Bricking it: How Rising Interest Rates are Shaking Up the Housing Market

(Music plays).

Susannah Streeter: Hello, and welcome to Switch Your Money On, with me, Susannah...

Sarah Coles: And me, Sarah…

Susannah Streeter: Your regular double act, otherwise known as the Head of Money and Markets at Hargreaves Lansdown…

Sarah Coles: And the Head of Personal Finance. Now given our roles, it won’t surprise you that we spend an awful lot of time talking about interest rates and where they’re going.

Susannah Streeter: It’s hardly a shock that there is so much interest in this topic, given what it means for our money and our spending power. Right now, that looks set to be squeezed a lot further, because the Bank of England has of course just hiked rates and we’re bracing for more in the months to come.

Sarah Coles: And of course it has a big impact on the housing market, so we’ve already seen prices recede from the peak in September last year, and I’m expecting house prices to fall even further from here.

Susannah Streeter: So that’s what we’re focusing on in this episode, Bricking It: how will high interest rates affect the housing market?

Sarah Coles: We’ll hear from Sophie Lund-Yates, our Lead Equity Analyst, about the outlook for housebuilders, plus our Environmental, Social and Governance specialist Laura Hoy will be explaining how new environmental rules could affect construction, and how landlords and tenants have been affected by recent regulation. We’ll also take a temperature check with a fund manager a bit later in the programme, and we’ll speak to Ian Hodgkinson, Founder of Hodgkinson Builders, a housebuilder and developer who’s been experiencing all of this at the sharp end over the last few years.

So Ian, it has been an interesting few years, hasn’t it?

Ian Hodgkinson: Oh, blimey, yes, it has been, definitely an interesting few years, and if we turn the clock back to a point in 2017 and ’18, which was fine, we've got steady growth, low inflation and we could see a clear pathway to Covid disruption there and then high inflation afterwards, so yeah, it’s been interesting, yeah, very interesting, and trying to keep up with things, yes, definitely.

Susannah Streeter: Well, we’ll see how you’re doing just that and keeping up with all of these developments a little bit later in the programme, but first, let’s start by surveying the landscape. With the average two-year fixed mortgage deal now above 6%, it’s a painful time for any borrowers having to remortgage right now, especially given that many of them will currently be on a rate lower than 2%, and there is a lot of them facing that looming prospect or having already had to go through it – an estimated 2.4 million people will see their current deals come to an end between now and the end of 2024.

Sarah Coles: Yes, and on average, this will add well over £2,000 to the typical borrower’s annual repayments, and this rapid hike in mortgage rates is in response to the expectations that the Bank of England will be forced to keep hiking the base rate to get inflation under control. So the idea is that if borrowing is more expensive it will dent consumer spending power, and if there is less demand for goods and services, it could tip the economy into reverse, but it should also mean companies will hold back on price increases, which will help bring inflation down.

Susannah Streeter: There is a chance that the changes in the mortgage market will do the Bank of England’s job for it, or at least some of it, and help bring down demand without it needing all the rate rises the market is currently expecting. Inflation could fall back much more quickly than the markets expect right now, as the fall in energy prices feed through to the inflation reading in big downwards steps later this year. We have also heard from Tesco that food inflation may have peaked, which has been a major contributor to inflation in recent months. There are also some very early signs that the heat might be coming out of pay rises, with real-time pay data indicating the rate of wage growth is beginning to slow.

Sarah Coles: However, in the interim, there’s the risk that higher mortgage rates damage a property market that’s already facing some huge challenges, so average house prices are already down £7,000 from the peak, and more downward pressure is widely expected.

Susannah Streeter: Concerns about the property market have knocked the share price of housebuilders – we’ll get more from Sophie in a moment though on that and the longer-term outlook – but right now, the buy-to-let sector looks particularly vulnerable, with landlords with smaller portfolios in particular seen as increasingly likely to sell up, given the deals available to landlords can be higher than for other customers.

Sarah Coles: Yes, and new legislation is going to make it even harder to evict tenants, which is also seen as off-putting for existing and would-be landlords. It may see further homes put on the market, so more tenants are chasing fewer rental properties, which puts pressure on rents, and the more rents are hiked, the harder it’ll be for people to save to buy a place of their own, which risks them being stuck in the rental trap.

Susannah Streeter: So it seems to be a good time to have a chat with Sophie Lund-Yates. She’s back from the US and back to browsing the property supplements and quarterly corporate reports. Sophie, you’ve chosen some housebuilders to look at in the light of all of these developments. Give us your take.

Sophie Lund-Yates: A lot of listeners will have heard of Barratt Developments, as they’re well known for their newbuild developments, but that doesn’t tell you too much about the investment case. So on that front, Barratt is seeing an increase in sales rates, but this is still below the boom from last year. Net private reservation rates was 0.65, down from 0.93 the year prior, reflecting a ‘challenging backdrop for first time buyers’, according to the group. So total forward sales as at the 23rd of April 2023 were 11,525 homes, and that represents a 29% decline on last year. Now the value of these forward sales was £3 billion, and that represents a decline of 34.4%.

Now on a similar vein, total completions in the period fell from 3,915 to 3,194, and that reflects the reduced forward order book carried into the period as well as the closure of the Help to Buy Scheme, so obviously that’s happened in that timeframe, too. Now ultimately there’s not too many surprises, even if some of those numbers sound dramatic. Whilst fewer houses are being sold, there is some good news on the top line. The Group's average selling prices are being pushed higher by an increased proportion of London completions, as well as underlying house price inflation.

But this does come with a caveat. London sales are usually lower margin than those of other regions, and if you couple that with higher selling charges plus that 9-10% build cost inflation, the group's operating margins have fallen, so as a result, there's been a pause on recruitment as well as significantly reduced land approvals as the group aims to better manage its working capital through the storm that lies ahead.

And looking beyond the current turmoil, I would say that there are some brighter spots, so on the balance sheet side there’s a net cash position of around £600 million, and that does give some breathing room. Ultimately, housebuilders are cyclical beasts; their fortunes tend to expand and contract in line with the economy. Recession fears and widespread borrowing uncertainty are likely to remain challenges for the sector. Barratt is in a resilient financial position, so we’re not looking at an existential catastrophe, in my opinion, but as ever, some ups and downs are possible.

Susannah Streeter: So what about Taylor Wimpey?

Sophie Lund-Yates: Okay, so truth be told, a lot of housebuilders are relatively similar in nature, and that means Taylor Wimpey is facing similar trends to Barratt, but there are some differences. The landbank is a particular strength for the group, who've built a robust bank of potential projects. The focus now is bringing plots on-line, so with new land spend slowing as sales rates decline, that's wise, given the cost of land is yet to reflect the less favourable outlook.

I also think it’s worth mentioning that there are some underlying tailwinds supporting the longer-term market. Brits are ideologically committed to home ownership and the country has been in a prolonged period of housing undersupply, a trend that's not likely to change anytime soon.

As a bit of context, Taylor Wimpey's net private sales rate fell from 0.7 to 0.75 over the last year – that’s per outlet, per week, number of houses being sold – and that included planned bulk deals, with cancellation rates edging marginally higher from 14% to 15%. Excluding these bulk deals, the net private sales rate was 0.66, and Taylor Wimpey CEO, Jennie Daly, said that there's been an improvement in sales rate as the spring season progressed, so it’s this time of year, spring/summer season, when house sales really kick off, traditionally.

Sarah Coles: Okay, Sophie, thanks very much. Let’s have a chat to Laura Hoy now about the ESG issues facing these housebuilders and the rest of the sector. So Laura, how do these companies fare in terms of environmental, social and governance issues?

Laura Hoy: Thanks Sarah. So these housebuilders rank relatively well in terms of how they’re managing ESG risks and opportunities, but Barratt really stands out here for a few reasons. The Group takes a long-term view when it comes to managing its workforce; they’ve got robust recruitment, development and retention programmes and they’ve also kept a focus on diversity, so that means they’ve got a wide pool of talent to choose from, and that’s a big positive given the industry’s been suffering from labour shortages.

But really the biggest risk in the sector right now lies on the environmental side, and that’s something that Barrett is doing really well. Not only has management committed to net zero by 2040, but the group’s also pledged for all of its new builds to be carbon-neutral by 2030.

Susannah Streeter: When you talk about environmental risks, Laura, within the housing sector, are you talking mainly about carbon emissions?

Laura Hoy: Yeah, so the nature of housebuilding means there are a lot of environmental issues to consider, from where and how the materials are sourced, to the biodiversity loss on new building sites. These issues are gaining traction at a regulatory level, so companies that are already thinking strategically about these risks are in a stronger position than their peers. Carbon emissions still tend to be the big headline when it comes to environmental risks, and it’s something that’ll be at the top of mind for the entire industry. Most companies in Europe have net zero plans already in place to cut down on their direct emissions, but managing the impact of their supply chains, and the buildings themselves once they’ve been sold, is a little bit trickier.

Sarah Coles: So how do you see these indirect emissions shaping the industry going forward?

Laura Hoy: Well, the management of indirect emissions is so important if a company wants to remain an industry leader down the road, and that’s especially true here in the UK where we’ve got legislation mandating lower-impact building construction coming down the pipeline. We’ve seen a big push recently as housebuilders look to swap from traditional gas boilers to lower-carbon heat pumps, and this isn’t an easy swap given that heat pumps are more expensive to install, but the UK’s Future Homes Standard is going to require that all new homes are gas-free by 2025, so that’s not far away and builders already looking for ways to install profitably at scale are going to be better off.

Now housebuilders aren’t the only ones being caught out on emissions. Landlords are facing a similar situation. New proposed legislation is going to require buy-to-let landlords to update their properties to a minimum energy performance certificate of C. Now given that less than half of England’s homes currently meet that standard, we could see this sort of mass exodus from the buy-to-let market unless more retrofitting support is provided.

Susannah Streeter: So Laura, it’s clear there’s a lot to consider. Are there any other ESG risks in the sector that investors should be watching out for?

Laura Hoy: Yeah, absolutely. We can’t forget quality and safety. Apart from the reputational risks that come with poor construction, there are financial consequences to consider as well. The tragedy at Grenfell Tower really shone a light on this urgent need to replace unsafe cladding from buildings all over the UK. The cost to do that has been estimated at somewhere around £15 billion. Now housebuilders themselves have already committed around £5 billion, but there could be more penalties ahead, given that’s only a third of the total, so builders who are conducting careful risk assessment and monitoring throughout the design lifecycle will be in a better position to avoid tragedies like this one down the line.

Susannah Streeter: So thanks, Laura – so much to think about and consider. So we’ve explored the pressure on housebuilders – let’s dig a little deeper and speak to someone who’s been building properties throughout this trickier period. Ian is still with us. Hi Ian, really great to talk to you here on the podcast. It certainly has been a pretty turbulent time, hasn’t it, of late?

Ian Hodgkinson: Yes, it has. It’s challenging beyond belief. I’ve been in this industry for 40 years and I’ve seen the high inflation of the late ’70s and early ’80s, and this is unprecedented. It’s making sure that you’ve got a diverse portfolio; working with different clients. We build a number of social houses as well as houses for sale, so we’ve got a decent spread across the whole spectrum, but it’s… given that, and on fixed contracts and supplying for housing associations as well as house sales, it’s a new arena for us, but we’re getting a way through it. But what happens in many respects is that it opens up opportunities in other areas, so what we’ve got now is the supply chain starting to be a lot more competitive than where they were last year and the year before, and of course that has had an impact on prices, so that does relieve inflationary pressures on what we’re doing. House sales-wise, they are slowing up, there’s no doubt about that, but consequently, historically, this country has never built enough houses anyway, so what will happen is that history will repeat itself. When things do finally break – and interest rates will break at some point or other – we will have a cycle where there will be another housing shortage and we’ll start to have another bit of a boom. So whatever we’re losing at this moment in time will come back in 12 to 18 months, without a shadow of a doubt.

Sarah Coles: Presumably high interest rates are already having a bit of an effect on your order book?

Ian Hodgkinson: Oh, yeah, absolutely, it holds things back, but it’s a one-cannon shot, I feel, from the Bank of England, that they’ve only got one tool in their bucket to try and deal with the interest rates. Surely, these days, the house owners and people looking to buy houses shouldn’t be open to this sort of situation? It would be good if the Bank of England or the Government could use some other tools in their bucket to try and alleviate this high inflation issue across the board. Because food goes up in supermarkets and fuel is rising, then it affects builders because interest rates have gone up, so it starts to affect the whole life of a builder because of that aspect, and I think that needs a bit more thought on doing things differently going forward.

Susannah Streeter: What’s your take on where house prices are, because they have really risen pretty dramatically over recent years, up until this point when we’re starting to see these declines?

Ian Hodgkinson: House prices last year and possibly a few months before that were just rising beyond… and people actually… I can remember my son buying a house in Nottinghamshire, probably this time last year, and he was one of 20 bidding, over-bidding, and in my lifetime, I’ve never heard of that, and that’s absolutely incredible, and builders selling houses all in one go, off-plan – gone – it was incredible. But I knew what the upshot of that was, and here we are now, and although house prices will decline – there’s no doubt about that, because of affordability and because of the rate the repayments will be per month, unless you are on a fixed, house prices will come down, inevitably, but they will come back. All it will do is create another bottleneck for the bottle of pop to go up at some time or other, when interest rates do steady off and start to come down and people have got more confidence in the economy going forward again.

Sarah Coles: And in terms of all the bad things coming at once, presumably the end of the Help To Buy Scheme coming just about now-ish, that must have added to the demand being sucked out of the process?

Ian Hodgkinson: Yeah, you’ve got a perfect storm, to be quite honest. All the ducks were lined up and then they all fell down. We could have just done with a little bit more Help To Buy, maybe extended for another 18 months for this period, just to help things through, because our sort of bread-and-butter on-site is two- and three-bed houses, starter homes, where there is the demand. Don’t get me wrong – we are still selling some houses, but not at the scale as it was before – but I do understand the further we go up north, the ripple effect, things do start to even out, but it is having an effect, the fact that the Government have reduced the Help To Buy Schemes. Whether there’s something else that they could bring in in the interim, I don’t think Stamp Duty holidays or anything like that are any much of a help, because I think the Stamp Duty holiday that we had during Covid actually stoked the fire of the house price inflation, so builders would more or less prefer steady-as-she-goes, so you can plan; you know where you’re going.

Sarah Coles: You mentioned there some of the regions were holding up better and presumably some sorts of accommodation, so where is the growth at the moment?

Ian Hodgkinson: The growth at the moment is the further we go up north, it seems to be that prices are holding up there and maybe even gaining a little bit. In the Midlands, where I’m from, it seems to be stagnation and I’m getting the feeling down south things are really starting to drop. But when things turn around again, it will probably be the south which kicks it all off, because people will be wanting to invest in London and the buy-to-lets and everything else that goes with it. People and investors have very short memories.

Susannah Streeter: And you talked as well about the fact that those 2- to 3-bed homes are your bread and butter, but what else do you have on your plate in terms of the diversified accommodation that you offer, that has helped you be a bit more resilient?

Ian Hodgkinson: What we’ve got is a contracting arm and we’ve got social housing. Where there is growth at the moment, I can tell you, is social housing, because the housing supply crisis has not gone away. The Government was looking at 300,000 houses a year just to keep up with demand. We’re unlikely to build half of that, but people need somewhere to live – fundamentally, people need somewhere to live – so if they can’t buy, they’re going to rent, and if private landlords aren’t thereabouts at the moment, they could be looking towards social housing and housing associations. We have got a contracting arm as well, to further spread the risk, where we’ll be doing contract work and bricklaying. We’ve got above 100 bricklayers that work for us. We’ve got one or two Government contracts at the moment and that seems to be quite busy, so the Government is spending money on infrastructure projects and build projects that we can get stuck into, and that is giving us income and I think the old phrase is, all our eggs are not in one basket in this instance.

Sarah Coles: I’m going to ask you the impossible question now and get your crystal ball out, but when do you see the market turning? When do you see things coming back, or is it at this stage impossible to tell?

Ian Hodgkinson: We’ll probably see… the Government and our Prime Minister keeps saying that we’ll see inflation rates drop to 5% towards the end of the year. We could get there, and interest rates could end up at 5% or 6%, yes, of course they could, so early next year I see things bottoming out and plateauing, and maybe towards the end of 2024, that is the point where we could start to see some drop in interest rates and maybe, if we get half of a percentage point in 12 to 18 months’ time, that could be the spark of people starting to buy houses again. But demand will be there; it’s pent-up; it will be like a bottle of pop and people will start to buy again, so that’s the point that we’ll come to, and if there’s no houses being built, it’ll just add to the problem. I think if builders are brave and forward-looking, now’s the time to be looking for land, to be investing in land, getting the planning permissions through, ready to go again, because fundamentally this country needs houses. I keep saying that; I keep repeating it. Land is something that’s in short supply, so it’s get a hold of the land and get planning.

Susannah Streeter: Ian, it’s been really fascinating talking to you. Great to get the view right from the ground as you’re dealing with all this turbulence, but also an eye on the future as well, so thank you very much.

Ian Hodgkinson: No problem. Thank you.

Susannah Streeter: Well, talking of new developments, before we move on, we have a favour to ask. We’d like you to get in touch.

Sarah Coles: Yes, we have a new email. It’s podcast@hl.co.uk and we’d love to hear from you.

Susannah Streeter: You can share your thoughts, feelings and any questions you have. We’d also like to know how things are going at the moment. In the aftermath of so many rate rises, how is your financial resilience holding up?

Sarah Coles: Yes, it’s the topic of our next podcast, and we’d love to hear your views. But before that, it’s time to get a fund manager’s view on what could be ahead. Emma Wall, our Head of Investment Analysis and Research, has been speaking to Andy Jones from Janus Henderson Investors.

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Emma Wall: Hi, Andy.

Andy Jones: Hi, Emma. It’s good to be speaking to you today.

Emma Wall: Thanks for coming back on the podcast. Today we’re talking about housebuilders. Now housebuilders are not banks, so let’s not draw the immediate correlation with everything that’s been going on with interest rates and having an immediate impact, but that said, they are of course intrinsically linked to the housing market which is so impacted by rising rates. As we speak now, the Bank of England base rate in the UK is at 5%. We’ve seen that has an impact on the number of houses that are being bought; the number of mortgages that are being approved. Set the scene maybe for us on how the backdrop for housebuilders are looking now, and then how you’re interpreting that to potential investment opportunities.

Andy Jones: Yes, that’s absolutely right. Whilst they’re not banks, they are clearly very cyclical businesses and very exposed to, obviously, volumes of houses that are built, house prices and of course the cost of building the houses as well, so a housing downturn sees the housebuilders’ profit fall very significantly, and that’s what we’re actually seeing at the moment. So we’ve seen house prices start to come off; volumes have been weak, as a result of which the profit expectations for housebuilders have come down a lot. Now having said that, they have already been very, very weak as share prices, so the sector already assumed a lot of pessimism, and there are actually quite a lot of reasons to think they are in better shape than they’ve been in previous downturns, so whilst it’s a difficult profit time for them of course, there are grounds to believe, with the share prices we’ve seen of late, that there may now be signs of value emerging across the sector because they are different, we would say, than they have been in previous downturns.

Emma Wall: That was a really interesting point because the market, as you say, is so efficient, it’s not, sadly, a surprise to any of us that inflation is very high, that the cost of living is very high, that interest rates are very high, and as you say, building materials have been rising steadily, first because of the pandemic and availability with global trade, and then exacerbated by Russia’s invasion of Ukraine because of the number of materials that come out of eastern Europe. But despite all these significant headwinds, you’re saying actually that’s all priced in, or the majority of it is priced in to those the share prices, and so actually, potentially the downside from here is limited.

Andy Jones: I think, in aggregate, we would say that for the sector, yes. It’s very interesting that you mention the build costs that they’ve seen, because definitely they have remained higher than the housebuilders would have expected, so it’s building materials, of course labour is a very significant input cost for them on sites, and all of these factors have stayed higher than they would have thought. So what we’ve actually seen is they’ve had to be more cautious on those costs coming down, and so these have actually stayed relatively high. So notwithstanding that, they did actually start at a very high margin level, so with prices coming down and volumes coming down and their costs being stickier than they thought, there has been quite a lot of margin contraction in the sector, but they are still a profitable sector overall. And probably one of the other biggest differences they’ve had to previous downturns is the state of their balance sheets. In the past, they’ve gone into previous downturns with quite a lot of debt. This time, the sector on average has net cash, and they also have generally five years’ worth of land as well in order to build going forward. So in previous downturns they were actually quite often forced sellers, so that they themselves could act as a driver of house prices down if they felt the need to sell enough flats or houses at a distressed rate, but the sector’s not in that position this time round. So they’re still profitable, the balance sheets are very different and we do think, long term, there does need to be a pickup in the number of houses built, so long term we think there could now be value emerging in what is discounted in share prices across the sector.

Emma Wall: Andy, why are they in such better shape, because as we’ve just been talking, the last few years have been challenged. Is it simply, again a bit like banks, lessons learned from the 2008 crisis meant that just better governance, maybe better management, have made sure that they are much more stable businesses? And again, we’re talking in aggregate here, so there will be examples where this is not the case, but is it just that case of lessons learned?

Andy Jones: I think, broadly, that’s absolutely right, and I think it’s true, as you say, more broadly for a lot of UK domestic cyclical sectors, the lessons of the great financial crisis had to be learned. It was such a difficult time. So we did see the housebuilders be a bit more cautious when they were adopting balance sheet targets and how they would fare in a downturn the next time, and it does tie in a bit to how the banks have been treating it as well. So banks have been more prudent in their lending as well, so the banks have got a very comfortable loan-to-value position on their mortgage book, so they’re not too distressed if house prices fall. They’ve got a significant buffer. So the lenders overall are in a better position, as are the builders themselves, and there are still a lot of mortgage products there as well, because obviously there has been a lot of attention, when rates have moved quickly, about products being withdrawn, but actually those tend to be very short-term phenomena these days, and it tends to be just because people are reacting to the moving rates. So actually, there are quite a lot of mortgage products still there, so overall we do think both the housebuilding industry and the banking sector in terms of how they’ve approached mortgages is just more prudent than it was last time round.

Emma Wall: Okay, so let’s look specifics. No guarantees, of course – there never is with investing – but which are your preferred plays in this sector? What have you got in the portfolio?

Andy Jones: At the moment I have two stocks in the portfolio. They are Persimmon and Taylor Wimpey. Persimmon has been particularly weak. The main reason for that is they’ve had more of an exposure to the first-time buyer market, and with the ending of Help To Buy earlier this year, that’s the segment that’s seen the biggest drop-off in demand, so they’ve probably seen a bigger decline in profit than most in the sector, but they have been very, very weak as a share price already. They’ve also chosen to change their dividend policy, which again is prudent ahead of a downturn, so they’ve now set a minimum dividend level of 60p, and we think that means there’s an awful lot discounted at the current share price, because when the market comes back, and we think it has to be because there is that shortage of houses being built in the UK, we think they’re well placed to benefit, so it’s an attractive yield and it’s now not being valued at a premium to book value any more.

The other stock we own is Taylor Wimpey, which is also at a very attractive valuation level. They’ve picked a different dividend target in that they’ve decided to pay a dividend based on their net assets and stress-test it on a downturn, so this’ll be an excellent and probably severe test of how that policy will stand up, but they’ve decided to set their dividend in relation to their net asset value, so as a result of that, that’s got a very attractive dividend yield at the moment and is currently in excess of 10%, but we think they’ll continue to pay that, and it’s also at a discount to book value and similarly, when the market comes back and becomes more favourable at some point, we do think long term, when they’re being valued at a discount to book value, there’s attractive long-term value there whilst being paid to wait with dividend yields along the way at these levels.

Emma Wall: As you say, Andy, no guarantee on that dividend, but it’s pretty compelling. Andy, thank you very much.

Andy Jones: Thank you very much, Emma.

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Sarah Coles: That was Emma Wall, our Head of Investment Analysis and Research, with Andy Jones from Janus Henderson Investors, and please bear in mind that these are the views of the fund manager and are not individual stock recommendations.

Susannah Streeter: You are listening to Switch Your Money On from Hargreaves Lansdown, and now it’s time for the Stat of the Week, and we’re going to explore the number of properties being built. So Sarah, the pandemic did upset data collection for quite a while, and the last full year we have data for is 2020, when just under 170,000 houses were built, but when do you think was the biggest year for building in the post war period? I’ll give you some options: was it 1958, 1963 or 1968?

Sarah Coles: That’s tough. I know there was a boom in the 1960s, but I don’t know whether it was the middle or the end. I don’t know. If I had to guess, I would say 1963?

Susannah Streeter: I’m afraid not. It was actually 1968, when more than 425,000 were built, so two-and-a-half times as many as in 2020, but as you heard from Ian, he’s expecting still to be pretty busy in the years to come, just because we’ve got such a shortfall of homes right now.

That is all from us for this time, but before we go, we do need to remind you that this was recorded on the 26th of June 2023 and all information was correct at the time of recording.

Sarah Coles: Nothing in this podcast is personal advice. You should seek advice if you’re not sure what’s right for you. Unlike the security offered by cash, investments rise and fall in value, so you could get back less than you invest.

Susannah Streeter: Yes, this is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.

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Sarah Coles: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research, and is considered a marketing communication.

Susannah Streeter: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place, including dealing restrictions, physical and information barriers, to manage potential conflicts of interest presented by such dealing.

Sarah Coles: You can see our full non-independent research disclosure on our website for more information. So all that’s left is for me to thank our guests, Ian, Sophie, Laura, Emma, Andy and our producer, Elizabeth Hotson.

Susannah Streeter: Thanks so much for listening. We’ll be back again soon. Goodbye.

Sarah Coles: And do remember to e-mail us.