The Worst Places To Buy In 2026

0:00Have you ever wondered what successful property investors actually do? Well, after more than a decade of helping thousands upon thousands of people invest, we found that actually it's really simple. The investors who do the best are just following some basic principles and sticking by them. So we put together an entire guide that sums up these principles, an investment philosophy, if you like, and you can find that for free at PropertyHub.net forward slash strategy. Hey everyone, it's Robby here with RobD and you are listening to the PropertyPodcast. We've got seven areas for you this week that you should never invest in. Right now, this year, these places are absolutely terrible investment locations. Luckily, we're going to share them all today so you can avoid pain. Welcome to the PropertyPodcast. In case you don't know, we run a business that buys more than

1:02hundred million pounds worth of property every year for our clients. You can find out about that at PropertyHub.net slash Invest. So of course, we are very interested in finding the best places to invest. But even more important than finding the absolute best is avoiding the absolute worst. The location is the one thing about your property that you can never change. So you don't want to be getting this wrong. So we'll be sharing those areas to avoid in just a second. First off, it's our new story of the week and this week, big headlines from mortgage strategy website. And if that wasn't enough, mortgage finance Gazette have also covered this breaking news. We love a niche website. That the rental sector in the UK has contracted by 48 billion in 2025. Rob, we both agree that sentiment in 2025 was a pretty low point for vital it in the UK, but that's some number. It is. And it's not because house prices have fallen. It's because landlords are selling up. So prices have fallen that houses haven't disappeared,

2:05but they're moved from being in the rental sector to being owned by homeowners. So this data from Savils says that owner occupiers have basically been the winners over the last few years. It says over the last three years, the private rented sector has contracted. It's decreased by 5.1% despite the UK housing sector growing by 3.8% overall. It's the only sector with market that shrunk. And the commentary says that of the smaller landlords selling up, some of it is being absorbed by larger landlords, who of course are more professionalised, better able to deal with the new challenges that have come along, but a lot have been sold to owner occupiers. So Rob, we've heard a lot and it's totally about landlords selling up, but here it is in the numbers and it's far bigger than I expected. It is, but it's biggest important to understand that the majority of these landlords are what we call legacy landlords, because by the way, for the people who have been in for a long time, it's much tougher now because they would have bought their properties in their own names from a taxation point of view. It's not that attractive to do that anymore to move it over to a limited company is expensive to do and really not worth it in most certain centres.

3:08So you can see why they dex it, plus if it have been in it for a long time, they will be a bit older and they'll have a fair bit of money in those properties as well. So I think those landlords will continue to exit the market and I wouldn't be surprised to see a deficit again in 2026, even if property prices do quite well this year, just because those legacy landlords will still just take the money off the table. But I see this even in an out over time because you've got investors coming into the market every year and there's only so many legacy landlords to leave. So at some point that number will start to rise again, particularly as sentiment improves. So a big number, one that still surprised me, but the result that it's a negative trend right now, not surprising at all. Definitely not. And the thing, of course, that's been the straw that's broken the camel's back for a lot of landlords who've been in the game for a long time, is rental reform. That's something that's been talked about for years and it's been grumbling about for years. But now of course it is finally happening. It's coming in in May. And I think the forgotten victim in all this Rob is me because I've had to go and completely update my book How to Be a

4:09Landlord to deal with all this. But I have done it. The second edition of How to Be a Landlord is out now. I've completely rewritten large parts of it to bring it fully up to date for all the changes that are coming in and to celebrate its launch for this week only, it's super cheap on Amazon. So the Kindle version is 99p. The paperback is as cheap as it will let me do it. I think it's about eight pounds. So I'm making no money on it. It's just a cost of printing through Amazon. So if you do want to grab that new edition of How to Be a Landlord and know everything you need to note, to be ready for the Renters Rights Act this week is the time we'll put the link in the show notes or you can just go search it on Amazon. Over the long term property is really forgiving and you can do very well through property if you just stay in it and persevere. But why would you want to play on hard mode? Why would you want to make mistakes up front? And one of the biggest mistakes that we see is that people just buying in areas that they really shouldn't. They're making investment decisions in areas that make you go into property investment on hard modes. You do not want to do that. We want to help as many people as possible. So in this week's episode, we're going to share with you the worst areas that you can invest in this year. Do not proceed

5:14until you've listened to this podcast. If one of the areas that you're looking at right now or even in a process of buying in right now are in this podcast, well, you may want to reconsider after listening to this week's episode. Let's start with one that may not be a surprise for many, but I know lots of people live in this area who listen to the podcast. And that's the Southeast of England. If this is coming as a surprise, you haven't been paying attention. The Southeast has been massively struggling for the last few years. It's the worst performing region at the moment. According to home track, it's had 0.3% growth over the last year. There are also cities within it like Southampton, Brighton, Portsmouth, where prices are actively falling. And the reasons are pretty obvious. We've covered them before. This part of the country has already had its growth spurt. It hit an affordability ceiling. And then with mortgage rates going up as well, it's just put the region under so much pressure. There's really nowhere for prices to go. All prices can really do is stagnate until wages go up and create some more headroom. And the critical thing is this isn't going to resolve overnight. So according to savvles,

6:15the Southeast is going to have half the growth rate of the northwest over the next five years. So you put it really well robbed with hard mode. So sure, you go find an incredible deal. You can negotiate a great price. And there will be deals to be done because lots of people are looking to get out of the Southeast. But still, the market is just not going to be helping you out. It isn't. And you have to remember as well the impact of stamp duty in the Southeast. Everywhere is pretty expensive. There aren't many cheap areas in the Southeast. So stamp duty to just move home is prohibitive. I know in the past I've considered moving home and I didn't because of the stamp duty. Well, you have to remember there's actually a stamp duty surcharge with Biterlet. So that makes it even more prohibited. So the numbers aren't just not attractive at all. When you get in, you are paying so much up front to just get started. It will actually take some time before you break even just to pay for the transaction costs with your rental profit. So you really have to own it for a very long time before you start to see the wins. And yes,

7:20at some point in the future, the Southeast will make sense again as an investment. But not now. Another place that does not make any sense now is the Southwest, particularly coastal and holiday alert areas. Now, if you go back a few years, the Southwest was doing really well. And that's because during the pandemic and just after it, Brits flocked to the beaches, the countryside there, and investors saw an opportunity and piled in. And lots of holiday lets were bought up in that area. Prices did spike and short term let's absolutely boomed. And for a short period of time, people made some great money there. But COVID ended, people started to go overseas again. Let's face it, the weather is much better. And suddenly, there was a glut of those properties in the market and they are coming back onto the market all the time, which is really suppressing house prices in those areas. The other thing you have to remember with the Southwest is the fundamentals that we talk about on this podcast all the time. Aren't really that strong there? So when you consider, like, does it have really strong

8:23transport links? A lot of places in the Southwest don't have good motorway networks. Never my good trains. So the fundamentals they transport big employers? Yes, you could point to a few, but there are many, many areas across the country that you can say, well, it's stronger on nearly every level when you look at fundamentals. So if suppress prices more stock come into the market because the people exiting holiday legs in that area, the lack of fundamentals. For me, Rob, the Southwest is arguably worse than the Southeast because at some point in the future, I could seem to be making investments in the Southeast if the opportunities were right because the fundamentals are great, particularly if you are commutable to London. But the fundamentals, unless something dramatically changes, they're not there with the Southwest. So for me, not only does it make the list this year, I could see this making the list every year from now on. Yeah, I feel duty bound to say it's a beautiful part of the country because it is. Because I don't want anyone spitting in my closet cream next time I go down that way, but the point is that yeah, it's true from an investment perspective. And obviously,

9:25there are people who make investment work here. If you've got a strategy that is more hands-on, then you need to be closer to home. If you know your area inside out, you've got a really great system for doing your refurbs and all the rest of it. Obviously, you can make investment work in this area. But what we're saying is if you could pick anywhere, which as a long-term buy-and-hold hands-off investor you can, because proximity doesn't matter, then why would you choose these regions when there are so much better choices out there? Now, the next one hurts because I do love a bargain. But the next area to avoid is not a whole region. I think we've vended enough people for now. It's places you'll find dotted all over the country, which are ultra cheap towns. So we're talking about the type of place where you can pick up a house for £50,000, £60,000, £70,000. You'll see it on right-move all-suitpler. You'll work out the yield. It's double digits and you'll get really excited. This is amazing. I hardly have to put much of a deposit down. I'm going to be collecting so much rent. Now, I can speak about this with authority because I've made this mistake before and I can tell you that the problems start very soon after you take ownership.

10:25Normally, the housing stock in these areas is not particularly well maintained. It's not particularly modern. So immediately, you're uncovering problems that you weren't expecting and you hadn't factored into your numbers. Then, when you go to rent it out, there's the issue of the tenant profile. Now, again, making giant generalizations, but in the types of areas we're talking about, you tend to get tenants who aren't the most financially secure and tenants can be harder to manage. Especially if you get areas that are highly reliant on universal credit, then just the nature of the universal credit system and how it works means that you are far more likely to get arrears. And again, Rob, it is possible to make money in these areas. People do it, but it should be seen, I think, as something very specialised that's not for everyone. You said this painful for you, Rob. It's really painful for me because I've made this mistake. And I've still got some of these properties in my portfolio that at the first opportunity I can, I will exit. I'm just waiting for the market to be a little kind because the problem with these areas is that the last areas to rise as well from a capital growth point of view. So when the

11:26market recovers, the best areas move first with capital growth. And then eventually, it finds its way to these cheaper towns as well. Now, we've talked about the monopoly strategy a lot on this podcast. And these are some of the early properties that I purchased many, many years ago. And I could tell you, the capital growth on these properties has been truly horrendous. And you're right, they can come with problem tenants. One of the things that really annoys me is that you can have 10 good months and then suddenly there's a problem with that property. And your rental profit for that year is wiped out or the majority of it because your rent is in that high. So if a boiler does go, that's your rental profit gone. In more than one year, I've used these properties to offset profits because these properties have made a loss. Yes, because of the problems that these properties have stored up and I've had to pay for, they've lost money. I've used that to help me with my tax bill. That's not a good strategy. That might sound good, but you don't want to buy properties just to lower your tax bill because they're going to be that

12:29bad. So I really do think that you should avoid these properties because I've felt the pain and I do not want you to feel it too. And we get this type of question on Ask Rob and Rob a lot, like should I wait and just build up to post it a little bit higher before I move forward. And the answer nearly, not always, but nearly as always, yes. Because remember, if you're using the mortgage, if you could save another 10 grand, that allows you to buy a property with 40 grand higher because you're leveraging at 75% most of the time. So for every pound, you save as a general rule of thumb by a property four times that that's why you should keep going because soon you will move into a category of property that does become attractive. The next one, Rob is not the entire city because we actually think there's opportunity ahead, which will be another episode completely with this city. But there is absolutely a type of stock within this city that has been hammered over the last couple of years for many reasons. Well, actually much longer, but particularly the

13:33last couple of years. And it's going to take a while before it becomes attractive again. And I do think a bit like the southeast, it will become attractive again. But right now, it's a synch in ship. Yes, we're talking about Prime Central London. So where we in the industry talk about Prime Central London, we're talking specifically about the likes of Mayfair, Nightsbridge, South Kensington, areas like that that tend to be the very most expensive. You're typically looking at the most expensive 5% or so. That's the most expensive 5% of London, which is already expensive. So this is not somewhere that most listeners of the podcast will have as their core area because you talk about millions to get into this area. But you're increasingly able to buy in less and less because prices have fallen dramatically. Prices in Prime Central London have fallen by 24% since 2014. They've fallen by a quarter. That's unbelievable. And you might think, oh great, now's the time to get in then. No, you're catching a falling knife. Even in 2025, prices dropped by another 4.7%. Now at some point, that will create an opportunity. But if you look at the reasons that this has

14:37happened, Rob. So again, taxes, mortgages, and especially the exodus of non-doms and wealthy people who used to be the prime targets for this area, who are moving abroad, it's hard to see that changing anytime soon. It really is. And this is the part of London and get all the headlines, which is why I alluded to there might be opportunities elsewhere because this is talked about so much that everyone thinks London is completely dead as an option. And understandably so because these properties are so expensive to begin with, a reasonable percentage fall is a huge amount of money in pound notes. I'm in a lot of WhatsApp groups with entrepreneurs and they're from all over the world, including some of those who've exited the UK. And it was staggering last year. How many people in WhatsApp, because that's how desperately must have got, had prime central London property. And they were asking, like, does anyone know how I can access this? Who's best to sell it? Does anyone want to buy it? They're up for doing a deal. But like you said, Rob, you don't want to catch a falling knife. It's got further to go. But if it's made of my WhatsApp groups, those people

15:40tried to sell. You can see how desperate things have become. So prime central London is definitely want to avoid. And we're feeling generous, Rob, or maybe we're just like picking on areas, but we've got a few other quick ones to add in. So they're the main ones. They're the main four. But we've got a few others that will quickly reel off that you should be very wary of if you're considering investing there. Yeah. So the first one, probably again, won't come as a surprise to regular listeners, but Scotland, sorry, Scotland actually have a lot of love for Scotland, but do not have a lot of love for the Scottish government. The story of the past five years or so has just been more and more regulation, very confusing regulation at times. And now with a new housing act that they're going to bring in with Brent controls, both within and between tendencies, potentially, it is just so landlord unfriendly. That is why the big institutions are putting out of Scotland. It's why the number of landlords is shrinking. And so to do before that other areas, we'll say again, you can make it work there. People do make it work there. But for me, firmly in the too hard pile. So that's one country eliminated. The next thing I've got at my notes here Rob is overseas in

16:44general. Well, we've done a lot of places. Rob, so let's take on the rest of the world. It's not that we are crazy and we think the UK is the only place to invest in the world. But again, this is a mistake I very nearly made and I was lucky. I got out of it and we're talking many, many years ago. Now we're probably approaching 20 years ago where I nearly invested overseas. And actually, I knew that market really, really well. But I witnessed so many people investing overseas. We're talking about the last boom when lots of people are piling overseas investing in areas that they just didn't know or understand. Just because the property was going up, they thought that was a good bet. But the legal systems so different, taxation so different. The way the markets can operate in different countries. Again, it's not always open up and up. Some areas are suppressed in terms of property prices for good reason. So the advice here is just do not go overseas lightly to invest. If you've been on holiday somewhere a few times, it does not make you

17:47an expert in that local market. Of course, this excludes expats who live in those areas who've got to know those markets or maybe you've got family from there or used to live overseas. So you know those markets really well. But it's the way some people invest so aggressively and lightly. And it's such a cavalier manner when things are so, so different. Yes, it's property. Yes, it's a home. But besides that, everything else is very, very different. So do not fall in the trap of feeling go out. I'll make a bit more of a exotic investment because it feels exciting. It might be more exciting. But after you've owned it for 12 months, it may feel like an eventually you did not want to go into. Yes, so rare to see that end well. But a lot, a lot of horror stories. I think you're lucky Rob to get out of that when you did. But let's bring it back home to round up this list of areas to avoid. And this category is what we're calling specialized areas. So these are locations that are very strongly dependent on one particular sector or one particular employer. So the most obvious example here is Aberdeen. Aberdeen is its own property

18:48market because it is so dependent on the oil market and the price of oil. Its cycle is completely disconnected from the rest of the country. It's absolutely wild. So you can do really well in Aberdeen. But you're basing that on predicting the oil price rather than property prices. So it's very, very specialist. Then you've got places like Sondland, which is very dependent on car manufacturers. And then you've got Barrow and Furnace, which is almost exclusively dependent on one big employer, BAE systems. And that just, of course, means that if anything happens, so as to that employer, if they pull out for any reason, something crazy happens, then suddenly the whole area is so much weaker. You're going to get a big spike in unemployment. It's going to be really tough. And there's not a lot you can do about it because you can't pick up your property and move it. So that's why Rob Location is everything. And at the moment, Location is so easy. It's great if you can find the next secret hotspot. But even if you just get the right quadrant of the country right now, pretty much the right half of the country, then you're putting yourself at such an advantage. You are, and I could list them off. We're going to take long Northwest Yorkshire, Midlands. There are great places to invest there right now.

19:54That's where we're investing all the time and our clients are too. And we're all doing very well off the back of it. It's not rocket science, but yet some people choose to play the investment game on hard mode. And it will take many years for you to undo those mistakes. So please do not make them in the first place. Right, sign the hub extra now. Rob, you've dropped in before that you've updated your best selling book How to Be a Landlord because a lot has changed in the world. So it needed updating. Well done for persevering through that. But also well done for slashing the price in week one. I'm making it really accessible. I think that absolutely has to be our hub extra. If people haven't got it already, those prices, you know, kindle for a pound. I mean, that's an absolute steal. Just get it done. It's a great hub extra. If you have not read that book yet, sure many people have read both of your books. But if you haven't got that in your collection, this is the week to get it. Thank you. Yes, you can find that on Amazon and the link will be in the show notes. But that is us done for this week. Thank you for joining us. We'll

20:54be back to do it all again next Thursday. And in the meantime, if you're not already signed up to Property Pulse, a free newsletter that goes out on a Friday, make sure you do that. It's packed full of everything you need to know, loads of good stuff. Just go to PropertyHub.net, slash Pulse to sign up. But until we see you next, have a great week. Bye-bye. Bye-bye.