Comment

The housing market has remained resilient this month, unaffected by the General Election campaign, ongoing sporting events, and the initial summer holiday period. The number of sales agreed has risen by 15% year-on-year, and new seller numbers continue to exceed last year’s figures by 3%.

The first half of 2024 has been positive, with market conditions resembling those of the pre-COVID era, despite uncertainties surrounding Brexit and the general election. While supply and demand levels are healthy, the limited availability of mid-market homes priced around £300-400k has constrained options for range. Nevertheless, valuations and new instructions remain strong.

With CPI inflation decreasing to (and remaining at) 2% and anticipated base rate reductions, the market outlook is promising. Nationally, house prices have risen by 5.1% since December 2023, and listings are up 7.5% year-to-date, reflecting the market’s resilience and underlying confidence. The new government’s focus on maintaining low taxes, controlling inflation, and improving the planning system—highlighted by new Chancellor Rachel Reeves, a former Bank of England Economist—bodes well for a stable and healthy autumn market.

Back in May 2024, there were 59,991 mortgage approvals, reflecting a significant 19% increase compared to the same month last year, according to the Bank of England. This follows a notable 28% rise in approvals over the first five months of the year. The number of new sellers has shown a steady 3% increase from last year, as reported by Rightmove.

Local Market Roundup

According to the most recent Land Registry statistics for the year ending April 30th, 2024, there were a total of 2,931 transactions recorded, marking a 36% decrease from the previous year. In Worcester, the number of transactions fell by 39% to 1,251. Malvern reported 458 transactions, which is a 33% reduction, while Droitwich saw a 36% decline, bringing the total to 344 transactions.

In the WR Postcode area, the average sales price over the past year, for both houses and flats, stood at £291,898. Houses, which made up 87% of sales, had an average price of £322,097. Flats, accounting for 13% of transactions, averaged £152,687. Breaking it down by region, Malvern’s average transaction value remained steady at £318,228. In contrast, Droitwich saw a slight 1% increase, bringing the average to £287,216. Worcester experienced a 2% decline, with the average transaction value dropping to £256,933.

The increase in average sales price over the last five years is shown below:

Over the past 12 months, our Worcestershire area recorded an average rent of £862 per month for let properties, marking a 5% increase from the previous year. Within this area, 41% of the rental properties were flats, with an average rent of £716 per month, while houses commanded an average rent of £1,014 per month.

In Droitwich, the average rent for let properties was £785 per month, with flats averaging £625 and houses at £1,061. Malvern’s rental market saw an average rent of £920 per month, with flats at £874 and houses at £951. Worcester’s average rent remained stable at £846 per month.

National Market

HMRC reported that 91,290 property sales took place in May 2024, representing a significant 17% increase compared to the same month in the previous year. This surge in sales indicates a robust market recovery. Additionally, the number of sales being agreed is now 15% higher than during the same period last year, a time when mortgage rates were nearing their peak, according to data from Rightmove.

In May, the average property price rose to £285,201, marking a 2.2% year-on-year increase. This is the strongest growth observed since March 2023, as reported by the Office for National Statistics (ONS). This rise in property prices suggests continued confidence in the housing market despite previous fluctuations in mortgage rates.

Economy

It was announced on 17th July that CPI inflation in the twelve months to June 2024 remained the same as the previous month at 2.0%. This positive result lead to more hope of a base rate reduction in August 2024. This is twelve months on from when the base rate reached 5.25% August 2023.

According to the Office for National Statistics (ONS) monthly GDP is estimated to have grown by 0.4% in May, after showing no growth in April 2024.

With Labour winning the election we will all be interested to see how they can drive economic growth as set out in their manifesto. We’ll keep you up to date with their plans and the impact.

Lettings Market

The ONS Price Index of Private Rents reported that in the twelve months leading up to June 2024, UK private rents increased by 8.6%. This significant rise highlights the growing demand and tightening supply in the rental market.

During the same period, HomeLet reported that the average UK rent experienced a modest increase of 0.2%, reaching £1,299 per month. This figure is 5.7% higher compared to the same time last year, further illustrating the upward pressure on rental prices across the country.

It was reported that the average void period in June was 17 days, a significant reduction from May’s reported period of 21 days, according to Goodlord. This decrease suggests that the earlier reports in May, which indicated an easing in demand- supply, could have been an abnormal or seasonal dip.

At our offices in Malvern, Droitwich, and Worcester, we continue to observe huge demand. Our results for June showed that for every listing, we received an average of 50 enquiries. Our experienced lettings team can provide expert guidance and advice to support you if you’re considering property investment. Reach out to our team with any questions you may have.

Market Insight

This market update draws on a variety of trusted sources to provide you with clear, evidence-based insights to support your property decisions. Our team is committed to staying up-to-date with the latest developments in the property market and is always available to address any questions or concerns you may have. We aim to equip you with accurate information to help you make informed choices.

Additionally, we offer expert guidance through a network of mortgage advisors who can assist you in assessing the feasibility of moving or re-mortgaging. Don’t hesitate to reach out to us at any time; we’re here to help you navigate your property journey with confidence.

I’m also always enthusiastic about sharing insights as we navigate this dynamic market. If you have any questions, please feel free to contact me directly through our website or connect with us on our social media channels, where you’ll discover valuable market updates and information.