Comment

Mortgage approvals surged to 68,303 transactions in October, reflecting a 42% increase compared to the same time last year. This positive growth showed things were heading in the right direction leading up to the Autumn Statement on October 30th. However, after the announcement, swap rates and mortgage rates increased, despite the Bank of England’s base rate reduction from 5% to 4.75% on November 7th. I’m pleased to say that, as this is being written, things have returned to a positive position. While the base rate remained steady in December, the rise in CPI inflation from 2.3% to 2.6% made further cuts unlikely. The latest data also shows a 13% rise in buyer enquiries, reinforcing ongoing optimism in the housing market.

The number of sales being agreed has increased by 22% compared to last year’s quieter market, signalling a strong recovery. Additionally, the RICS survey reported that 19% of respondents expect sales activity to see positive growth over the next three months, further boosting optimism. This uptick in both demand and anticipated growth indicates a healthier and more active market as we start a new year.

While there’s positive momentum in the property market, the challenge of getting on the property ladder remains for many. The average age of a first-time buyer has risen to 33.6 years, up from 32.1 five years ago. The OBS Group found that 74% of people see homeownership as important, yet the traditional approach of sacrificing luxuries to save for a deposit isn’t enough. The younger generation faces greater challenges, and more support is needed to help them step onto the property ladder. If you’re in a position to invest in your families futures; whether through built-up equity or by downsizing, now could be a great time to help your loved ones take that first step onto the property ladder, building generational wealth for future generations.

 

If you would like to discuss any of the points mentioned in this market update, reach out to our team to discuss the next steps on your journey.

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 3,136 property transactions across the WR postcode area, a 28% decrease compared to the previous year. Worcester recorded 1,423 transactions, a 25% drop; Malvern saw 456 transactions, down 26%; and Droitwich experienced a decline of 39%, with 359 transactions.

For the same period, the average sale price across the WR postcode area was £289,528. Houses, making up 88% of sales, averaged £316,270, while flats, representing 12%, averaged £150,641. Malvern held steady at £312,262, Droitwich rose slightly to £288,418, and Worcester dipped marginally to £261,357.

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 £885 per month, reflecting a 6% increase. Flats, which made up 41% of the rental market, averaged £735, while houses, at 59%, commanded an average of £1,025 per month.

In Droitwich, rents increased by 8% to £840 per month, with flats averaging £653 and houses £1,145. Malvern saw a 10% rise to £892, with flats at £838 and houses at £918. Worcester’s average rent rose by 7% to £875 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, the average UK property price rose to £292,059, marking a 3.4% increase year-on-year. Property transactions reached 100,410 in October 2024, reflecting a 21% rise compared to October 2023, according to HMRC. The average new seller prices fell by a seasonal 1,7% this month, however the housing market outlook remains very positive, with Zoopla projecting house prices to increase by 2.5% in 2025.

Economy

Following the Bank of England’s base rate cut on November 7th, fixed-rate mortgages have begun to reflect this change, particularly among major lenders, as swap rate stability improves. Inflation (CPI) edged up to 2.6% in November, after a rise to 2.3% the previous month, but remains a positive development compared to the 11.1% peak two years ago.

From April 2025, the residential SDLT threshold will revert to its pre-2022 level of £125,000. If you’re planning a move, contact our team to navigate this change with confidence.

Lettings Market

In November, the average UK rent decreased by 1.5% to £1,307 but remained 2.2% higher than the same period last year (HomeLet). Rental growth is predicted to stabilise, with Hometrack projecting a 4% increase in rents for new lets over 2025. Void periods saw a slight rise, moving from 19 to 21 days in November (Goodlord), reflecting subtle shifts in the rental market. These trends indicate a more balanced market as it continues to adapt to evolving conditions.

We still await further clarity on the recently announced Renters’ Rights Bill, but we do know 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 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.