Worcester & Droitwich Market Update – May 2019
LOCAL MARKET ROUNDUP
There were 101,780 residential transactions recorded (on a seasonally adjusted basis) in February across the UK, according to the HMRC. This was the highest level since August 2017.
This figure is still provisional, but if confirmed will mean that the annual change in transaction levels has moved into positive territory for the first time in over a year.
This may be surprising to some given the uncertainty caused by Brexit with much speculation about a market slowdown, but here in Worcestershire, and regionally across the West Midlands, we have seen good levels of activity and average values holding firm.
Although buyers are likely to be cautious, pent-up demand is building and some, who may have been waiting for clarity are prepared to commit. The confirmed Brexit delay may actually provide a window of activity during the traditionally busiest time of the year as reported last month.
If you’re contemplating a move please don’t hesitate to get in touch we shall be only too happy to offer your our advice.
NATIONAL MARKET
Average house price growth slowed to 0.6% in the year to February, down from 4.4% a year ago. Prices are still rising though in some regions, most notably in the North West and West Midlands.The OBR has revised down their expectations for house price growth in 2019. They now anticipate a 0.3% fall in 2019. By 2021, they expect prices to be rising again by 4%.
Annual property price growth in all of the UK’s top 20 cities was in positive territory in January, for the first time since August 2015 according to Hometrack. Price growth is expected to moderate to levels closer to wage growth across many regional cities during 2019.
ECONOMY
Inflation remained unchanged at 1.9% in March, with rises in petrol and clothing costs offset by a fall in the cost of food. Meanwhile, average wages continue to rise more strongly than inflation, good news for household finances.
The UK economy grew at a faster rate than expected in the three months to February, registering growth of 0.3% according to the ONS. Month on month the economy grew by 0.2%, whereas economists who had expected it to remain static.
UK employment is at its highest level since 1971. The ONS report 32.7 million people aged 16-64 were in employment in the three months to the end of January. Unemployment fell to below 4% for the first time since 1975, and is well below the EU average of 6.5%.
LETTINGS MARKET
Average rents paid by UK private tenants grew by 1.2% in the year to March, a slight pick up in the annual rate of growth recorded in February. Rental growth is currently strongest in the East Midlands followed by Yorkshire and the Humber.
England’s new Client Money Protection (CMP) legislation became law on April 1st. It requires all letting agents in England to be members of one of six approved CMP schemes. Agents must also hold client money in a separate bank account, have appropriate indemnity insurance and establish money handling procedures.
The Government have published their official guidance governing the new Tenant Fee Bill. From June 1st the only payments that can be charged in connection with a tenancy are: rent, a refundable deposit (capped at 5 weeks rent for properties let for less than £50,000pa), payments to change the tenancy (capped at £50), payments relating to early termination at the request of the tenant, payments with regard to utilities, TV licence, Council Tax and a default fee for late payment or loss of key/security device.
As a Landlord, it’s wise not to underestimate the severity of charging a Prohibited Payment as each breach of the ban can result in severe financial penalties. The Act is going to be one of the biggest shake-ups to the letting industry in recent years and bring some changes to existing tenancies that you need to be aware of. If you would like a review of your portfolio, in light of the changes, pop in for a coffee to see how we can assist.