tiny fraction of what would really be needed. Less than 1%, I’d estimate.?

There’s a very insightful paragraph that follows about the PRS. The first point is that extra regulation doesn’t necessarily deter investment. I think that needs to go a bit further - because what it misses out is that if the rewards are high enough, then the supply will go up, in spite of the regulations. It also misses the point about the pain of transition between a tiny, fractured market with many one to three property landlords - and how at that scale it will be so much more difficult to be in touch with all the necessary regulations. However - next up they address Build-to-rent and make the obvious point that this targets “middle and upper income rental demands” - not low income needs. Impossible to disagree. Then, a thumb in the eye for Scottish rent controls (nearly phased out now anyway) - simply saying that “poorly constructed measures have deterred investment”.?

There’s also criticism for the LHA freeze, the benefit cap being hit by inflation, the bedroom tax, and the two-child benefit cap. This isn’t the first time this critique has been levelled, and it won’t be the last. The critique is, in my view, factually accurate - but the cost/benefit analysis is not one that is shared widely (or, indeed, at all!).

There’s then a historically fairer summary. Homeownership rates rose until 2001. 71% of households. This moved to 65% by 2024 - the wrong direction, but not a disaster. It also fell significantly after the GFC and has been in “repair” mode and been going upward slightly in the past decade, which NIESR chose to omit.?

The next point they make is around not overstating the importance of planning regulations here. I am in agreement with that - planning reform is not the only answer. “The housing market has become increasingly driven by family wealth and less by income; and mortgage lending to the bottom half of the income distribution is shrinking”. A stark comment - but a fair one. However, we need to not have a return to the NINJAs of 2007, of course. Still, the challenge for Rachel Reeves (or more accurately the FCA) is to strike the right balance.

The suggestions are to look at longer-term fixed rate mortgages (a point that has been made for 20 years) and also if the Bank of England should put more focus on the productivity effects of sustained increases in housing prices.

Here’s where that problem in the 1992-2022 analysis versus my 2004 - 2024 analysis rears its head again. House prices haven’t moved up above RPI inflation in that time. That’s a 20 year period. So how much can we explain in anything, when we are just continually discussing a nominal price rise which isn’t responsible for that much.

For example - the price of a 3-bed semi doesn’t change drastically because fewer people stay married, or get married in the first place, or cohabit at all. We are talking apples and oranges here. NIESR’s suggestion is to “revert the nation’s most widespread speculation system back to the steady savings-low inflation housing system prevailing before April 1972”.

I really don’t know what to say here. Rarely is going back to the 70s the answer. Openly doing “whatever it takes” to reduce house prices would destroy consumer confidence, destroy wealth in two-thirds of UK households, and render anyone unelectable for an eon. Or, tell me where I’m wrong, please, in the comments or on the ‘Tube!

The next point is long and involved about Government departments collaborating to achieve outcomes. Definitely true, highly unlikely, would be the conclusion I think - until the Government can be run by AI that is wise enough to understand that when you move A and B it impacts Y and Z with, often, unintended consequences. Perhaps that utopia isn’t actually that far away……but it won’t stop politicians wanting to remain elected above all else, will it?

We reach the conclusion of the report, then, with five strands of further change that are critical in NIESR’s opinion:

• Stop fostering the rentier rather than the entrepreneurial economy. I’m not sure any landlords at this time really feel that the rentier economy is being fostered, but there we go. There is some merit deeper within this point, though - to change the view of homes to one that recognises that the housing situation shapes consumption and production patterns of people and places, and higher housing costs reduce investment in other forms of growth-inducing capital. A great framing of the problem without a solution, though - just a point of where and how to focus, it seems
• Speeding up planning won’t be sufficient - high rates are one issue (which as often discussed are “Not high” historically - but if you accept my characterisation of the last 20 years as the relevant 20 years, they ARE high and indeed on the high end of the range since 2003/4/5, even if you ignore the post-crash/ZIRP years); alongside shortages of labour, materials, and critical infrastructure. Accurate and damning. The need to incentivize to bring forward delivery of affordable homes (from the Letwin review) and also the fact that easier planning might just grow the stock of unused permissions.?
• Levelling-up has “disappeared”, but regional solutions are needed, not just local ones
• Housing tax reform needs to start - tax must be included in the review. It will be difficult and slow. Labour already pulled out of it in 2024 and ultimately the fear will be “community-charge” - poll tax - focused concerns, of course. How to upset everyone - mess with council tax. There is a claim that housing outcomes are towards the top of political agendas but this isn’t in line with the yougov weekly polls around people’s top political priorities - housing sits below health, the economy, immigration, just below crime, and well below defence at the moment (for obvious reasons). So - people definitely care but they are two to three times as likely to be concerned about the economy, immigration or health than they are about housing. Remember - this is politics
• The wider outcomes of housing need to be fed into a newer and more sophisticated model to make “big policy” in housing actually work in a meaningful way.?

All in all, an interesting and very big-picture report, but one that I have fairly significant concerns over the biases in the data used. Where we are going in all of this remains to be a significant question - but I don’t think NIESR have framed all the answers there.

Remember to book your tickets for the 1st April for the next Property Business Workshop too, on Due diligence - the most comprehensive day on DD that will ever have been delivered in the property space, I can guarantee it! Join those who have booked their Early Bird tickets here: bit.ly/pbw6?

Above all - please remember to Keep Calm, ALWAYS listen to or read the Supplement, and Carry On; there will be opportunities abound this year and towards 2030 - the risks around at this time, while they feel significant (the geopolitical ones) are far less meaningful to the UK housing market than they have been for several years - of that I have no doubt. Good luck!