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We always have a lag in the data but can now see that December closed out the year with a strong uplift in transactions, reaching 96,330. This marked an 18.7% increase compared to the previous year, and brought with it a positive start to 2025. So far this year, the number of sales being agreed is up by 11%, and in the latest RICS survey, sales activity is expected to rise as the confidence in the market remains strong.

On the demand side, mortgage approvals surged by 28% year-on-year, with 66,526 recorded in December. Buyer interest has risen, with homebuyer demand up 13% compared to the same period last year.

Following the announcement in February, that the Bank of England would reduce the Base Rate to 4.5%, combined with the stability of swap rates; mortgage rates have continued to improve amongst lenders. At the time of writing, HSBC, Santander and Barclays are now offering rates below 4%, whilst Nationwide has also made significant reductions of up to 0.35%. Swap rates are still falling, now standing at 3.998% for two-year money and 3.909% for five-year money. With this positive momentum, competition between lenders is expected to continue.

In April, we will see the return of the pre-2022 Stamp Duty Land Tax threshold, meaning buyers purchasing above £250,000 will face an additional £2,500 on their bill if they don’t complete before the deadline. With no sign of a government reversal, this change will impact anyone moving up or down the property ladder. If your purchase isn’t set to complete by the end of March, it’s important to factor this increase into your budget.

As we settle into 2025, the market remains positively strong, driven by improved affordability, a rise in market activity, and competitive mortgage rates. If you’re thinking about making a move this year, now is an excellent time to start planning.

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 October 31st, 2024, reports 3,351 property transactions across the WR postcode area, reflecting a 20% decline compared to the previous year. Worcester recorded 1,486 transactions, down 20%, while Malvern saw 495 sales, a 16% decrease. In Droitwich, transactions fell by 20% to 381.

Over the same period, the average sale price across the WR postcode area edged up by 1% to £291,645. Houses, representing 89% of sales, averaged £316,832, while flats, making up 11%, sold for an average of £151,574. Malvern’s average price rose by 2% to £307,924, Droitwich saw a 2% increase to £286,520, and Worcester’s average remained steady at £260,679.

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

Source: Dataloft, Land Registry

Over the past year, the average rent for properties in Worcestershire increased to £902 per month, reflecting a 7% rise compared to the previous 12 months. Flats, which accounted for 41% of the rental market, averaged £742 per month, while houses, making up 59%, achieved an average of £1,046 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 October 31st, 2024, the average UK property price reached £268,087, marking a 4.6% increase compared to the previous year. Meanwhile, the average asking price for properties coming to market edged up by 0.5% to £367,994. This follows a strong start to the year, with January recording the largest early-year price jump since 2020, signalling renewed confidence in the market.

 

Economy

In economic news, the Bank of England cut the Base Rate from 4.75% to 4.5% last month, the lowest level since June 2023. CPI inflation rose to 3% in the 12 months to January 2025, up from 2.5% in December. Meanwhile, monthly GDP grew by 0.4% in December, following a modest 0.1% increase in November.

With April approaching, a reminder that the residential SDLT threshold will revert to its pre-2022 £125,000 threshold. If you’re considering a move, our team is here to guide you through the changes with confidence.

Lettings Market

The average UK rent in January was £1,271, marking a 1% decrease from December and 0.9% % higher year-on-year. Hometrack have reported that Rents for new lets are forecast to increase by 4% over the course of 2025. Void periods increased in January to 24 days, up from the 21 days reported in December.

As you may already know, the Government is progressing with the Renters’ Rights Bill, which will bring key reforms to the private rented sector. Proposed changes include the removal of Section 21 “no-fault” evictions, the introduction of a Private Rented Sector Ombudsman for dispute resolution, and stricter property condition requirements under the Decent Homes Standard.

Changes to Minimum Energy Efficiency Standards (MEES) are also under consultation, proposing an EPC rating of C for all rentals by 2030, a £15,000 cost cap for upgrades, and fines of up to £30,000 for non-compliance. While these may bring added costs, energy-efficient homes attract quality tenants and stronger yields.

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.

If you’re thinking of making a move, this update offers valuable insights to help guide your decision-making. Our expert mortgage advisors are on hand to provide personalised advice, helping you determine whether moving or remortgaging is the best option for you. We’re here to ensure you make informed choices for a seamless transition in the year ahead. 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 additional insights, follow us on social media, where we share regular updates, including our weekly Mortgage Watch, available on the Nicol & Co Instagram page @nicolandco_estateagents or through @Matt_the_Agent.