Comment

Falling mortgage rates are helping boost sales levels. There were 332,200 sales agreed across the UK in Q3 2024, 23% above the same period last year. While 2023 was a low base to compare with, Q3 2024 sales were also 7% ahead of the same quarter in 2019 which is a stronger year for comparison purposes. Average two- and five-year fixed mortgage rates fell to 5.0% and 4.5% respectively during September meaning rates are now at their lowest level since the spring of last year.

Average UK property prices have risen over the summer, following a slowdown in spring, with Nationwide reporting a 2.4% rise in the year to August. While cost-of-living pressures are easing and mortgage rates are reducing, confidence will be key to the market outlook. More clarity around the impact on households following this year’s budget on 30th October will dictate whether the housing market accelerates further. At the time of writing, fears over tax rises on capital gains and the impending VAT on private school fees are holding back optimism in consumer confidence amongst higher taxpayers.

Current market conditions remain favourable for both buyers and sellers. With growing anticipation of further good news from the Bank of England on interest rates from their November meeting, competition for properties can be expected to intensify, therefore now is an ideal time for those considering a move to take advantage of these opportunities.

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 31^st July, 2024, reports 3,095 property transactions across the WR postcode area, a decrease of 31% compared to the previous year. In Worcester, the number of transactions dropped by 30%, totalling 1,369. Malvern experienced a lower decline of 28%, with 468 transactions recorded, while Droitwich saw a decrease of 33%, bringing its total to 358 transactions.

 

In the WR postcode area, the average sale price for both houses and flats over the past year was £288,936. Houses, accounting for 88% of sales, had an average price of £316,362, while flats, making up 12% of transactions, sold for an average of £150,527. Malvern saw its average transaction value dip by 3% to £318,281, Droitwich experienced a similar 2% decrease to £283,802, and Worcester’s average also dropped by 2% to £258,673.

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

Over the past 12 months, the average rent for let properties in the Worcestershire area reached £872 per month, marking a 5% increase compared to the previous year. Flats, which made up 41% of the rental market, had an average rent of £723 per month, while houses, accounting for 59%, averaged £1,016 per month.

In Droitwich, the average rent was £810 per month, with flats renting for £656 and houses for £1,123. Malvern saw an average rent of £896 per month, with flats at £788 and houses at £945. Meanwhile, Worcester’s average rent increased to £863 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 August 31st, the average price of property rose by 2.8% year-on-year, reaching £292,924. According to HMRC, August 2024 saw 90,210 property transactions, marking a 5.4% rise compared to August 2023. This increase in transactions and property prices highlights a continued recovery in the market, driven by a mix of increased buyer activity and a competitive market environment.

Economy

The Bank of England held interest rates at 5% in September, with an expectation that they may be cut in November. CPI inflation was reported at 1.7% in the 12 months to September, down from 2.2% in August (ONS).

At the time of writing we await the Autumn Budget on the 30^th October which will be held by Rachel Reeves. Although Labour had promised no additional tax rises, it is thought the budget may introduce a mix of tax increases, particularly affecting wealthier buyers and property investors, while offering some relief to first-time buyers.

The specifics remain unclear, but we will provide updates next month in our market update and social channels, as more information becomes available

Lettings Market

In August, the average UK rent rose to £1,331 reflecting a 4.3% increase compared to the same period last year (HomeLet). The average void period held steady 15 days, up from 11 days in July.

The rental market remains buoyant due to high demand and limited supply, with 25% fewer rental properties available in 2024 compared to 2019. This supply-demand imbalance is expected to drive rents up throughout 2024, with similar trends likely to persist into 2025.

As of September 2024, the government has introduced a new piece of legislation called the Renters’ Rights Bill. While it still needs to clear a few hurdles and undergo amendments before becoming law, the bill marks a significant step forward. Interestingly, it mirrors much of the Renters’ Reform Bill, proposed by the Conservative Party the year before, though with notable changes.

If you’re a landlord with questions, our experienced lettings manager, James, is here to offer valuable insights and support. In addition on Thursday 7^th November Nicol & Co are hosting a free Landlords Seminar at Claines Lane near Worcester. If you would like to attend please call the team on 01905 675999 or click here.

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.