Patrick Predicts Possible Property Positivity
Friday 30th January 2026
Good Golly Gosh!
What a busy start to the year
We are seeing a strong uptick in viewings from those who were waiting with bated breath for the horrors promised for property in ‘Wretched Rachel’s Budget debacle.
In the end it was a damp squib.
Now the coast is clear, buyers seem keen to get going.
However, they are also looking for bargains.
Not easy with supply still quite thin in Central London and owners reluctant to take a hit on top of the 10-20% drop they have already seen since 2022, caused directly by interest rate rises.
Here’s the Horrid History:
In the 1986 Building Societies, Act Maggie Thatcher (bless) opened up the mortgage market by allowing banks to lend to the public for buying property, something which until then had been the preserve of the Building Societies with strict loan to value criteria for the borrower.
As a result; since then, any Tom, Dick or Harriet has been able to get a mortgage with relative ease and on significant loan to value ratios.
The 1988 Housing Act gave landlords the right to regain possession of their properties, when they let them out. With this we saw the concept of the private rental sector take off. Buy to Let mortgages further fuelled property prices, particularly in London and The Southeast.
Then came the ‘interest only’ mortgage which, with ultra-low interest rates, meant people could borrow vast sums at a very low monthly cost.
Since the rate rises in 2022, the interest on a mortgage is about three times what it was five years ago and the lenders are now refusing to give interest only mortgages to most - making borrowers pay back part of the loan capital each month - in the old-fashioned way!
The net effect is monthly payments are between four to five times what they were.
In 2015 George Osborne withdrew the CGT exemption from Non-Resident owners of UK property, which was unique in a Western democracy. The appetite from foreign buyers has withered away since.
PB’s Predictions:
I do not see banks allowing interest only mortgages again for some considerable time, and I really don’t see any Chancellor ever re-instating the CGT exemption which was such a distorting draw for foreign capital into UK property.
So, with both these structural changes, I am of the firm view we will not see a return to the doubling of property values every decade, as we saw in London from Thatcher’s era to 2015.
I do think most property in London, if correctly priced to reflect the 10-20% drop in values since 2022, have reached the bottom of the curve.
We can now expect a more ‘home spun’ market. I use the words carefully because I think we all, as a nation, must think of property less as investment and more simply as somewhere to live.
If this is the way we are to be, we can expect values to track inflation. Roughly!
Until next time.
PB
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