Droitwich, Worcester & Malvern Market Update – February 2024
COMMENT
The cautious optimism we reported at the turn of the year continues as we track activity levels and the money markets. The big mortgage lenders are in fierce competition and slashing rates. The average five-year fix is now 5.55%, down from its peak of 6.37% in August, while the two-year stands at 5.93%, down from 6.86% in July.
Santander and HSBC are the latest to join the sub 4% club for a five-year fix, whilst Barclays have unveiled two-year deals within touching distance of the 4% threshold. Product choice also rose for the sixth month in a row, reaching 5,899 options, a 15-year high.
In an ever changing mortgage market, now is definitely the time to be speaking to an advisor who has access to the whole market.
The average shelf life of a product has lengthened to 21 days, the highest level since June, and whilst this indicates increasing stability in the market, even the top professionals really have to stay on the ball to keep up with the best deals on offer. If you are considering a purchase or coming to the end of an existing fixed rate deal, scan the QR Code above and we can introduce you to people we trust to give you that advice.
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 31st October 2023, reveal that there were 34% fewer sales across the WR postcode area. The actual number of transactions was 3125. In Worcester sales were down 33% at 1391, down 35% in Droitwich at 364, and in Malvern down by 36% at 471.
Over the last 12 months, 15% of the sales across the wider area have been flats at an average price of £149,868, while houses have averaged £314,271 resulting in an overall average of £282,163. Average prices vary across the county but Malvern’s overall average transaction value although down by 1% remains highest at £308,789. Droitwich is next at £282,290 up by 2%. In Worcester, where 44.5% of the sales were recorded, the overall average price increased by 1% to £250,311.
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 9% to £848. 38% of the properties let were flats, achieving an average of £700, while houses achieved £987 per month. The average rent for properties let in Droitwich is £752, 11.3% lower with flats here averaging £615 and houses £950. In Malvern, the average rent on homes let in the last 12 months was £881, 46% of properties were flats, achieving an average of £760 per month, while houses achieved £1001 per month. Worcester’s figure remains just below the average at £818.
NATIONAL MARKET
If you look across the average of published forecasts, which includes the pessimists who have proved to be less accurate than others, house prices nationally are expected to soften marginally from their peak, seen at the beginning of last year, when the market was buoyed by Government incentives. Unless a new wave of pre-election incentives are announced this year renewed price growth is expected to be more evident in 2025, with prices forecast to rise by 3.0%.
While perhaps not sufficient to drive strong price growth in 2024, activity levels are expected to pick up with tentative improvements in affordability and more certainty over the direction of interest rates.
The average price for a property in November was £284,950, down -2.1% year-on-year, and -0.8% on the previous month (ONS).
The HMRC reported that 80,780 sales took place in November, -1.2% down on the previous month and significantly down on last year’s levels (-21.5%).
Average new seller asking prices grew by 1.3% month-on-month to £359,748, the biggest December to January increase since 2020 (Rightmove).
ECONOMY
Monthly GDP is estimated to have grown by 0.3% in November 2023, following a fall of 0.3% in October (ONS). Wage growth eased to 6.6% in the three months to November, from 7.3% a month earlier, but still remains well above the rate of inflation (ONS). CPI inflation rose to 4.0% in the 12 months to December 2023, which is only marginally up from 3.9% in November, and the first time the rate has increased since February 2023 (ONS).
LETTINGS MARKET
Annual growth in rental prices in the UK remained at 6.2% in December, the same as in November and the strongest since records began. The Index of Private Rented Housing Prices reports on both new lets and renewals.
The average void period in December was 20 days, the same as in December 2022 (Goodlord). Rental price inflation is forecast to ease back to +5% through 2024, as tenant demand reduces against continued cost of living pressures (Zoopla).
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.
