From View From The Top, 18 February 2026
Underbuilding the Future
Back in London. Off the slopes and smack bang into the rain, cold and darkness of February. Great stuff.
And while everyone debates rates, elections, and credit spreads, something far more important is happening quietly in the UK besides record umbrella sales. We are underbuilding housing — materially and structurally.
And almost nobody is talking about what that really means.
This is supply destruction in a risk-off capital environment and that is how the next cycle gets set up. This is where the opportunity is.
The numbers that matter aren’t in the headlines
We all know that UK housebuilding is running well below what’s required to meet structural demand and the starts have fallen sharply. SME developers continue to disappear. Planning friction remains high. Cost inflation hasn’t fully unwound.
On a per-capita basis, the UK is delivering fewer homes than many comparable global cities. We’ve seen that charts. We’re at the bottom, at historical lows. Sales have materially slowed. And yet demand hasn’t fallen away.
The middle still needs housing.
Not luxury penthouses. Not subsidised units.
The working professional. The young family. The dual-income renter locked out of ownership. The nurse, the engineer, the associates, the candlestick makers. Anyone who supports the needs of the real economy. That demand is not cyclical. It’s constant.
It is structural.
Risk-off capital doesn’t remove demand. It removes supply.
When capital turns defensive as it has over the past few years:
- Marginal schemes don’t get funded
- Leverage becomes restrictive
- Equity demands higher hurdles
- Developers hesitate or dissapear
- Homebuilders holding large land banks can’t move and are capital constrained
- Marginal schemes don’t get funded
- Leverage becomes restrictive
- Equity demands higher hurdles
- Developers hesitate or dissapear
- Homebuilders holding large land banks can’t move and are capital constrained
Projects don’t explode (that’s already been happening)
They just don’t start.
And every project that doesn’t start today compounds tomorrow’s shortage.
This is the quiet dynamic most investors miss, and that’s an opportunity.
Risk-off capital today creates risk-on opportunity tomorrow.
The squeezed middle has become the most resilient segment
In volatile environments, extremes wobble first. Luxury slows. Subsidy depends on politics. We are seeing this every day in the press. If you had to sell a luxury property in London if you really had to hit the bid you’re probably down ~ 40% from where you think you are. And refinance is not an option unless you can top up the cash.
But the middle — the working, mobile, income-earning middle — this doesn’t disappear.
If anything, it becomes more important now.
When ownership becomes harder, rental demand strengthens.
When mobility increases, professionally managed housing wins. When affordability tightens, efficiency matters. Like attainable professionally managed housing.
Underbuilding into that environment doesn’t weaken fundamentals.
It strengthens them — over time.
And I think this is where grounded operators win
Cycles like this are not won by financial engineering.
They are won by experience. Operators who have been through multiple cycles and the full capital stack. Those who know how to the dots connect and how structured leverage can work. To win in the market you need:
- Real land discipline
- Real cost control
- Real asset management
- Real alignment between credit and equity
- Real land discipline
- Real cost control
- Real asset management
- Real alignment between credit and equity
At Hilltop, our DNA has always been grounded in real estate first – what’s lacking, what’s the demand— and capital second.
Operating across both credit and equity allows flexibility when others become rigid.
In risk-on phases, capital flows easily.
In risk-off phases, delivery and structure become alpha.
the next 24 months will reward patience, structure, and operators who understand delivery — not just financial underwriting.
The contrarian view – now is probably the time
The prevailing narrative is cautious. But smart people are circling.
But here’s the truth:
Underbuilding in a structurally undersupplied country is not bearish long term. It is the foundation of the next pricing cycle. The opportunity doesn’t feel exciting when it’s forming and it feels uncertain and vague. Everyone hates vague. No one hates to first and wrong. Wrong means no career. It feels uncomfortable.
That’s usually the point. No one likes being a first mover.
Hard Landing
The most powerful opportunities rarely arrive with applause.
They form quietly. They form when others hesitate. They form when capital pulls back and only the disciplined remain.
Risk-off doesn’t eliminate opportunity.
It creates it.
And those who stay grounded — who focus on real assets, real demand, and real delivery — tend to look obvious in hindsight.
