Anthony Codling of RBC Capital Markets provides an optimistic view of the current housing market for investors, highlighting the resilience of the market despite challenges.

Here’s a summary of his perspective:

  1. Overview of Housing Transactions:
    • Housing transactions fell by 19% in 2023 to just over 1.02 million, slightly ahead of the forecast made at the start of the year.
    • Despite the volatility caused by factors like stamp duty holidays and the 2022 mini-budget, housing transaction volumes in 2023 were only 7.3% below their 15-year average.
  2. Resilience and Outlook:
    • Codling acknowledges the unusual nature of the 2020s for the UK housing market but praises its resilience in the face of pressure.
    • Looking forward, he sees calmer seas and favourable winds for the market, suggesting a shift from survival to thriving in 2025.
  3. Recent Trends and Challenges:
    • Data from HMRC shows a significant decrease in residential transactions toward the end of 2023, attributed to higher interest rates and a general sense of caution in response to the cost-of-living crisis.
    • Higher rates have made buying homes less attainable for many, resulting in an 18% year-on-year decline in transactions by December 2023.
  4. Expectations and Predictions:
    • Tom Bill, head of UK residential research at Knight Frank, anticipates an improved outlook for the housing market, with leading indicators like prices, buyer registrations, and offers already picking up.
    • He expects transaction numbers to rise in the coming year as the impact of lower mortgage rates takes effect. Mortgage approvals are already increasing, and UK house prices are predicted to rise by 3% in 2024 as activity increases.
    • Bill suggests that a delayed general election would help momentum build in the housing market.

Overall, while recent trends have shown a decline in housing transactions due to various challenges, both Codling and Bill express optimism about the market’s prospects, foreseeing improvements in activity and prices as conditions stabilize and mortgage rates decrease.

LIS Show – MPU
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