Year-End Appraisal

• Bull is in the doghouse for his consistently over-optimistic market projections for total returns in 2025.

• His 10.5% forecast at the beginning of the year has proven to be way above the current IPF Consensus of 7.1%.

• Bull is happy to blame everyone (other than himself) for his over-exuberance and is stubbornly unrepentant.   

• Bear compares the state of the current market with the 1990s and predicts a grey outlook for the next 5 years. Neither good, nor bad. Just grey.

• Despite everything, the spread of their respective 5-year total return forecasts, at 8.00% to 10.50% is surprisingly close … and positive.

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Taxing Times

• With The Ashes seemingly over following Australia's dominant performance in Brisbane this week, Bull has already moved on to plotting England's routes to World Cup glories at the Football and Rugby World Cups in 2026 and 2027 respectively.

• Bear finally manages to drag Bull away from his new World Cup wallcharts and they continue their discussion from last Sunday about the Budget and, in particular, they focus on the likely impact on the housing sector.

• They feel that the Government missed the chance to properly support the sector and unlock much-needed development. Targeted support at the entry level could have made a big difference, particularly given that the OBR expect further falls in housing net additions through to 2027.

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Leaks, Glitches and a Sigh of Relief

• After months of anticipation, speculation, and leaks Bull & Bear are relieved that Budget day is finally behind us.

• The Chancellor has gone big on spending and even bigger on taxes, but she has at least doubled her fiscal headroom, prompting a sanguine response from the market.

• Bear is pretty miffed by Ms Reeves's new 'Mansion Tax' and is less than impressed that rates liabilities for larger commercial occupiers, including retailers, are set to sky-rocket after the imposition of a new 'super multiplier'. 

• However, Bull takes a more measured approach to dissecting the Budget, focusing instead on the big picture implications for the UK property sector.  If the Chancellor has indeed managed to calm the markets and pave the way for lower inflation, the Bank of England are increasingly likely to deliver a 0.25% cut in interest rates in December, with further cuts in 2026.

• That may be just the early Christmas present the UK property market needs!

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UK Healthcare - In Rude Health?

• Bear fears the Chancellor might come after pensioners in Wednesday's Budget, leading our protagonists to chew the fat on UK Healthcare Property. 

• The UK's ageing population and clear need for additional healthcare infrastructure is causing a wave of investment into the care sector, from a variety of sources.

• Bear is quick to highlight why this wave might cool off over the next few years - #1 being development unviability.

• The two agree that it falls on the Government's shoulders to create a more forgiving economic environment for development, but neither are optimistic Wednesday's Budget will provide the solution.

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The Power of One

• Whilst Bull is 100% convinced that the Bank of England will cut rates by 0.25% in December, Bear is particularly gloomy this week.

• Other than London, he is concerned that the ongoing bid-ask spread between buyers' and sellers' expectations is stifling activity.

• He fears that the banks' apparent 'pretend and extend' strategy on current valuations will ultimately backfire and he offers two unpalatable solutions:

• Slash capital valuations by another 10-15% to reignite enthusiasm; or

• Do nothing and endure the market drifting for the next 5 years.

• He would opt for the former ... and he thinks the market may well agree with him, sometime in 2026.

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Padeling in the Wharf

• Having spent a highly enjoyable Thursday afternoon at the Trident padel tournament, Bull is keen to share with Bear just how impressed he was with Canary Wharf. 

• Canary Wharf Group has invested heavily in diversifying the area, introducing more residential units, upgrading retail spaces and enhancing leisure facilities. They have now created a 24/7 destination where people can live, work and thrive.

• Office leasing activity in Canary Wharf has risen sharply this year, with the availability of space falling to its lowest level since 2018. The widening delta between prime office rents for top space versus the City and the West End means this demand is expected to continue.

• Enjoy your Sunday.

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House of Horrors

• After a night of Halloween horrors, Bear reviewed the Q3 2025 transaction volumes and is feeling gloomy about the inertia in the UK property market, which appears to be haunted by the spectre of Mrs Reeves's November Budget.

• Bull, however, is convinced that the final quarter of the year could mark a step change in activity, with a number of £100m plus deals in the London office market poised to complete.

• With UK property set to deliver total returns of 7.4% pa 2025 and 8.4% pa in 2026, Bull also believes that property could deliver on the upside and is buoyant about the prospects for the other sectors.  

• We may not escape the Autumn Budget unscathed, but there is momentum building in the market just waiting to be released.  

• Enjoy your Sunday.  

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Playing the Long Game

• Bull & Bear are discussing a slightly lesser-known long income alternative to traditional sale & leaseback deals that form part of many long income funds - income strips.

• Bull is initially apprehensive. He thinks they are fundamentally a bit boring and has worries about inflation outpacing market rental growth.

• Bear persuades him that given prevailing market conditions, income is king, and the sizeable margins over gilts makes long income products an attractive alternative to active property right now.

• Bull & Bear are having a week off next weekend for Half Term and will return on the 2nd November.

• Have a good Sunday.

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Change ... or Face the Consequences

• Bear is back onto one of his favourite topics … demographics.

• He reckons that within ten years there will be more old age pensioners in the UK than children and that will put serious pressure on the economy.

• Bull is sanguine. He can only see upside from the changes this will bring. ‘’Change means … more conversion, adaptation and development’’.

• The two of them reflect on how the property market has evolved over the past 25, 50 and 75 years and what lies ahead over the next 25 years.

• Change is inevitable. But even Bear admits that fortune will only favour the brave.

• Enjoy your Sunday.

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Student Struggles?

• Bull and Bear discuss all things student, and especially the rising cost of attending university. Students now need £61,000 over the period of a three-year degree course to maintain a minimum socially acceptable standard of living. And that excludes the £9,353 per year tuition fees.

• More than four in ten universities in England were expecting to be in a financial deficit by this summer just gone, and there is lots of talk about the consolidation and merging of universities.  

• According to Knight Frank, just shy of £830 million was invested in the UK purpose-built student accommodation market in Q2 2025, taking half-year investment volumes to circa £1.6 billion. Investors have shifted their appetite to standing student stock (rather than development) as a first preference.

• Enjoy your Sunday.

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Tech, Data and the Ryder Cup

• Bull & Bear drag themselves away from the sporting drama of the 45th Ryder Cup to discuss the impact of the US-UK Tech Prosperity Deal. 

• Bull is convinced that the £ billions of investments pledged by the US Tech giants such as Microsoft, Google and Nvidia will reshape the UK’s position in global technology.  And as the UK expands its digital infrastructure, the deal shines a spotlight on the increasing role of data centres.

• The complexity, capital requirements and other barriers to entry mean this property sub-sector will remain the remit of data centre specialists. 

• But as some of the traditional industrial-focused Reits seeks to expand their data centre footprint and expertise, even Bear is convinced that the story is compelling.  It's time to power up!

• Enjoy your Sunday.  And come on Team Europe!

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Regional Office Revival?

• Bull & Bear are loving the rapid growth in prime rents at the top end of Central London's office market. In Farringdon, there is talk of rents touching on £115 psf and rents have broken through the £200 psf mark in the West End.

• Whilst encouraging, Bear fears for the the UK's regional cities. Prime rents may be growing, but they are still a long way off a level that makes new development viable and the lack of new space coming through epitomises this. 

• Bull and Bear agree that whilst the regional office markets have their challenges, they'd like to see some brave developers come forward and command the rents needed to make development stack up. 

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An Oneirocritical Tipping Point

• Bull has had a dream. It may not have been as insightful as Martin Luther King’s, but he still needs to call on Bear to interpret it.

• Although Bear claims not to be an oneirocritic (dream analyst) he can only forsee problems ahead.

• Unsurprisingly, Bull sees the brighter side of life.

• Mostly though, they both agree that the market is at a tipping point. Whether it tips up or down hangs on the content of the Chancellor of the Exchequer’s Autumn Budget on 26 November.

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Residential Roundup

• Following their quick catch-up last week on the commercial property market, Bull and Bear do the same this week for the residential sector.

• Disappointingly, annual UK house price growth slowed down to 2.1% in August. Consumer confidence has also been dented by growing fears of potential job losses, while mortgage rates ticked up again last month.

• The housing market is currently delicately balanced and the noise around new property taxes is concerning. Supposedly, changes to SDLT, capital gains tax and national insurance tax for landlords are all possibilities in late-November’s Budget. Bull and Bear's concern is that transaction activity between now and the Budget will grind to a halt as a result of the speculation.

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