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UK Investment Property: September News
Two pieces of news from the UK to perk you up this month; firstly a new help to buy scheme announced, Your First Home, to go live at the end of the year and secondly a study timed to coincide with the 30th anniversary of the first ever buy-to-let mortgage showcasing some very surprising data about the real drivers of profit when it comes to property investment.
Let’s start with Your First Home where first-time buyers will be able to get an (initial) interest free government-backed equity loan for 20% of a property’s purchase price with a 2.5% minimum deposit. The scheme comes with a number of qualifying factors; income caps, deposit caps and regional caps on how much you can spend to ensure it’s targeted at the right people (i.e. probably not overseas property investors). But, investors should look at the announcement as very good news indeed.
Why Your First Home is good for property investors.
In short, it brings a sense of urgency to the market again. The first Help To Buy scheme helped 328,000 buyers get on the ladder. And so we expect to see a flurry of transactions in new build homes and apartments when the scheme goes live at the end of 2026, kickstarting market activity again and likely transitioning us from the current buyer’s market back to a seller’s market, given the sluggish delivery of new housing since the pandemic. If you needed any evidence of this, the fact that share prices in England’s major housebuilders leapt, immediately after the announcement, should suffice. Persimmon shares closed out the day, trading 14% higher.
In their most recent market update Savills wrote “when mortgage rates do fall, there is likely to be a degree of pent-up demand in the market.” This scheme is effectively altering the economics of mortgage rates for first-time buyers and thus we expect to see demand rise immediately. Hence why for investors they might like to regard the UK market – particularly London and the wider South East – with a sense of urgency. Buying now before prices begin to rise again – and rise they will given the lack of new build stock, at its lowest level since World War II – presents a finite window of opportunity for investors to negotiate a great deal.
What’s more, when first time buyers are happy, the market in general is happy. We’ve written before about what a bellwether first time buyers are for the UK market. In summary, it’s because they’re often the entry point for chains thus affecting the liquidity of transactions across the wider market, they set the pace of new demand, they account roughly for half of all transactions in a year and their actions are seen as a barometer of confidence in the market in general. You can read about this in further detail in our dedicated explainer of the new Your First Home scheme.
Now, moving onto the 30th anniversary of the buy-to-let mortgage and some very revealing research published by Hamptons that tracked the profitability of a buy-to-let investment since 1996. What do you think drove the vast majority of the returns – the rise in property values over 30 years or the rental income? Over that length of time, we probably would have plumped for the former, but the research showed that rental income drove two thirds of profits. And what a profit it would be too, for anyone still holding assets they bought in 1996 every £1 invested would be worth £22.30 today in total returns. That’s a 2,130% increase, outperforming the S&P 500, FTSE 100 and even gold prices. Again, for a more in depth analysis for what this means in 2026 read our separate blog on the research. But for now, rest assured it’s good news. If rental income is the key driver of profitability over the long term and we are entering an era of unprecedented rental growth, then landlords should be buoyed.
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About the author
richard bradstock
Founder & Managing Director
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals.
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