Hey, guys. So welcome to this week's “UK Property News.” So first up, house prices are going down, and the thing I think we need to really take into account here is not the fact that they're going down because one of my principles is always about getting local. So when we talk about statistics, UK house prices are going down, yes, they are. And look, the part of the cycle we're in is such that house prices are starting to ease off. Now, in some areas, they're still going up. So you have to get local, and I think that's one of the key things here. If you don't read the stats and look at where the stats are from, what they're made up of, because right now actually London is decreasing in price, the others areas are actually performing reasonably well still. And you know, nothing's setting this house on fire, but it is still doing very well. And you know, I mean, you've got Brexit, you've got all these sorts of things that are being factored in right now. But overall, actually, the market is still relatively strong. There are places that are performing well. You've got Manchester, Birmingham, we'll talk about it soon, but you know, a lot of those sort of things are coming into effect now.
So it's not all doom and gloom, it's not all a case of, you know, we need to actually throw the baby out with the bathwater. We've really gotta now start absolutely looking at where the fundamentals are, and if you're gonna buy now, you've gotta buy in the right places, and I think that's the key here. So get local, look at these stats that are local, and then get your fundamentals. And when you do that… Oh, and the third thing is making sure you negotiate because the reality is the market is slow, so, therefore, you can negotiate harder. And that's where the ridiculous offer…and you know, now I'm starting off with the ridiculous offer. So whereas before I might've been saying 10 knowing that I'll probably end up with 5, now I'm saying 20 and they're saying, “That's ridiculous,” but I'll probably end up with 10, you know, so depending on where the area is, and that sort of thing. I mean, certainly in Manchester, Birmingham we're not going to be getting that.
So this articles about the Bank of England wanting to…well, potentially, it's a think tank saying the Bank of England should freeze house prices for five years. Now, how can they do this? Well, by really clamping down on the availability of mortgages, which you know, I kind of look at this and think, “Aren't they already doing this?” I mean, look, make no mistake, if you look in London, it's a different story than if you look outside London. And I'm sure, Manchester, Birmingham, Leeds, and a few other places are doing quite well. You know, you're hearing about Edinburgh now, you're hearing about Cardiff, you're hearing about some of these other major cities are now going to start to play, and we'll start talking about them, you know, each week as we sort of grow into this and talk about different things, because those areas are starting to take off. But if you step outside the major cities, what growth has really happened over the last 10 years? And they want another five years? See, the thing is, I look at it this way, if you sprain your ankle, you know, you go and you fix your ankle, you put some attention to your ankle.
So if you got places that aren't performing very well, put some attention to them. But that doesn't mean that you should ignore the rest of the, you know, body, and you know, say, “Right. I'm gonna take everything out of London and put it into,” wherever it might be, Glasgow. Nothing against Glasgow property. The reality is, you know, you put some attention to it, and I think that's the problem now, is the government really is doing these big projects, HS2 and that sort of stuff, which are gonna benefit certain places along the way, but are they really gonna benefit these little towns and that sort of stuff? And my concern is they aren't, and that's one of the reasons why now I'm pretty much off investing in small towns. You know, I'm talking about less than 100,000 people or population. Now, those sort of areas, unless you've got specialist knowledge and a specialist strategy for that area, then fine, no problems, but on the level that I look at where I'm investing in an area because I want to see capital growth and income return, and I want people, you know, available to rent my property at all time, I'm not looking at those sort of places.
So let's talk about Manchester, Birmingham, I mean, these are gonna feature quite a bit over the next probably year or two. Well, you know, the market there is still fantastic. You know, you talk about the success of the city, about the cranes in the sky, go take a look at their skyline. It is amazing how much is happening there. Now, you might say, and lots of investors say to me, “But hold on, Brett, doesn't it mean, cranes in the sky, I mean, they're all gonna complete at the same time? I mean, they'll complete, have property, you know, values and rents?” Well, yes and no. See, the increase in the fundamentals is what really counts, and that's actually what we really want to look for, is the increasing fundamentals, from shops, schools, transport and its major employers, major investment, all these sort of things that go into fundamentals, and that's what we want to do. Manchester's, you know, absolutely, you know, all over the news. Birmingham, interesting, Birmingham, some of the stories that are coming out now.
You know, first-time buyers are struggling to get on the ladder, because of what's happening. Prices are starting to increase. There's the infrastructure and there's the spending been going in for a few years now, and now we're starting to hear a lot more about Birmingham. Just as I'm gonna start raising things like Leeds, okay, may not have heard of Leeds, but you know, there's lots and lots going on. You know, not the least, you've got the HS2, you've got, you know, things like a $400 million-project here, $87 million-project here. That will fundamentally change, and I use that word a lot because actually that is the type of investor I am, and that's the type of things I look for, is those major regen projects and try and piggyback on the back of those. But get in early enough, before, you know, you get this increase in prices. Okay? So that's key.
So this article's about…you know, this is from the “South China Morning Post,” which is in Hong Kong, but I thought it was quite interesting, because you know, 7000 agents, and we're talking about lettings agents, high-street agents is what they're sort of targeting, potentially at risk of going bust. And you know what? I 100% agree with this. See, there's a couple of issues. If we as letting agents, and I have a letting agent, don't change our model and evolve, the landscape now is changed significant enough that you will go bust. You know, tenant fee ban as of April next year, which means we can't charge tenants, which means we can't tie them down to taking a property, which means they're free to do whatever they want, which means it could take longer for your property. You've got more void periods. You've got the added costs of, you know, who's gonna pay for referencing and all these sorts of things? You know, there are so many aspects which if a letting agent isn't able to, you know, handle the disruption, handle the change, then they're stuffed, and 7000 that they're quoting.
It would not surprise me, so I think what we're seeing right now is a lot of small agencies. And certainly, with a lot of agencies that are owned by, you know, people that have been in the industry for many, many, years, who've just decided, “You know what? Enough's enough. I'm out.” Okay, so there's a lot of consolidation, and unfortunately, what this government has done is, every way they go they're trying to get big businesses to run everything, and the small businesses, you don't have a chance. You know, and that seems to be the policy of the coalition government. Now, my challenge is, is that as a landlord, you know, if Labour comes in, what you might find is that actually Labour will turn the other way, but because there are landlords, we'll be thrown in as, oh, “rich landlord.” You know, all of the sudden, you know, even though we're not the big guys, we're also not the small guys, we're not classified, so we'll cop it both ways under coalition Labour. So there's no real choice as to who we should vote for as a landlord of a, you know, small portfolio, between 1 and 20 properties, or 50 properties. You know, that's our dilemma right now.
So I always like to finish on a Brexit. Well, I don't like to finish on a Brexit, because it's rather a boring and just [makes noise] story. But look, it appears that May has now taken over the negotiations, so now with a Prime Minister taking the lead, which means the whole department, the Brexit department that she's got. What the hell are they doing? I don't know, but May will work that out. Potentially, working out what happens with the no-deal. I don't know, we'll see. Also, we've got the EU. It's interesting with the EU because you know, we hear about the Brexit a lot, the Brexit side, or British side, but the EU side, I mean, with so many different people and so many different opinions, how are they gonna sort this out? And they are struggling to sort this out. They're talking about October to have a deal, you know, the makings of a deal.
You know, I don't know. It's not only from Britain's side, it's from the EU side. You know, there are lots of different parties at play, lots of different politics. You know, there are certain people that want to punish Britain and make sure that they send a message out to anyone else who tries to leave, but then there are the other people who are pragmatists, and say, “You know what? Hey, if we kick them out and we destroy them, we also destroy ourselves.” Now, I think, personally, there's not gonna be any disruption…no. There will be disruption, but I don't think there'll be destruction. Okay? So I think that's the key point here. The trick, all of this and everything we talk about now is, what is the opportunity? And that's what you need to find out. All right, guys. Have a great day. Live with passion.