A property analyst has taken the long view and produced an optimistic snapshot of the current housing market for investors.

Anthony Codling of RBC Capital Markets says: “Housing transactions fell by 19 per cent during 2023 to just over 1.02m, which is slightly ahead of the forecast we made at the start of 2023 of 960,000.

“So far the 2020s have been an unusual period for the UK housing market, stamp duty holidays and the 2022 mini-budget added volatility leading to booms and mini-busts. 

“However, in the context of history, housing transaction volumes in 2023 were only 7.3 per cent below their 15-year average. Given all that was thrown at the UK housing market last year one has to admire its resilience in the face of pressure. Looking forward the seas appear calmer and the breeze is behind us, and the mantra of ‘survive until 25’ may need to be updated and upgraded to ‘thrive in 25’.”

Codling’s comments come as data from HMRC shows that the end of 2023 witnessed a large decrease in residential transactions, a trend attributed to the dampening effects of higher interest rates and a general sense of caution in the property market as a response to the cost of living crisis.

Higher rates made the prospect of buying a home less attainable for many, leading to an 18 per cent year-on-year decline in transactions by December 2023. The housing market has therefore been subdued, with activity slowing down considerably.

Tom Bill, head of UK residential research at Knight Frank, comments: “The improved outlook for the UK housing market means leading indicators like prices, buyer registrations and offers are already picking up. While transaction numbers were still falling in December, we expect them to rise this year as the impact of lower mortgage rates kicks in. Mortgage approvals are already creeping up and we think UK house prices will rise by 3% this year as activity increases. A general election later rather than sooner would help this momentum build.”