Monzo Eyes IPO, Buy-to-Let Cools, Zero-Hour Contracts Rise & US Market Moves

A few key developments have surfaced over recent weeks that are worth highlighting. Among them: news that fintech bank Monzo is preparing for a long-awaited IPO, a fresh rise in zero-hours contracts despite looming reforms, and signs that the buy-to-let market continues to slow under growing regulatory and cost pressures.

Since the US stock market has wide-reaching effects and is still in recovery mode, we’ll take a quick look at what’s happening there. But first, we’ll explore the key developments impacting UK investors.

Monzo Prepares for Landmark IPO Amid Fintech Boom

• Monzo is gearing up for a potential £6bn IPO as early as next year, with preparations already underway to meet potential investors. The digital bank, founded in 2015, has seen a dramatic turnaround under CEO TS Anil, posting a £15.4m pre-tax profit last year after a £116.3m loss the year before.
  
  
• While Monzo's final listing location is yet to be confirmed, London is currently the frontrunner, with Wall Street heavyweight Morgan Stanley expected to play a major role in the deal. The IPO is likely to be timed to suit global market conditions, especially as political and economic turbulence continue to affect investor sentiment.
  
  
• Monzo is one of the few UK fintechs now operating in the black, joining peers like Starling and Revolut. The latter reported a staggering £1.1bn pre-tax profit and was valued at $45bn in its most recent funding round, which really shows the potential of this industry.
  
  
• Monzo now boasts over 11 million retail customers and 600,000 business clients, establishing it as the UK’s seventh-largest bank. Its growing user base and solid financials have made it a high-profile candidate for public listing.

Buy-to-Let Market Slows as Regulatory Pressures Mount

• Buy-to-let activity in the UK has fallen to its lowest level since before the 2008 financial crash, as taxes and tighter regulations deter new and existing landlords.
  
  
• Landlords now face significantly higher costs, including a 5% stamp duty surcharge, up from the original 3% introduced in 2016 by George Osborne. Rachel Reeves, the current Chancellor, has seemingly pushed buy-to-let into a profit squeeze for many investors.
  
  
• In response, landlords are shifting their focus away from the South and have moved to the Midlands and North, where property is cheaper and yields are higher.
  
  
• The North East has emerged as a buy-to-let stronghold, offering average yields of 9.3%—well above the UK average of 7.1%. Here, the average terraced property can cost £150,000, nearly half the price of an average buy-to-let in the South of England.
  
  
• Meanwhile, London is becoming increasingly unattractive for landlords, with yields of just 5.7% and declining rental returns. Rents on newly let homes in the capital have dropped for five consecutive months, and only 23% of landlords raised rents on renewals this April, down from 37% the year before.
  
  
• Further regulation looms in the form of the Renters Rights Bill, which aims to ban no-fault evictions and bring in fixed-term tenancy agreements. With landlords worried about their ability to reclaim properties from problematic tenants, investor confidence continues to wane.

The Rise and Resistance of Zero-Hour Contracts

• Despite growing scrutiny and government pressure, zero-hours contracts remain stubbornly embedded in the UK labour market. Recent ONS figures reveal that 1.17 million people were employed under such terms between January and March, just shy of the record 1.2 million seen in 2023.
  
  
• This marks a 12.5% rise from last year, flying in the face of Labour’s Employment Rights Bill, which promises to outlaw zero-hours contracts without the offer of work. Analysts had expected a decline ahead of the bill's passage, but instead, employers appear to be entrenching their use before reforms take hold.
  
  
• The Work Foundation warns that three in four zero-hours workers face “severely insecure” conditions, including unpredictable income, lack of benefits, and minimal contractual protection.
  
  
• A striking 81% of the increase in zero-hours contracts over the past year has involved women, while young people under 25 remain the most likely demographic to be employed under such terms. Still, older workers aren’t exempt—over 320,000 people aged 50 or above are also in these roles.
  
  
• What’s more, many people stay on these contracts long-term, with 67% having been with the same employer for over a year, and some for a decade or more, which undercuts the idea that zero-hours jobs are merely stepping stones or temporary solutions.
  
  
• The Employment Rights Bill has passed its third reading with strong support and is under House of Lords review, but implementation is unlikely before late 2026. With that timeline, insecure work looks set to remain a key feature of the UK economy for the foreseeable future.
  
  

US Market Insight

• At the time of writing, the S&P 500 sits just 4% below its all-time high, having risen more than 6% in the past week alone. This marks a near-complete recovery from last year’s 20% decline—a sign of renewed investor confidence, even if some caution remains.
  
  
• While some technical analysts have noted that “at current levels, further short-term growth may not be sustainable, particularly as it appears driven more by sentiment than by data,” others view the rally as a healthy rebound following months of volatility.
  
  
• That said, the current market backdrop remains complex. Questions around inflation, tariffs, interest rates and geopolitical risk could still shape performance in the months ahead.
  
  
• As mentioned in recent briefings, a degree of caution remains sensible until clearer signs of economic stability begin to emerge.

Final Note

This week’s developments revealed a mix of caution and opportunity across the investment landscape.

Monzo’s potential IPO may present a compelling opportunity for those looking to back one of the UK’s most prominent fintech success stories. Meanwhile, although recent gains in US markets appear promising, the speed and scale of the rally may leave some investors wary in the short term.

Buy-to-let, once a cornerstone of UK investment strategies, is clearly facing headwinds. Regulatory pressures, rising costs, and diminishing yields are prompting many to look elsewhere. With a growing range of property-linked investments now available—including real estate investment trusts, property bonds, and commercial property funds—investors are increasingly choosing more flexible, diversified, and cost-effective alternatives.

As the markets continue to shift, so too do the routes to returns, and we’ll be watching closely.