Last week Friday, BofA downgraded UK housebuilders Persimmon (LON: PSN), Redrow (LON: RDW), and Taylor Wimpey (LON: TW.) on the view that 2023 will be a difficult year for the UK housing market.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
With soaring inflation and interest and mortgage rates rising, the UK housing market has been pressured, with demand expected to continue to decline further. This week, according to Zoopla, UK house-price growth over the last three months has slowed to its lowest level seen since February 2020, while 2023 will probably see further declines. In addition, the housing website said demand fell 44% year-over-year in the four weeks to November 20.
Ready to put what you’ve learned into practice?
Try IG’s platform with £10,000 in virtual funds and practise trading
without putting your own money at risk.
Try IG with a demo account →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Learn the markets with IG Academy
Build your knowledge with IG Academy educational content, then use a
demo account to practise what you’ve learned on the IG platform.
Explore IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
See how trading works before risking real money
IG’s demo gives you access to thousands of markets and £10,000 in
virtual funds, so you can explore the platform and test your ideas first.
Open an IG demo →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Turn trading theory into practical experience
Learn with IG Academy, explore charts and market tools, and practise
strategies in a simulated trading environment before going live.
Start practising with IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
Ready to take your learning further?
IG combines market education, analysis and an established trading platform,
giving you the tools to keep learning as you develop your trading skills.
Discover IG →
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
BofA said in its note last week that the firm expects 2023 to be the most challenging year for the UK housing market since 2008, while the “crucial spring selling season would likely be beset by affordability issues and negative sentiment among buyers.”
BofA analyst Anthony Manning downgraded Persimmon to Neutral from Buy with a 1,400p price target last week, telling investors in a research note that Persimmon has the sector’s highest profitability, and he believes it has the greatest near-term risk to volumes.
Redrow was downgraded to Neutral from Buy with a 495p price target, with Manning stating that the consensus is too bullish on Redrow’s customers being less price sensitive.
Manning double downgraded Taylor Wimpey to Underperform from Buy with a 100p price target, explaining that the company has the most overall risk, and its large site strategy offers little protection in a period of low demand.
