James lost his home as a teenager after his Dad's industry was wiped out by the internet boom and mortgage payments became unaffordable. James built the metaphor of The Drawbridge as a framework to explain macro trends and help people avoid being stuck on the wrong side of the rising bridge.

James' firm partners with some of the most experienced investors on the planet building real estate strategies. The goal here is to democratise that knowledge for everyone.

There's not a wealth gap, there's a knowledge gap.

Rent (England) - £1,434
5Y +32.9% Rents are stabilising near term, but demand has kept outrunning supply.
YoY +3.5% The Renter's Rights Bill is an artificial upward pressure on rents.
MoM +0.3% The latest move points to stabilisation, not reversal.

Price-to-Income - 8.06 (House prices relative to average earnings)
5Y -10.8% This is an affordability adjustment for buyers as incomes beat prices.
YoY -2.9% The adjustment is still edging forward.
MoM +0.1% The short-term trend remains a little easier for buyers.

Pay-to-Income - 0.43 (Share of income spent on mortgage payments)
5Y +13.8% A larger share of income is still needed under post-Iran War mortgage pricing.
YoY -6.5% Wage growth has offset some of the rate pressure.
MoM +0.7% Monthly affordability remains sensitive to rate moves.

Average Salaries - £35,984
5Y +29.3% Income growth has rebuilt borrowing power.
YoY +3.3% Pay is still supporting demand.
MoM +0.1% The monthly trend remains steady.

Unemployment - 4.9%
5Y -2.0% The labour market has held up overall.
YoY +11.4% Whilst unemployment is trending upwards, the trend paused this month.
MoM -5.8% The monthly labour read can be volatile.

Sales Volumes - 45,094 transactions
5Y -47.4% Activity is still far below old norms.
YoY -30.8% Liquidity remains very weak.
MoM +0.3% The short-term bounce was cut short by the Iran War.

The market looks frozen, but in reality it is down c.10% over five years in real terms while up c.15% nominally. This is very similar to the mid-1970s, when nominal prices rose c.30% but real house prices declined c.30%.

This happens in high-inflation environments with high interest rates. The price of things increases but people's buying power declines. They have more pounds in their bank account, but in real terms they are poorer.

House-price-to-income ratios are improving, so housing is becoming more affordable for buyers. Once rates reduce, house prices can accelerate higher both nominally and in real terms.

The information contained in this newsletter is for general information and educational purposes only and should not be relied upon as financial, investment, tax or legal advice. Whilst every effort has been made to ensure accuracy, no representation or warranty, express or implied, is made as to its completeness or accuracy.

All views expressed are those of the author at the time of writing and are subject to change. Market conditions, economic data and forecasts may evolve, and past performance or trends are not reliable indicators of future outcomes.

Before making any investment or financial decision, you should seek advice from a qualified and regulated professional adviser who can take into account your individual circumstances.

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