Market appears to be in a ‘sustainable recovery’ – Anthony Codling

The Twindig Housing Market index rose by 6.3% to its highest level (71.2) since 13 March 2020 as both estate agents and property portals reported high levels of housing market activity in June and July.

Both agents and portals are increasingly confident that the mini-boom has bigger legs than they initially thought.

Following rather bleak market assessments in the previous week from some of the UK’s major mortgage lenders, estate agents and portals are reporting that the increase in housing market activity since the re-opening in May appears to not be merely the outworking of pent up demand, but a sustainable recovery.

Portals have reported record traffic levels. Rightmove said that its pre-COVID lockdown record daily traffic level has been exceeded 65 times since the market re-opened. It appears lockdown has made UK homeowners stir crazy and ready for a change.

 

The Twindig HMI measures investor sentiment towards the UK housing market. Digging deeper into the index an interesting picture emerges. Sentiment towards portals leapt by almost 14%, estate agents by c.9% but sentiment towards housebuilders was unchanged.

Portals and estate agents going up

Twindig has been genuinely surprised at the strength and increasing depth to the home buyer and home seller activity and with staggering traffic growth at Rightmove it is no surprise that investor sentiment is rising. Estate agents are a beneficiary of increased housing transactions.

Housebuilders left behind

It seems as if the housebuilders have been left behind. This seems odd as they too will benefit from the increase in market activity and last week’s planning white paper if adopted, is very good news for housebuilders (and their shareholders). If the white paper’s prophecies come to pass and planning times are reduced Twindig believe that the biggest UK Housebuilders could free up around £1bn each from their balance sheets which could either fund growth or be returned to shareholders.

Sentiment also increased at bleak house

As already mentioned the UK mortgage lenders have painted a rather bleak outlook for house prices this year. This is likely to impact both their appetite to lend at high loan to value (LTV) multiples and the pricing of high LTV mortgages. Investors, however, are more sanguine and sentiment towards lenders increased by 4.2% this week

Conclusion

Former analyst, Anthony Codling, of Twindig, said:

“I will always seek to be led by facts and data rather than opinion and the data is so far much more positive than I thought it was. It could still be a false dawn, but it is looking more likely that morning has broken.

“The debate will now move on to how good or bad the housing market weather will be and whether the impact of COVID will pass or cause the climate of the UK housing market to change for good.”

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3 Comments

  1. GeorgeOrwell

    Twindig Twaddledig Hindsight.com
     
    Another commentator spouting their view based on looking out the window and telling all what has gone before
     
    Surely you’ve saved up enough to buy a dusty tent and a crystal ball Mr Codling
     
     
     

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  2. GeorgeOrwell

     
    Conclusion
    Former analyst, Anthony Codling, of Twindig, said:
    “I will always seek to be led by facts and data rather than opinion and the data is so far much more positive than I thought it was. It could still be a false dawn, but it is looking more likely that morning has broken.
    “The debate will now move on to how good or bad the housing market weather will be and whether the impact of COVID will pass or cause the climate of the UK housing market to change for good.”
     

    Well done for getting paid to write this non-piece Mr Codling. That is the most notable acheivement

     

     

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  3. EAMD172

    Doesn’t anybody remember 1988? This market is being driven by a rapidly accelerating Stamp Duty holiday towards the edge of a precipice. Just as the removal of Double Miras did when the Chancellor announced in December 1987 that it would finish in August 1988. Massive demand for 8 months, huge price increases, followed by the biggest recession and price drops the housing market has ever seen. 40% price drop in 18 months. This may not be that bad but let’s not kid ourselves about this market being sustainable.
    Mr Sunak needs to rethink this policy. A gradual removal of the stamp duty holiday is the only way to avoid a cliff drop. £500k until March, £450k until June, £400k until September, £350k until December.
    Also, why not do more to help first time sellers where the flat market is stalling and stamp duty holiday helps them not a jot as they can’t sell their own. Remove the 3% additional SD for investors buying properties at the lower level.

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