Comment

Mortgage approvals surged to 65,647 transactions in September, the highest level since August 2022 and a remarkable 49% increase compared to the same time last year. This marks the fourth consecutive month of growth, reflecting renewed optimism in the housing market.

The Bank of England’s recent base rate reduction to 4.75% has further boosted sentiment. Whilst this news has eased financial pressure for 640,000 tracker mortgage holders and 770,000 on standard variable rates, the cut is yet to benefit those on fixed-rate mortgages, due to swap rates, which influence fixed mortgage pricing. Swap rates account for lenders’ long-term funding costs and have been influenced by inflationary expectations and recent budgetary announcements. However, if inflation trends downward and financial conditions stabilise, it is anticipated that fixed-rate mortgages may begin to reflect the base rate cuts more closely.

For those considering selling, now is an excellent time to list your property. By getting onto the market ahead of the Boxing Day rush, you can avoid competing with a wave of new listings and position yourself to take advantage of motivated buyers. Additionally, with stamp duty rates set to increase in April, acting now ensures you’re well-placed to complete a sale before the changes take effect.

Take the opportunity to get ahead of the market and make the most of the strong momentum as we head into the festive season. Listing early could position you as a power buyer and secure your next move with confidence.

Sources: Bank of England, Rightmove, Dataloft by PriceHubble, ONS, UK HPI, Zoopla, Halifax

Local Market Roundup

 

The latest Land Registry data for the year ending August 31st, 2024, shows 3,077 property transactions across the WR postcode area, a 31% decrease compared to the previous year. Worcester recorded 1,371 transactions, reflecting a 30% decline, Malvern had 459 transactions, down by 28%, and Droitwich saw 358 transactions, a decrease of 34%.

Over the past year in the WR postcode area, the average sale price for properties stood at £290,639. Houses, which made up 88% of sales, averaged £317,980, while flats, representing 12% of transactions, had an average price of £150,509. Malvern recorded an average transaction value of £312,362, a 2% decrease, Droitwich saw a slight 1% rise to £288,980, and Worcester’s average dipped by 1% to £261,972.

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

Over the past year, the average rent for properties in Worcestershire rose to £879 per month, reflecting a 6% increase from the previous year. Flats, which make up 42% of the rental market, averaged £728 per month, while houses, making up 58%, commanded a higher average rent of £1,027 per month.

In Droitwich, the average rent rose by 6% over the past year to £818 per month, with flats averaging £645 and houses £1,117. Malvern experienced a 7% increase, bringing the average rent to £867 per month, with flats at £788 and houses at £904. Similarly, Worcester’s average rent climbed by 7% to £868 per month.

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

For the year ending September 30th, the average UK property price rose to £291,828, reflecting a 2.9% year-on-year increase. Property transactions climbed to 91,820 in September 2024, an 8.9% rise compared to the same month in 2023 (HMRC). Sales agreed were up 26% year-on-year (Rightmove), and buyer enquiries in October were 12% higher, marking the fourth consecutive positive report (RICS). RICS Survey feedback suggests confidence remains strong, with many anticipating further house price growth over the next three months, signalling continued stability in the housing market.

Economy

The big news was the Bank of England’s decision on November 7th to cut the base rate by 0.25% to 4.75% which reflects a shift toward economic stability, although this change has yet to influence fixed mortgage rates due to the prevailing swap rate environment. Inflation (CPI) ticked up slightly to 2.3% in October from September’s 1.7%, but it remains a relief compared to the 11.1% peak  24 months ago, helping ease household budgets.

In the Autumn Statement, Stamp Duty Land Tax (SDLT) changes introduced a higher surcharge for landlords with an additional 2%. It will now cost 5% for properties up to £250,000, 10% between £250,000 and £925,000, and 15% above £925,000. This came into effect from 31^st October 2024. Additionally, from April 2025, the residential SDLT threshold will return to its pre-2022 level, starting at £125,000. These measures are designed to address housing affordability while generating revenue for government priorities.

With such shifts, it is crucial to stay informed. Our team is here to guide you through these changes and their potential implications on your property plans.

Lettings Market

In August, the average UK rent fell slightly by 0.3% in October to £1,327, though it remains 3.4% higher than the same time last year (HomeLet). It is expected that rental growth will start to settle. The average void period increased in September from 15 days to 19 days (Goodlord).

The rental market continues to face challenges, with demand outpacing supply. Currently, there are 25% fewer rental properties available compared to 2019, and this imbalance is expected to persist into 2025.

Whilst we await further clarity on the recently announced Renters’ Rights Bill, it’s clear that significant changes are on the horizon. These include a shift to rolling periodic tenancies, revised notice periods, and stricter regulations on rent increases. Although the bill still requires further review and amendments before becoming law, it represents a pivotal step in shaping the future of the rental market.

If you’re a landlord with questions, our experienced lettings manager, James, is here to offer valuable insights and support. James has also recently released his book, Home, a comprehensive guide for current landlords and those looking to invest in property. You can purchase a copy, available in both paperback and Kindle, by clicking here.  

Market Insight

 

This market update draws from a range of trusted sources to provide you with clear, evidence-based insights to guide your property decisions. Our team is committed to staying updated on latest market trends and legislative changes, ensuring you have the most current and relevant information.

With ongoing shifts in market conditions, mortgage changes, the October budget and upcoming changes like the Renters Rights Bill, we are here to help you navigate these developments with confidence. We also offer expert advice through our network of mortgage advisors to assess the feasibility of moving or re-mortgaging, tailored to your unique needs and to support you in making those important decisions. For more information, click here. 

Feel free to reach out to us anytime. We’re here to assist you in making informed property decisions and navigating your property journey. For the latest updates and insights, connect with us directly through our website or follow us on social media.