Comment

March saw a notable increase in mortgage approvals, reaching 61,325, according to data from the Bank of England. This figure represents the highest level since September 2022 and reflects a 1.4% increase from the previous month. Although the base rate remained at 5.25%, the market certainly has a spring in its step.

These positive trends are underscored by Rightmove’s latest stats with a 12% increase in the number of new sellers compared to the same time last year.

With a snap general election being called for July, what could that mean for the housing market? You might be wondering if you should wait to see if house prices go up. According to a recent examination by Dataloft, the average price growth in the three months leading up to an election was 2.2%, while the three months following an election saw a similar growth rate of 2.1%. In fact, price growth in the months after an election only outperformed the preceding period in two out of the last six elections (2015 and 2019).

Waiting until after the election to put your property on the market in the hope of achieving a higher price could be a risky strategy. With spring underway and market activity bouncing back, now is a great time to sell. Source: #Dataloft by PriceHubble, UK HPI December 2023, for elections 2001, 2005, 2010, 2015, 2017, 2019

Local Market Roundup

Updates from the latest Land Registry statistics for year ending 29^th February 2024 show the total number of transactions were 3,022, 36% fewer than the previous year. In Worcester, there were 1,319 transactions, reflecting a 36% decrease. Malvern experienced 483 transactions, down by 32%, while Droitwich had 350 transactions, down by 36%.

Over the past 12 months, the WR Postcode area saw an average sales price of £289,052, including both houses and flats. Of these sales, 86% were houses, with an average price of £321,576, while flats, making up 14% of the transactions, achieved an average price of £148,323.

Across the county, Malvern leads with no change over the past 12 months, maintaining an average transaction value of £315,367. Droitwich also held steady, with an average of £280,275. Although Worcester saw a 3% decrease, it still maintains a respectable average of £256,551.

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

Source: Dataloft Land Registry

Over the 12 months, the Worcestershire area saw an average rent of £853 per month for let properties, reflecting an 8% increase from the previous year. Of these properties, 42% were flats, averaging £716 per month, while houses rented for an average of £1,007 per month.

In Droitwich, the average rent for let properties was £766 per month, with flats averaging £614 and houses £1,029. Malvern saw an average rent of £892 for let properties, with flats fetching £834 per month and houses £961 per month. Meanwhile, Worcester’s average rent remained just below the area average at £838 per month.

Over the past year, the WR postcode area saw an average rent of £845 per month for homes let, marking a +7% increase from the previous year. Among these properties, 42% were flats, with an average rental value of £710 per month, while houses fetched an average of £997 per month. In Droitwich, the average rent for let properties was £753 per month, with flats averaging £618 and houses £999. Malvern saw an average rent of £885 for homes let, with flats fetching £818 per month and houses £961 per month. Meanwhile, Worcester’s average rent stood just below the area average at £825 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

In March, HMRC reported 84,200 transactions. Although this figure represents a 6.5% decrease compared to the previous year, it remains the highest level recorded since September 2023. (HMRC)

The average asking price of property coming to the market rose by 0.8% in May to a new high of £375,131, with the strongest growth remaining in the top-of-the-ladder segment.

It was also noted that the number of sales agreed in the first four months of the year is 17% higher than last year. (Rightmove)

This is backed up by the agreed sales metric in the latest RICS’ survey which improved slightly to +5% in April compared to -5% in the previous month and marks the most positive reading since early 2021.

Economy

At the Monetary Policy Committee meeting on May 9th, the Bank of England confirmed that the UK base rate will remain at 5.25%. Whilst many were hoping for a reduction there has been positive economic news & interest rates are still anticipated to fall this year. Financial markets had speculated that the base rate might be lowered at the upcoming meeting on June 20th, given the reduction in CPI inflation. However, with the announcement of a snap general election scheduled for two weeks after the June meeting, it is now highly unlikely that we will see a change in the base rate before the August meeting.

CPI Inflation fell to 2.3% in the 12 months up to April, down from 3.2% in March 2024. Although this is still slightly higher than the Government and Bank of England’s target of 2%, it is a positive step in the right direction.

The Office for National Statistics (ONS) reported that GDP is estimated to have grown by 0.4% in March, following a 0.2% growth in February 2024.

Lettings Market

According to the Office for National Statistics (ONS) Price Index of Private Rents, average private rents surged by 9.2% in the 12 months to March, up from 9.0% in February. This trend is mirrored in the latest figures from HomeLet, which reveal that the average UK rent increased by 1.6% in April to reach £1,294, marking a 7.9% rise compared to the same period last

year.

This heightened demand is evident in the experiences of letting agents, who are now receiving a national average of 13 tenant enquiries for every available rental property. This is nearly triple the average of 5 enquiries per property reported in March 2019, according to Rightmove. At Nicol & Co, we are seeing even higher demand, with around 23 enquiries for every rental property we list in Malvern, Droitwich, and Worcester. This increased competition for rental homes underscores the growing pressure on the UK’s rental market. If you are thinking of investing in property, get in touch with our team who would be happy to guide and advise you.

Market Insights

Whilst the market has seen a positive shift in the start of 2024, we understand that with the ever changing housing market, the continual economic pressures and the undoubtable changes in the political scope, the media will have plenty to talk about. This year is going to be ‘noisy’.

In providing you with this market update, we hope you can make clear, evidence based decisions to help support you in your property journey. Our team are always on hand to discuss the current property market, providing accurate information to empower your decisions.

I’m always eager to share insights as we navigate the ever-evolving market. If you have any questions for me directly, feel free to reach out through our website or by following us on our social media channels, which also contain useful market updates and information.