Legacy Weekly Update (6th-12th September 2025)
Market & Prices
The UK housing market is experiencing significant fluctuations. Vistry Group reported a 55% drop in pre-tax profits in the first half of the year due to economic uncertainties and affordability challenges. The company completed 6,889 homes, a 12% decrease from the previous year, with revenues falling by 5% to £1.6bn. Despite a 3% rise in average prices for private sales, market conditions remain challenging, particularly for first-time buyers. Vistry's forward order book stands at £4.3bn, down from £5.1bn the previous year.
The share of Londoners purchasing properties outside the capital has reached its lowest level since 2013, with only 5.3% of house purchases outside London attributed to them in the first seven months of 2025. This decline is largely due to stalling house prices in London and a shift back to office working. Over the past five years, house prices outside London have risen by 26%, compared to an 8% increase within the capital. In prime central London, house prices fell by 3.2% in the year to August, while prime outer London saw a modest increase of 0.5%.
Mortgages & Finance
The Bank of England's recent interest rate cut from 4.25% to 4% has not significantly alleviated affordability issues, as further reductions are expected to occur at a slower pace due to persistent inflation. This continues to impact buyer demand and housebuilder profits, with Vistry implementing sales and marketing initiatives, including discounts, to stimulate demand.
The slow growth in London property prices has impacted homeowners' ability to build equity, which in turn affects their capacity to move to more expensive areas outside the capital. This financial constraint is influencing the choice of locations for those who do move, with more affordable areas like Dartford in Kent becoming popular.
Rental Market & Landlords
The NRLA highlights the importance of tenant income verification as a crucial component of tenant referencing. Goodlord has become the NRLA's exclusive tenant referencing partner, offering members exclusive rates. Landlords are encouraged to maintain properties proactively to protect their investments and ensure tenant satisfaction.
Policy & Legislation
The Renters' Rights Bill is progressing, with the NRLA urging the government to provide a clear implementation timeline to prevent confusion. The Decent Homes Standard, part of the Bill, also requires further clarity. Changes to EICR regulations, affecting the private rented sector, will be introduced in November, with increased penalties for non-compliance.
Planning & Development
Vistry Group has formed a joint venture with Homes England, backed by £150m of capital investment, to focus on social and affordable housing. This aligns with the government's pledge to build 1.5m homes over five years. Vistry has shifted towards pre-selling homes to housing associations and local authorities, reflecting a strategic focus on affordable housing.
Data & Research
Recent data indicates a reduction in rent increase rates in the private rented sector by about a third over the past year. However, the market remains fragile, with the risk of homelessness rising due to landlords selling properties. Research by Hamptons highlights that Londoners are now opting for more pragmatic moves, focusing on affordability rather than lifestyle-driven locations. The pandemic-driven trend of moving to coastal or rural areas has reversed, with homes in these areas taking longer to sell. Rightmove data from April indicates that London remains the most searched-for location, with a majority of residents preferring to stay.
Industry Moves & Corporate
Steve Reed MP has been appointed as the new Housing Secretary, a move welcomed by the NRLA. The association has also partnered with Hybr to enhance the future of renting through an online student and graduate lettings platform.
Other Noteworthy
The NRLA is advocating against proposed tax hikes on landlords, arguing that such measures will not aid tenants in purchasing homes. Additionally, the potential extension of the ECO4 energy grant scheme could provide landlords with more time to apply for energy efficiency funding. The shift in property purchasing trends suggests a reversal of the pandemic-driven "race for space," with fewer people seeking to leave cities for coastal or rural areas. This is evidenced by the increased time it takes to sell homes in coastal regions, rising from 52 to 73 days.
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