UK Property Market Outlook with Savills Head of Research

Let’s be honest, going into 2026 there’s been a lot of noise in property and not much clarity.

In today’s episode, I’m joined by Lucian Cook, Head of Residential Research at Savills and one of the most respected data voices in the UK housing market, for a clear-eyed conversation about where things actually stand as we move through 2026.

Lucian has spent his entire career in property, starting as a chartered surveyor before moving into research just ahead of the global financial crisis. Since then, he’s analysed every major shift the market has thrown at us, from the credit crunch to the pandemic boom, and now the biggest rental reform in a generation.

We talk about what’s structurally changed in the housing market, why regulation and tax policy have reshaped the role of the landlord, and how investors should really think about cycles, sentiment, and supply without getting pulled around by headlines.

This isn’t about predictions for the sake of it. It’s about understanding the forces at play, what the data is actually saying, and what that means if you’re making decisions with your own capital.

🎯 What You’ll Learn

• How the housing market has structurally shifted over the past two decades
• Why simplistic “property cycle” narratives can be misleading
• The few core indicators that really matter right now
• What rental reform could mean for supply and investor behaviour
• Where opportunity might sit for patient, long-term operators

If you’re trying to stay disciplined and informed in a market that feels noisy, this episode will help you step back and think more clearly.

💻 Resources & Mentions

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Transcript

[00:00:00] Andy Graham: Hey, I'm Andy, and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio, and what began as a short-term investment plan, soon became a long-term commitment to change the way young people live together. I've now built several successful businesses.

[00:00:20] Andy Graham: I've raised millions of pounds of investment, and I've managed thousands of tenants, join me and some very special guests to discover the tips, tricks, and hacks, the ups and the downs, the best practice. And everything else you need to know to start, scale and systemize your very own HMO portfolio now. Let's be honest, going into 2026, there has been a lot of noise in the property space and not much clarity.

[00:00:46] Andy Graham: So today I've brought someone on who lives in the data from one of the best regarded firms. In the industry to get their opinion on what we can expect from the property market over the coming years. Today, my guest is Lucian Cook, head of residential research at Savills. Today we're talking about house prices, about rents, about interest rates, about the rental market, about landlords and investors should be doing about the data that matters the most, and a whole lot more. strap yourself in. This is gonna be a very interesting episode. Let's get into it.

[00:01:17] Andy Graham: Hey guys, it's Andy here. We are gonna be getting back to the podcast in just a moment, but before we do, I wanna tell you very quickly about the HMO roadmap. Now, if you are serious about replacing your income, or perhaps you've already got the HMO portfolio that you want to scale up, then the HMO roadmap really is your one stop shop.

[00:01:33] Andy Graham: Inside the roadmap, you'll find a full 60 lesson course delivered by me teaching you how to find more deals, how to fund more deals, and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future.

[00:01:48] Andy Graham: We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets, and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from.

[00:02:04] Andy Graham: And we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co.uk now, and come and join our incredible community of HMO property investors.

[00:02:27] Andy Graham: Lucian, you've spent decades analyzing the property market at Savills, and you are one of the most quoted voices in the space. But today I'd like to get your very data led perspective. That could perhaps help investors like me and our listeners cut through all of this noise on what's really happening in the property market, what's coming next, and, and what we should all be doing about it.

[00:02:47] Andy Graham: So I suppose to begin with, you've been analyzing the UK housing market for a long time now. When you look back at when you first started Lucian, what are the biggest structural changes that you've seen in the market? 

Lucian Cook: Yeah, so I've sort of been in property all of my working life, and I've had two careers within the business. I was a practicing charter surveyor for 14 years, managing mixed portfolios with an element of residential, but I moved across to the research role in 2007, and of course, at that time the market was absolutely roaring. And a lot's changed since then. Those sort of very strange days in the middle of the credit crunch and the GFC were probably as disruptive as any of I've seen.

[00:03:26] I think it's probably that and the pandemic, possibly a little bit of Brexit have been the really sort of three big events when you don't really know what's coming next. Everything changes on a day-to-day basis. But I suppose the big things that have happened over that 18, 19 year period, it is now much more regulation generally.

[00:03:45] Lucian Cook:  Particularly in. The mortgage markets that has fed through to mean that in mature markets you've sort of got past a period where you can expect has price growth, that outpaces inflation. It's much more about working out where you are in the cycle to work out where you are gonna get your capital growth.

[00:04:07] Lucian Cook: I would say. Real changes in tax policy. So I would say in many ways tax policies, particularly around stamp duty, but also some elements of income tax have been slightly weaponized to achieve political ends. Whether that's been looking to. For want of a better phrase, and I'm not sure I quite agree with this level, the playing field between first time buyers and buy-to-let investors, I think in reality it's to put first time buyers at something of an advantage within that.

[00:04:36] Lucian Cook:  So that tax policy, particularly changing stamp duty use of stamp duty holidays to simulate the market when it was needed. Big surcharges on people buying additional homes. I suppose that classically has been another one of the big changes. So, and now of course we've got. 1st of May coming up, we've got a Renter's Rights Act going.

[00:04:55] Lucian Cook:  I started back in 1993. I was managing properties as we were really coming to terms with the implications the housing acts. 1988, we were seeing those old Rent Act tenancies drop off and get replaced by market rents. And what we're about to see now is probably the second big reform in that sector over the period of my working career.

[00:05:14] Lucian Cook:  So there's always plenty to get your teeth into. And one of the things you try and do is take all of that backdrop and you match it with all of the data that goes with it. And that's kind of the fun of the job. 

Andy Graham: Well, I mean, it's not a short answer, is it? Because. An awful lot has happened over the last, I mean, I've been doing this nearly two decades now and still very much feel like I'm learning, but it does feel particularly the last decade.

[00:05:37] Andy Graham: Every single year, there's just been something, and there've not been little things. There've been pretty substantial changes, real kind of structural changes in the way that we need to think as landlords and investors and of course I and our listeners, we are very much minded to be thinking about the decisions that we can make to make best use of our portfolios, maximize our rental income, improve our businesses, make our lives as easy as possible.

[00:06:00] Andy Graham: And you mentioned it then the data, obviously the data is what you are really interested in and making decisions, making assumptions, I suppose, guiding things based on that data. I mean, from your perspective, Lucian, and that perhaps with an investor's capital, what do you think are the most important metrics?

[00:06:17] Andy Graham: The three to five most important things that investors like me should be keeping an eye on, should be paying attention to, to kind of stay ahead of this curve. 

Lucian Cook: Yeah, well sometimes in the last decade it's been very, very difficult to do that. I think one of the changes that I've seen over my career is there's a lot more real time data, which is now available, and that probably puts you in a slightly easier position.

[00:06:40] Lucian Cook: We take a lot of stock by some lead indicators in the market. I'm a big fan of the RICS. Residential market survey, both from a sales and lettings perspective. It's a balance of opinion survey and it's very, very heavily sentiment driven, but it is very good at early picking up changes in sentiment within the markets, particularly in the sales market, in new, what happens to new buyer inquiries.

[00:07:05] Lucian Cook:  And I think in the rentals market, given that you've got this consistent picture of constraints on supply. How much there's been changes in tenant demand, and of course in the pandemic or in the wake of the pandemic, when we saw some wild fluctuations in market conditions. That was very important. But there's a whole range of indicators that we'll be looking at, and partly it's then about how you interpret those.

[00:07:28] Lucian Cook:  So I'm a big fan of looking at where we are in the cycle. And that is a, from an investment perspective, that is getting a handle on where's the capacity for house price growth over the period of the next five years. And you do that by virtue to what you've seen in the past five, where the affordability constraints are.

[00:07:46] Lucian Cook: So there's some great data, for example, in the regulated mortgage survey that helps you with that. Then I suppose given what's happened to prices and capital growth, working out where you are in the cycle, where does that leave you in where the yields sit and where you can get your improvement in yield, because of course in an era where you can't expect to see that capital appreciation, that more than matches inflation.

[00:08:12] Lucian Cook:  Unless it's gonna be in relatively short bursts, that means you're gonna be much, much more focused on your income yield. And so there's the data there. And I, I would say in that respect, where are we now? I think we are sort of very much midway, possibly a bit further than midway through the second half of a hazing market cycle.

[00:08:32] Lucian Cook: And that is where you end up with the lowest levels of capital price growth and still. Uh, less attractive yields generally in London and the Southeast. You've got more capacity for price growth and you've indeed, over the last five to 10 years, you've seen more price growth in the Midlands and the North.

[00:08:53] Lucian Cook:  Now, some of that's been led by Manchester because Manchester has just grown and developed its local economy, it feeding into the wider regional economy. But there is still that very much that cyclical piece. And then even within that, that one of the things about the housing market is that you can't just treat the Southeast as one.

[00:09:11] Lucian Cook: So if you look at where the strongest performance have been as late within the Southeast, then it's the Medway Tangs, and it's perhaps some of those. Slightly lower value markets that have remained a little bit more affordable, where you've still got a flow of demand, which is coming outside of London.

[00:09:29] Lucian Cook:  So that would also pick up places like South End for example, would also kind of come into that category. So that sort of stuff is really interesting. I also like to look out for, and this is where you get to get quite granular in the data. Those places that they don't necessarily conform to the cycle. And over the recent past, a classic example, I'd say recent past, probably the last 15 years, right?

[00:09:48] Lucian Cook: Bristol is a classic example of that. It's not really worked through the cycle. It's really developed its own momentum. It's changed a lot that Bristol Bath conation acts quite differently, for example, to the rest of the Southwest. And it's getting into the nuts and the bolts of the data around that. I think other things that we'll look at, we'll look at some of the other sort of metrics.

[00:10:08] Lucian Cook: Around where loan to value ratios are we've played at. Our understanding of the mortgage markets has grown massively. So what's the forward outlook for interest rates? How is that already translating into mortgage rates or the cost of fixed rate mortgages? I do quite a bit, for example, about a model around whether cost of buying or cost of renting is most favorable.

[00:10:31] Lucian Cook: A lot of people get that wrong. In terms of the way that interpret it. So there's a lot of stuff in there that sort of keeps us on our toes and gives us a lot of metrics just to try and help us work out where we are and what the prospects are going forward. 

Andy Graham: Well, like you said, there is so much data at hand now and and one of the interesting things about that is it's accessible to so many of us.

[00:10:49] Andy Graham: There are some of course reports and sets of data that you might need to be paid or a subscriber to be able to access. I get some of them, particularly from, for example, the student market. There are certain. Providers and authoritative figures, I suppose, in that space that collect a lot of data from accommodation providers in the student market space.

[00:11:06] Andy Graham: The purpose-built sector universities, which is very interesting, but also very niched. But you've raised some really, really unique points there. Lucian, and I wanna dive in, and this wasn't on my list today actually, but I wanna, I just wanna dive in a little bit further on this idea of the cycle. I don't think anyone listening today will be unfamiliar with the idea of a cycle or property market cycle.

[00:11:25] Andy Graham: I think what most people probably have in their head is this idea of an 18 year property cycle where their price is double because lots of gurus on Facebook and Instagram seem to shout about this an awful lot. Can you tell me what your interpretation of a market cycle is? Help us understand what you are actually talking about when you think about market cycles.

[00:11:44] Lucian Cook: Yeah, so I think there's two elements to a market cycle, right? There is one. The sort of underlying UK picture, are you in a period where there is capacity for strong growth? So typically what happens is you would have a downturn and would have a period after the downturn where the market corrects.

[00:12:03] Lucian Cook: Affordability improves, but people aren't confident enough to take advantage of that. As confidence builds because the economy grows, then you tend to go into a period of strong house price growth. What you then tend to find is affordability again, gets stretched, and that can be in any part of the market.

[00:12:22] Lucian Cook: It can mean that it's much more difficult, for example, from your buy-to-let investment to make all of the maths stack up, particularly where you're carrying debt in that environment. You get to that point and then the market has always had a tendency to go on a bit. Go on a bit further to that. And that's when you get to those affordability pinch points, and then normally something happens to restart the cycle again.

[00:12:45] Lucian Cook: You get a correction and off you go. So that's one part of it. I think our susceptibility to some of those cycles has probably been reduced because we have got. A more regulated approach to the availability of mortgage debt, so that if you like, acts as a break on the ability for the irrational exuberance that you get at the back end of a cycle just to continue to run on.

[00:13:11] Lucian Cook: Classically, that's what happened in the late 1980s. Markets just sort of ran on with some very strong highest price growth. People got carried away. It happened again in sort of 06, 07. Where you had another burst of house price growth, in theory, that shouldn't occur. And you had it in London, particularly in London in the Runup to about 2015, 2016 when we started to see the flip back to other areas.

[00:13:37] Lucian Cook: So you have that part. I don't think that is an 18 year cycle. I don't think you can pinpoint a time on it. I think circumstances, other circumstances will dictate how that works. That can easily be affected by one-off events. And my God, we've had enough of those over the recent past, very hard to predict.

[00:13:56] Lucian Cook: We call them black swan events. They make it phenomenally interesting to analyze a market, but they are almost impossible to predict, which is very frustrating when you look at the accuracy of our highest price forecast historically. So that's one part of the cycle. The other part of the cycle is very much geographical.

[00:14:13] Lucian Cook: And a piece of work that I first did probably 15 years ago was to try and separate the country into what I called leaders and laggers. And that was a market where you looked at the strength of performance of local markets and you saw those which performed very, very strongly in the first half of a housing market cycle and led.

[00:14:31] Lucian Cook: And then they sort of tended to lag in the second half of the housing market cycle. And then. You saw the picture move. Now you can do that quite easily on a regional basis by looking at the ratio between regional house prices in the UK average, right? If you just run that chart using the nationwide data that's available, that gives you an idea where you are in the regional part of the market, and generally what happens there is London and the Southeast kicks off because that's where you tend to get the economic impetus first for the market to kick on, you get the strongest growth there.

[00:15:01] Lucian Cook: You tend to find the Midlands, the North Scotland, and Wales get left behind in that period. Second half of the housing market, it flips and you've got more capacity left in the Midlands, the North Scotland and Wales. Scotland and Wales can be really quite late cycle markets in that respect. And then the thing flips around and it's that sort of, I think we're halfway through that second part if you like at the moment.

[00:15:25] Lucian Cook: And then you have the local variation within that, and that's the bit where you need some fine grain house price data. And we have some much better. Fine price data because we have an ONS index that goes down to a local level, but you need to be quite cautious how you use that. You need to avoid that sort of temptation to look at short term.

[00:15:44] Lucian Cook: Price movements where there might not be that many transactions and you get a lot of volatility and noise, you sort of need to look through that and go a bit more medium term in the way that you look at it. And I would say that's kind of one of my pets hates at the moment, is that people place too much stock on what's happened in the last month to rents and capital values, right?

[00:16:03] Lucian Cook: What happens? That precise reading depends very heavily on the robustness of the index that you are using. You need to look through that, and you need to be looking at three months on three months, or six months or 12 month movements. Otherwise your eye will get taken off the ball and you'll come up with the wrong conclusions. So there's lots, you know, lots in there. 

Andy Graham:  I mean, it certainly is the best justification for a cycle that I've ever been given. And I think in one soup, just kind of kiboshed the idea that this 18 year thing is a real thing. I think you said it yourself. Sentiment plays a big, big role in what tends to happen in the property market.

[00:16:39] Andy Graham: But I think looking back historically, it's quite easy, isn't it? To box things up and say, well, every 18 years things tend to double when in reality, actually that's not, certainly not what we appear to be seeing at the minute for lots and lots of reasons, and I've always urged sort of control and kind of pursuing that narrative too heavily because.

[00:16:57] Andy Graham: I think it is extremely speculative and I think a lot of what you've just said makes an awful lot of sense and, and I've always thought that as an investor myself, my job. Is to conduct the orchestra. I've got the instruments and the people that are in the orchestra and I can pick and choose how to use those instruments, and the data is certainly part of that instrument, but it doesn't give you a set of data, does not give you the whole picture, the real skill of being a good investor.

[00:17:28] Andy Graham: In the property market, and I firmly believe is being that local expert, being on the ground in your location and being able to take all of that information and look what's going on elsewhere, and combine that with what you are seeing and feeling on the ground locally, and pull those pieces together and make decisions based on that.

[00:17:45] Andy Graham: And I think that people often like to look around and look for an answer from somebody like yourself or somebody like me, but in reality, you still have to know on a micro level what's happening. Combine it with the macro data, don't you? 

Lucian Cook: Yeah, completely. And the way that we do a lot of our analysis is we start at a national level and generally at a national level, you look at things, how things have moved over time.

[00:18:07] Lucian Cook: That gives you a very broad picture of sort of the main dynamics of where the market is. You then go regional. Because that gives you a picture and there should be enough data there to get a robust regional picture. And then what you're doing is applying what you know regionally to a local market.

[00:18:24] Lucian Cook: There is much more data that's available at a local market, whether it's census data, whether perhaps it's the ability to get your hands on Experian data, whether you whether very lucky in that we have access to a lot of the data that is provided by the main listings portals. That's where you feather it in.

[00:18:42] Lucian Cook: But equally, you talked very recently about students, right? And we have seen a student market, whether it's purpose-built student accommodation, or whether it's the HMOs of that, which for a long time looked like you invested, you were guaranteed on the returns. You didn't need to be too selective to make the thing work.

[00:19:01] Lucian Cook: The market will probably bail you eggs. That's changed, right? That purpose-built student accommodation market. Mm-hmm. Or the HMO market for students has changed because a lot is changing in the education industry. And that's where you can make mistakes unless you get into the local data and you get much more forensic about where's supply, where's demand, and it's, it's supply and demand.

[00:19:23] Lucian Cook:  It's all supply and demand. Right. And what's likely to happen. And it's about spotting those fundamentally undersupplied or poorly supplied markets because those are always the markets to invest into. I would say so I think you've got start national, go regional, get local, and some of that local stuff is, I remember many, many years ago, back in the late 1980s when I did a level geography, my geography teacher said, geography is learned by the soles of your feet.

[00:19:52] Lucian Cook:  And there is a definite element in that around property investing, right. You've gotta walk it and see it to get the picture. 

Andy Graham: You really do. And I'll use the student market as another example. You could be looking at a property on one side of the street and it might work really, really well and it might perform really well.

[00:20:10] Andy Graham: And something on the other side of the street or a bit further down the road could have a completely different outcome. And it's understanding that, understanding why, and it's the experience that gives you that. And it's very difficult to explain why, but there are trends. And communities, types of people, the way that people like to live and also other things that are going on the top side of a road.

[00:20:30] Andy Graham: There might be some more sort of challenges on a local level that crime and and things like that. And actually it really does pay dividend to understand what's going on. There might be some local infrastructure projects, things that are happening, maybe extensions of campuses or maybe some new amenities that are being built nearby.

[00:20:46] Andy Graham: These sorts of things I think, can heavily influence our decisions and it's very interesting to see. 

Lucian Cook: Those are the bits that tell you whether you're gonna underperform or overperform the market. Right? And that's, again, you go national, you go regional, you go local. So you work out what the regional outlook is.

[00:21:00] Lucian Cook: And then you're saying, given all of this stuff I know locally, what does that tell me about whether or not I'm gonna under or, or overperform? And if you don't do that last bit, you're gonna get it wrong. 

Andy Graham: Precisely. The one way I've always tried to communicate this to the people that I work with and our listeners on the show, is that there's an element on the spreadsheet we're all familiar with putting an analysis together, looking at the numbers.

[00:21:20] Andy Graham: We're gonna buy it for X, we're gonna spend Y on, it's gonna be worth Zed, and we're gonna do all these things in the middle. But that lives on the spreadsheet. There's all of this stuff off the spreadsheet that you can't put into a field. You can't make automatically calculate a result. You have to be able to interpret it.

[00:21:36] Andy Graham: And I think that that's the real art of being, being a good investor. I mean, you've talked about a number of things already, Lucian, and I think this is a fascinating conversation. If we look ahead just 12 or 24 months. On the near horizon, let's say, what do you see as the main pressure points being? What are the things that we should be paying very particular attention to, either good or bad?

[00:21:57] Lucian Cook: Okay, so from my perspective, in terms of the outlook, you've got to watch inflation right now because what happens to inflation is going to tell you what happens to interest rates. And what we know at the moment is that the mortgage markets are very sophisticated. They are very quick to pricing changes on the outlook to interest rates.

[00:22:16] Lucian Cook: And fundamentally for a recovery in the housing market, which has been very, very slow to materialize since we saw that steep increase in interest rates. You need to have easing affordability. And that easing affordability brings more people into the market and it gives those who are in the market more buying power, right?

[00:22:34] Lucian Cook: And that's fundamentally what underpins house price growth. And that really doesn't matter whether you are an owner or occupier buyer or whether you are an investor, buyer. Those things, hopefully other things to watch around that mortgage regulation, I think at the moment is really interesting. So you have got a government with a very strong house building agenda.

[00:22:53] Lucian Cook: But not very much money and it's trying to get house building up when the market is weak. That's hard, right? Whatever they've done around planning reform, which is substantial, you can sort of understand why that's yet to bear fruit because you haven't had the economic conditions, right, to sit behind that.

[00:23:09] Lucian Cook: So what they've done is basically go to the FCA and say. Do you reckon you're a bit tight on mortgage regulation? Is there anything you can do on there just to loosen things a bit? It'll help us with our objectives to get first time buyers back into the market. Can you ease that back a bit or just have another look at that?

[00:23:25] Lucian Cook:  Essentially we've had one round where the SCA have changed their guidance on how lenders use mortgage regulation. That's opened up more capacity. So you've seen, for example, nationwide are offering more products at higher loan to income ratios at the moment, but you've also got a consultation on how they go further that will be conducted this year.

[00:23:44] Lucian Cook: So if that widens the pool of buyers and their buying powers on top of the interest rate cuts, then you can start to see that that provides a platform for house price growth. And then you've got to follow underlying levels of consumer sentiments because that's the bit, if you like, where you are looking at. Yes, the affordability's improved.

[00:24:05] Lucian Cook:  But people aren't confident enough to take advantage of it, right? So you are looking for that point in time. If you're really sort of it's now the right time to buy or not, or how long have I got, just look at where that sentiment is. Of course, one of the things that we would say, I've not really been into property investment personally in a big way, but I have always sort of time to my next house purchase very carefully.

[00:24:27] Lucian Cook: It is usually the case that you do best when you trade in a weak market. Rather than in a strong market because there's less competition because you are in at that period before you get the price growth. The issue is for most people, they don't have the confidence to do that unless they see others doing it.

[00:24:42] Lucian Cook: Because there is a competency and you've got to be pretty sort of, I'm gonna say long in the tooth, but you've got to be pretty experienced to sort of have that underlying nags to say, okay. They're holding off, but I think now is probably the right time to go in understanding that cycle. And then the other big thing, right, I would say is we've gotta watch quite closely how the Renter's Rights Act plays out in terms of landlord and tenant behavior.

[00:25:06] Lucian Cook: That's the other big one. So at the budget, we know we've got that coming. We also know there's gonna be an extra pm, a pound on income tax for private investors on their rental income. What does that mean? What do those two things combined mean for the structure of the industry? Everything tells us it should become.

[00:25:22] Lucian Cook:  More undersupplied, and I use that phrase 'cause it is fundamentally an undersupplied market, right? That's one of the reasons why the institutions love a bit of built to rent. It's undersupplied. But I think you are gonna see a number of other landlords, they're hitting those later retirement years. It's not really making the, the money that they wanted.

[00:25:38] Lucian Cook: They've done pretty well outta capital growth prospects since they first invested, and some of 'em are just gonna go, now is the time to cash in. So I think you will see a bit more stock come to the markets. I think that will offer up opportunities for the slightly more committed, probably larger, wealthier landlords to be able to step into the shoes of some of those.

[00:25:56] Lucian Cook: But at the moment, some of that's theory, right? We've gotta see how that plays out. And the market can do all sorts of wonderful, quirky things in between. So I think those are probably the things that I'm gonna be looking for. 

Andy Graham: And what would have to happen? What decisions, what changes would have to be made for us to suddenly accelerate?

[00:26:15] Andy Graham: I suppose the house price growth maybe yields for things to start looking substantially better from the perspective of an investor. Anyone buying and trading in real estate? 

Lucian Cook: I kind of guess it depends on what you want to look for, right? So if you want to have growth in rents. Let's just say you've purchased, so you've got the dead weight costs of your investment that are already in.

[00:26:36] Lucian Cook: You've set your base value. You're probably, in some cases, looking at the return on purchase cost as much as you are on current day capital value. Then you wanna get some rental growth out. To get that rental growth, you need an improvement. I would say you generally need an improvement in economic conditions, right?

[00:26:52] Lucian Cook: And this economic recovery is being relatively slow. That's aligned with reachable wage growth. Just gives people a bit more capacity to drive that rental growth as you go forward. And I would say from there. Again, if you've already purchased, then it is about some of the prospects for capital growth. I mean, you can't eat off the table of capital growth unless you realize it, right?

[00:27:12] Lucian Cook: It's something that you tend to take advantage of at the point of exit or where you might want to expand your portfolio and you can say, look, I've got this much equity in it to your lender, but this much equity therefore on de-risk. But for I'm a good bet then I'm gonna crack in. That is more about. The fundamentals that we've already talked about, actually, it's about interest rates.

[00:27:31] Lucian Cook: It's about the way mortgage regulation is applied and it's possibly also a little bit more, you know, that tax policy piece I think also comes in for investors. So put a deregulation, lower cost of debt, then you start to get the capital income growth. But from a rental perspective, it's gonna be about.

[00:27:46] Lucian Cook: Where does the economy sit? It's gonna be about some of the fundamentals, for example, in the student sector as to whether or not you pick the right location. What's happening around admissions, competing supply in all of those markets? 

Andy Graham: On the point of deregulation, I understand your reference to, for example, the FCA, just loosening maybe some of the lending criteria that banks were allowed to play around with, but what about the prospects of substantial deregulation that perhaps maybe a different government would bring in?

[00:28:14] Andy Graham: Do you think that that is just perhaps a pipe dream for investors? Do you think any of the changes, because we talked about this on another show together recently, and it was quite clear that there were some strong opinions that some of the changes that are being brought in by the Renters Rights Act will have quite.

[00:28:27] Andy Graham: Debilitating sort of outcomes and whether or not they're unintentional will leave for somebody else to answer, but certainly don't appear in theory at least to actually help the end user, which is the tenant here. And if these changes continue to maybe. Compress the problem of undersupply, what point does somebody have to kind of say, look, this hasn't worked.

[00:28:49] Andy Graham: We would have to do something quite different. Is the idea of rolling back any of this legislation a complete pipe dream, or do you think that we could end up in a position where some of the changes that have been made will force somebody a new government into those very difficult decisions? 

Lucian Cook: Well, I think that one of the important points you've just made there is a new government because the first thing that we know is that some of the changes around the Renters Rights Act have got quite a lot of political ideology behind them, and you could see that in a way that it went through all of the discussions and the Houses of Parliament and has no practically no changes.

[00:29:22] Lucian Cook: This was about getting it through to give tenants more security of tenure. You look at some of the specifics in there about things like rent review, about the ability to use some of the notices or the length of period of those notices. And then if, for example, you want to sell it, you can't sell it, and then you've got that limited.

[00:29:40] Lucian Cook: Period where you can't bring it back to the rental market. There is an element in there that I think is gonna be difficult. I think over the course of the remainder of parliament, this parliament, under this government, you can only expect nuanced change, right? There's one area that's an example where they've left the door open, and that is around the rent review process, right?

[00:29:58] Lucian Cook: So. You serve your notice to get your rent review. The tenant works out that the increase only comes in when the tribunal's made its decision. We're all concerned about whether or not there's any capacity in the tribunal system to hear this, so there could be quite a substantial delay there. And their tenants work the same, so they just challenge right.

[00:30:17] Lucian Cook: Because they know they can delay their rental increase for X months, whatever that figure X might be. At least they, the current government has looked at that and said, oh yes, that is a bit of a risk. So we will review that. It'll be interesting to see whether they review it in other perspectives. I think prospects have changed from other governments.

[00:30:32] Lucian Cook: Let's not forget that the Rentals Rights Act really is a reincarnation of the renters reform bill. That was under the previous government. Now, how much of that was really driven by the ideology of Michael Gove when he was, um, secretary of State and how much that would be adopted by either the conservatives or, or say reform or whoever else going forward is.

[00:30:54] Lucian Cook: A bit more interesting, I suppose, going forward. But again, I think there was an imperative for change, and that imperative was change is you got more people in the rental market, they're more diverse and often they're in different life stages than they would've been back in the 1990s, right? So you've got a lot more families with children, and I think that sits behind a lot of the change.

[00:31:13] Lucian Cook:  So I don't think you'll see wholesale change in that respect. Equally, I don't think you'll see things tighten substantially from here. Under the existing government for there to be a change of government, you could see some of the changes to some of the stuff that actually has those unintended consequences.

[00:31:28] Lucian Cook: I think you could see that. I don't think, however, you'll see the return of the Assure Shorthold tenancy agreement anytime soon. Mm-hmm. I personally, I would be quite surprised around that some of this, of course, goes hand in hand with the underlying political desire from all parties to get more people into home ownership.

[00:31:49] Lucian Cook: Fundamentally, this is where a lot of this comes from because they see that when you get people into home ownership, that in theory gives 'em financial security and that financial and security is a good thing for the wider economy generally. And a lot of the measures that you're seeing around deregulation at the moment are to try and improve numbers of first time buyers.

[00:32:10] Lucian Cook: If that works, then there is, uh, less of a need to road back on some of the stuff that you've had in the renters rights acts. If it doesn't work, then the problems that have been widely discussed are going to become apparent more quickly. Mm-hmm. So I think you're gonna have to look at, and it's not just about the politics of private renting, this is also intertwined with what happens to first time buyer numbers and owner occupation.

[00:32:36] Lucian Cook: Whether some of the other things that the current government has put in place last, but every political party, whatever the color would like to see people get on the hazing ladder. 

Andy Graham: And actually I don't think anybody, certainly that I know has a different viewpoint on that, on that either. I guess the big question is can it be done and can it be done without hitting these house building targets?

[00:32:55] Andy Graham: I mean, what, well, what is your opinion on this solution? The notion that they can build three, 2000 homes a year. Doesn't look like it's plausible, even from the perspective of being able to put materials on the ground, let alone actually get sites through planning and get contractors and home builders to be able to stick their necks out far enough to build that many homes.

[00:33:14] Andy Graham: I mean, was this a vote spinning exercise? What's Savills opinion? What's your opinion on this? 

Lucian Cook: Yeah, so I mean, I would say generally 1.5 million homes over the course of the first term was bold. It was pretty brave to have that as one of, was it one of your six key pledges? It was something like that, and comments like judges at the end of the first term on our results in this area.

[00:33:37] Lucian Cook: That was bold, possibly naive, right? Because turning the house building industry round and increasing house building is like turning a battleship. Right. You've got to make the changes in the planning system, and I think a lot of the changes in the planning system are good, right? They're like a jigsaw.

[00:33:52] Lucian Cook: You've done the bits around the edge that you need to do to complete the jigsaw, but it takes a long, long, long time to fill it in the middle, particularly when you've got some of the practical constraints. Where do the bricks come from? Where does the labor come from? How often, even when you make the big changes in planning that starts at a national level, how long does it take to feed through to a local level?

[00:34:14] Lucian Cook: That takes time, that creates friction in the system? So for a lot of people at the moment, particularly the larger developers. They know that their chances of getting a can center up, but they also know there's gonna be a resistance at a local level, and therefore they're probably going to have to go to appeal to do it.

[00:34:28] Lucian Cook:And that means there's still risk in the system, and that means that it is still more difficult for the small and medium sized house builders. So all of that makes it difficult. And house building last year went down, right? In England it was about 210,000. I think we ended up the era at and it, again, if you haven't got the economy with you and you're not bringing more developers into the market, that's gonna take quite a long time to tick back up the other side.

[00:34:52] Lucian Cook: Not least because you've gotta find the bricks. One of the favorite charts that I've done in the last two years, and it is sad. It's really sad to say you've got favorite charts. I acknowledge that my wife tells me on a regular basis that this is not a good thing, but I was literally jumping through hoops around the office when I got, um, UK brick deliveries going back to 1948.

[00:35:13] Lucian Cook: I mean, I managed to get that out to the ONS, and it tells you a story, right? It tells you a story that you need the materials, and we've depleted our ability to get the materials to do some of this thing. That means you put more pressure on the existing stock. That's fundamentally, and there's gonna continue to be pressures on that.

[00:35:29] Lucian Cook: We're gonna continue to have an undersupplied housing, an undersupplied housing, and I think that's probably gonna be exacerbated in the private rented sector. 

Andy Graham: So, I mean, what I'm gonna take, I'm gonna take everything that you've shared today and I'm gonna, with my investor cap on, I'm going gonna share my viewpoints on kinda how I feel as an investor right now.

[00:35:46] Andy Graham: I think this might be useful context for our listeners. You are talking about a mid cycle position, and at the minute inflation is. It's come down, but we're sort of, we're teetering, aren't we? Is it gonna come right down? Is it gonna go back up? It's not clear. So we're certainly not in in the safe zone yet, and I don't think anybody would wanna put money on exactly where we'll be in the next 6 to 12 months, but we're certainly in a better position than we were last year.

[00:36:09] Andy Graham: It sounds like under supply, fundamentally is an ongoing issue for the PRS, for the market. That isn't gonna change. There is no solution at hand right now to fix that problem. We've talked about macro micro viewpoints and the importance to interpret that sort of information. So let's assume that as an investor, I understand my micro market, I know where the good place is and the good homes to make it work.

[00:36:33] Andy Graham: I see this as being quite a good place in the market, actually, Lucian, because. Prices aren't running away. It's not that competitive to buy at the minute in the market. There's a lot of scope to do really great things with accommodation that is tired, that is old tenants clearly need this. It's the only way I think to can maybe soften some of the blow of the Renter's Rights Act when it comes in.

[00:36:54] Andy Graham: We need good relationships with our tenants. We want them to stay in our homes. We're gonna have to up our game a little bit. I see opportunities to do this, and I think. With that long term view you mentioned, I think you've gotta be long in the tooth at the minute. I do have a very long term view. I think short term, it's about buying good assets in good locations at sensible prices.

[00:37:14] Andy Graham: It's not about getting the very best return on paper, and it's certainly not about expecting to pull all of your capital out on the first refinance. It's probably the case that you're gonna be waiting a little bit longer to maybe see some of that capital appreciation. But I think right now. If you gave yourself a 5 to 10 year sort of timeline, I think that the market looks caveat being black swan events or maybe what Putin might do or something like that.

[00:37:37] Andy Graham: It looks like a pretty stable market, and that's a then I think we've seen in the last five or six years by a long, long way. I mean. Do you think that that's a fair assessment or am I being biased because I, I'm conscious I could be being biased as an investor. 

Lucian Cook: Yeah. I mean, I don't think you are wrong at all.

[00:37:51] And of course, you know, some of the trickiest market conditions you would've had, would've been in the immediate post pandemic boom, right? When you had a ridiculously competitive marketplace. And that was a very, there was always some sort of extraordinary behavior that was going on there where you could easily have got your fingers burnt very, very quickly.

[00:38:05] Lucian Cook: If you're buying at the peak of that market, you're not in that position at the moment. You aren't in a position where mortgage regulation is gonna be eased back. You are going to be in a position where the cost of mortgage debt is gonna fall, and you are in a position where house price growth last year was 0.6 of 1%.

[00:38:22] Lucian Cook: Right? So that again, tells you it's not a massively competitive marketplace, and the improvements in affordability that we've seen are yet to feed through into house price growth. If we've got all that right, then that tells you it's not a bad time to be investing. I suppose the one thing that you would hope for in doing that. And it goes back to your previous question about what might change from a political perspective.

[00:38:43] Lucian Cook: I think you could see some nuance change around things like the Rents Rights Act, but I think a new government coming in probably will be more likely to make a change around tax policy. Because it's easy to affect overnight. Mm-hmm. And it could provide a very direct stimulus, and that might be rowing back on the stamp duty surcharge, which is pretty mighty.

[00:39:02] Lucian Cook: Mm-hmm. Running at 5%. And it might be having a look at actually some of the restrictions on income tax relief. Admittedly, for private individuals, we know that. The bigger people are more likely to have it in a corporate structure, but that I think you possibly could see on a changing government. I think it's easier to work through.

[00:39:18] Lucian Cook: You could do that within a budget rather than having to push a big housing bill through Parliament. So yeah, that's gonna be an interesting perspective, I think. 

Andy Graham: Interesting. I've got a final question for you today, Lucian. In some senses, you've probably already answered this question. We've kind of touched very briefly on the idea of institutional investors, the build to rent sector.

[00:39:36] Andy Graham: With the backdrop of the Renters Rights Act, the general sort of direction of travel in terms of legislation regulation, the public opinion on landlords, it does seem to me that institutional investors are now looking better placed to kind of, than even smaller landlords in this game. Do you think that that is a fair assessment and do you think that that means that?

[00:39:57] Andy Graham: The small investors or even private investors themselves need to think quite differently about how they build, how they run, how they operate, or their kind of real estate businesses. 

Lucian Cook: Yeah, there's certainly gonna be disruption from that. What I think I would say is the underlying appetite for that build to rent investment remains strong because I think the whole idea of buying going into an undersupplied market where you have set up the platforms to get over the issues around the granularity of the asset, which is the thing that we were always told, held them back is good.

[00:40:29] Lucian Cook:  The issue that build to rent have at the moment is that the returns come out. Don't sit that comfortably against guilt yields. You're getting such a strong return on guilt yields, then actually, are you gonna get the compensation that you need in terms of offsetting all of your developments and operational risks?

[00:40:45] Lucian Cook: Within that market by going in right now. So we've seen quite a lot of build-to-rent development that was started X years ago, hit the market in the recent years, but we haven't seen that much start on site. I think that comes back first in what was referred to as single family. So that is suburban housing for slightly more midlife renters.

[00:41:08] Lucian Cook: When I say midlife, I mean sort of young families rather than graduates or younger households. I think it starts there. It fits much better With the house builder model, it's so it's easier for them to deliver. The demand is probably a bit securer. You're not necessarily outlaying capital in quite such big chunks, and you haven't got the same issues as development viability in those markets because you haven't seen quite the same ramp up in terms of building regs.

[00:41:31] Lucian Cook: Right? So that I think is where it starts. It comes to the multifamily, which is the big blocks of flats. Later down the line that said, what are the lessons that we can learn from Build to Rent? One is that there is a real desire and a strong pool of tenant demand for a well serviced offering behind a brand where they know the boiler's gonna get repaired very, very quickly.

[00:41:54] Lucian Cook: Right? Where they know that the processing of their tenancy deposit is going to be absolutely immaculate, where they know that they can. Call on hand and get a repair done to the property very quickly. And if you look at the way that that's manifested itself is we've talked a lot about local markets that you invest in as a private investor to an extent.

[00:42:14] Lucian Cook: Build to rent have less of a concern about that because their product offering is different. They will pool rental demand from a much wider area. Than the small private investor with individual assets because their offering is differentiated in that respect. And it will be a challenge for some private investors as to how to respond to that, particularly if there's a big build to rent scheme on their doorstep.

[00:42:38] Lucian Cook: And perhaps that's another bit. Let's go full circle, perhaps. That's again, where my geography teacher comes in, go around, look at it, and understand whether there's gonna be that competing supply in your local market. 

Andy Graham: I just bought a site that we subsequently got planning on and it was just a couple of doors down from a kind of development done by Capital Centric who are a superb developer doing exactly what you've just said, branded living with some communal features.

[00:43:05] Andy Graham: And reinvigorating some of the sort of tired residential landscapes. And, uh, I looked at that as a fantastic scheme that has actually reactivated an area that historically probably not been the first choice. In all honesty, probably wasn't gonna command the values it needed someone like them to come in.

[00:43:23] Andy Graham: Set the precedent, proof of concept, and then the door is open. And I think there's some really interesting opportunities like that happening around as well. Which again, you need to be on the ground stomping the streets to actually see and feel what's going on. Lucian, this has been a really fascinating conversation.

[00:43:37] Andy Graham: I, I could keep going, but I won't. I wanna say thank you. I really appreciate you coming on today. 

Lucian Cook: It's been my pleasure. 

Andy Graham: Yeah, it's been great to get your take on the numbers. And what you think is actually going on, what landlords and investors like us should be doing, what we should be paying attention to in 2026.

[00:43:51] Andy Graham: Before I go though, Lucian, for anybody listening today for anyone who wants to follow your work, maybe read more about your thoughts, your opinions, where can they best keep up with your musings and anything that you've got to share. 

Lucian Cook: Yeah, so I abandoned X some while ago. For reasons I don't think any of us really need to go into.

[00:44:10] Lucian Cook: So from a social media perspective, I'm much more active on LinkedIn and if I tend to find something that interesting or excites me that you'll find the odd graphs. So if you like the graphs, then you'll get some stuff outta LinkedIn and generally all of our big publications I will post on there so you can see what we're thinking.

[00:44:27] Lucian Cook: And alternatively, you can get onto the Savills website. You need to go to insights and opinion and into the research section and then focus on the residential stuff there. So it's a bit of a journey to get to it, but hopefully it's a rewarding, it's rewarding when you get there. So that's where most of it is.

[00:44:44] Lucian Cook: But often I'll pop up on podcasts and, and webinars, and I probably present to people. Probably about a hundred times a year. So that's up on my feet talking at at various conferences. So I did the, I say AEW, so Charter Institute of Accountants in Wales, residential investment seminar just before Christmas.

[00:45:04] Lucian Cook: So you might see me popping up where I'm desperately trying to prove that I'm not a mild disappointment in person. 

Andy Graham: Well, I'm sure there's gonna be a lot of people finding their way to all of these different platforms and channel solution. Like I said, it's been an absolute pleasure. Thank you so much for coming on today.

[00:45:20] Lucian Cook: My pleasure.

[00:45:27] Andy Graham: That is it for today's episode. Guys. Thank you for tuning in. Big thank you to Lucian for coming on and sharing such a clear data led view of what's really happening in the market. Now, look, the market will, as Lucian has said, do what it will do, but it's very clear that the operators. Who stay disciplined, who stay informed, who execute properly, will succeed in 2026 and beyond.

[00:45:48] Andy Graham: So if you are investing in HMOs, if you do want to build your portfolio and business, can I ask you to do three very quick things? First and foremost, subscribe to the podcast. That way you won't miss any of the great episodes that I've got coming for you. Secondly, please leave a quick review. Let us know what you think of the show.

[00:46:05] Andy Graham: Is it helpful? Is it enjoyable? Are you finding it valuable? Leaving a review helps us more than you could possibly know. It gives us feedback, but also it helps us push the podcast out to more people and it continues to spread the message about all of the great work that you guys out there in our community are doing.

[00:46:21] Andy Graham: And finally, if you do wanna level things up, head over to thehmoroadmap.co.uk and go and take advantage of everything that we've got to offer. Inside the platform, it's an absolute game changer, and it'll cost you less than the price of a cup of coffee every single day, which when you're spending hundreds of thousands on properties, is an absolute no brainer.

[00:46:40] Andy Graham: That's it guys. Thanks again, and don't forget that I'll be right back here in the very same place next week, so please join me then. For another installment of the HMO Podcast.