A Quiet Shift Happening in the UK Property Market

Good morning,

In real terms, UK house prices are at their lowest level in more than 10 years.

Sounds wrong, right?

But adjust for inflation and the “crazy market” everyone talks about fades fast. Nationwide’s latest release caught a lot of people off guard. Myself too.

Which means something important:

You’re not buying a peak. You’re buying a reset.

Let’s dive in.

In this newsletter, you'll find...

• This Week’s Biggest News…….

• The Real Price Story Nobody's Talking About

• Property Listings

• Bottom Line

• What's Next?

• Feedback

This Week’s Biggest News…….

1. List of areas published by Rightmove that had the highest growth in 2025.

2. Zoopla’s latest report - shows a strong start to 2026.

The Real Price Story Nobody's Talking About

Look, I get it.

Every time you open Rightmove, that little voice whispers "you've missed it." House prices look insane. Your mates who bought in 2019 won't shut up about their paper gains.

And here you are, still renting, still scrolling, still wondering if you're late to the game. And asking yourself, when and how can I enter the market.

Spoiler: you're not late. You're actually early and the data tells a story that should get you genuinely excited.

The Real Price Story Nobody's Talking About

Here's what the headlines won't tell you: strip away inflation, and UK house prices have been the lowest it has been in over 10 years.

Nationwide's inflation-adjusted series shows real prices hovering in the same tight range since late 2023, even dipping slightly. That nominal number climbing on the news? That's just inflation doing its thing, not some runaway bubble.

Inflation is simply the price of everything rising and that includes property. So when house prices go up, the real question is:

is the property genuinely worth more, or is inflation just pushing the number higher?

Understanding that difference matters when you’re entering the market.

That’s why Nationwide’s latest data release is so useful as it helps separate real price growth from inflation noise, giving buyers clearer insight than ever before.

For you, sat on the sidelines with a 10-15 year horizon, this matters enormously. You're not buying at the peak. You're buying just after a reset – the exact position serious investors dream about.

Think of it like this: the market took a breather after the 2020-22 madness, caught its breath, and now fundamentals are quietly aligning for the next leg up.

Official figures back this up. The UK House Price Index shows average prices up 4.6% to roughly £268k in December 2024 – decent growth, but hardly parabolic. UK house prices are basically flat. This isn't a market losing its mind; it's a market finding its footing.

And that's your window.

The Supply Crisis Is Your Secret Weapon

While everyone's obsessing over mortgage rates, there's a bigger story unfolding that should make any investor smile: Britain simply cannot build enough homes.

The government promised 1.5 million new homes this Parliament. Savills' analysis? They're on track to miss by nearly half a million. That's a shortfall of 95,000 homes every single year against what's actually needed. Let that sink in, hundreds of thousands of homes that should exist by 2030 probably won't.

Growing population. Stricter planning. Nimbyism in full effect. When supply can't keep up with demand for a decade-plus, real prices don't fall – they climb.

Especially in the rental hotspots you're targeting: commuter towns, university cities, strong employment zones. This structural shortage is working for you, not against you.

The Rent vs Price Arbitrage

Now here's where it gets properly interesting. While real house prices have drifted sideways, rents absolutely have not.

UK rents jumped 6.2% in the 12 months to January 2024 – the highest rate since records began in 2016.

Do the maths: flat real prices, surging rents. Your gross yield is improving month by month. Your rental income is outpacing inflation. And suddenly, that property that looked marginal 18 months ago now actually stacks up – even with today's rates.

It's a Buyer's Market (Finally)

The Royal Institution of Chartered Surveyors is reporting something we haven't seen in years: softer buyer demand, actual negotiating room, and discounts from asking price becoming standard. Typical reductions are noticeably larger than a year ago.

Translation? You're not chasing. You're negotiating. You've got leverage. That's the environment where smart investors quietly build wealth – buying well, not buying desperate.

Rates Are Turning in Your Favour

After the brutal hiking cycle, the tide's finally shifted. Bank of England base rate is down to 3.75% from 4%, and lenders are responding. Nationwide and others are trimming standard mortgage rates. Cheaper trackers are here; cheaper fixes are coming. The same property now stress-tests at a lower rate than 12-18 months ago.

None of this makes it easy. You still need buffers, boring spreadsheets, a plan for voids. But for someone in their late twenties or thirties with a proper time horizon? The stars are aligning: flat real prices, rising rents, structural housing shortage, falling rates, buyer-friendly conditions.

Property Listing

Bottom Line

This is your moment – not because it's risk-free (it never is), but because the fundamentals are stacked in your favour in a way they haven't been for years.

The work you put in now – finding the right postcodes, negotiating hard, buying at a discount – is what Future You will quietly thank you for when everyone else is moaning about "how expensive everything's got again."

The plateau won't last forever. Get moving.

What’s Next?

To read: The government's on track to miss its housing target by half a million homes.

Your homework: Pick one postcode you've been watching and reply to this email – I'll personally review three submissions and share my thoughts in next week's issue.

Have a great week grinding those numbers,

The Data Capital.

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