Droitwich, Worcester & Malvern Market Update – April 2024
COMMENT
At the recent Bank of England March meeting, the base rate remained steady at 5.25%. Nevertheless, the governor hinted at potential interest rate cuts, aligning with forecasts projecting a bank rate of 4.4% by Q4 2024. This forecast suggests a possible favourable shift in monetary policy, which could further stimulate market activity.
In January there were 82,000 property sales, marking a 1.9% increase from the previous month (HMRC). However, this figure reflects a decline of 11.9% compared to the same period last year. Despite this, there’s encouraging news as the number of sales being agreed has risen by 13% from this time last year, according to Rightmove. This suggests positive momentum in the market, indicating a potential upward trend.
Historically, spring has been the peak season for home sales, with 27% occurring during this period over the past five years (excluding 2020 due to Covid). As the season unfolds, with flowers blooming and gardens rejuvenating, buyer demand tends to surge. With current demand levels 7% higher than last year, now presents an opportune moment to bring your property to the market. Sources: #Dataloft, HMRC, Rightmove (Spring defined as March, April, May).
n the initial six weeks of 2024, the number of sales agreed has surged by 16% compared to the same period last year and 3% higher than in 2019 (Rightmove). The average property price experienced a robust 0.7% increase in January, marking the most substantial growth in a year, as reported by Nationwide.
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 31st December 2023, reveal that there were 39.5% fewer sales across the WR postcode area. The actual number of transactions being 2897. In Worcester and Malvern, sales were down 39% at 1,276 and 456 respectively. The figure in Droitwich of 349 was down by 34%.
Over the last 12 months, 15% of the sales across the wider area were flats, at an average price of £153,199, while houses averaged £315,240 leading to an overall average of £284,308. Average sale prices vary across the county. Malvern’s overall average transaction value was £305,794 and, although down by 3%, remains highest. Droitwich at £279,629, which is up by 1% and in Worcester, the average price remained the same at £254,151.
The increase in average sales price over the last five years is shown below:
Across the WR postcode area, the average rent for homes let over the last 12 months increased by 7% to £866. 41% of the properties let were flats, achieving an average of £713pcm, while houses achieved an average of £991 per month. The average rent for properties let in Droitwich was £775, with flats here averaging £611 and houses £962. In Malvern, the average rent on homes let in the last 12 months was £887, flats, achieving an average of £808 per month, while houses achieved £969 per month. Worcester’s figure remains just below the average at £845.
Source: Dataloft Market Rental Analysis (rental data is limited and based on achieved rents for approximately 10-15% market share, depending on location)
NATIONAL MARKET
Following the turning point at the end of 2023, figures reported by HMRC confirm the market continued to surge in January which saw a total of 82,000 property sales, indicating a 1.9% increase from the previous month, down 11.9% compared to the same period last year. The average price for a property in January stood at £281,913, reflecting a slight decline of -0.6% year-on-year, yet showing a modest increase of 0.5% compared to the previous month (ONS).
February brought a positive shift as the average property price rose by 1.2% year-on-year, marking the first positive annual growth since January 2023, according to Nationwide.
Furthermore, average new seller asking prices continued their upward trend for the third consecutive month, reaching £368,118 in March. This represents a monthly rise of 1.5%, surpassing the historic average March increase of 1%, as reported by Rightmove.
ECONOMY
The Bank of England has opted to maintain UK interest rates at 5.25%, with the next decision scheduled to take place in May.
According to the Office for National Statistics (ONS), monthly GDP experienced estimated growth of 0.2% in January 2024, rebounding from a slight decline of 0.1% in December 2023.
Meanwhile, CPI inflation registered at 3.4% for the 12 months leading up to February 2024, showing a slight decrease from the 4.0% recorded in January, as reported by the ONS.
LETTINGS MARK
Annual growth in rental prices in the UK surged to 9.0% in February, showing an increase from 8.5% in January, as reported by the Office for National Statistics (ONS), Price Index of Private Rents. This pushes the average UK rent to £1,262, following a 0.2% rise in February, marking a significant 7.4% increase compared to the same period last year. (HomeLet)
However, rental demand has experienced a notable decline of -20% year-on-year, attributed to the easing of one-off pandemic factors and a cooling labour market. (Hometrack)
MARKET INSIGHTS
In response to regular feedback we receive regarding the value of our Market Updates, we’ve decided to publish more regular market insights online. Having emerged from an unprecedented period of activity at the same time as having to cope with equally unusual economic pressures, there is now a greater measure of political uncertainty with an election on the horizon giving the media plenty to talk about.
Amid this turbulence, we believe it’s important for you to hear clear, evidence-based information to help you navigate the current market and make the right choices.
I’m always eager to share insights as we navigate the ever-evolving market. If you have any questions, feel free to reach out to me directly through our website or by following us on our social media channels. I’m here to offer support and guidance.
