Worcester, Droitwich, and Malvern Market Update – February 2020
LOCAL MARKET ROUNDUP
Over the last 12 months, there have been 4,849 sales across the WR postcode area, 11% less than the previous year. In Malvern, where Nicol & Co will soon be opening their third office, activity was 10% lower with 651 sales, while in Droitwich, 616 sales reflect the resilience of the market, being only 3% down, despite the recent months of uncertainty.
Droitwich and Malvern have similar average prices, close to £250,000; however, in Worcester, where 43.6% of the sales took place, the average sales price is 10% lower at £224,820.
The Lettings picture is similar with the average rent achieved in Worcester lowest at £605, with Malvern 12.5% higher at £681, similar to the WR postcode area average of £651. Droitwich Spa remains highest at £823, 26.4% above the postcode area average. Modest rental growth of 2% has been seen in Worcester, over the last twelve months, with a similar figure 3% in Malvern whereas; the figure is an impressive 13% in Droitwich Spa.
The latest house price data published by Land Registry shows that UK House prices are growing and have increased by 2.2% in the year to November 2019. This is the highest level of annual growth recorded since November 2018. As of November 2019, the average price of a property across the UK was £235,298.
House prices in Wales were up 7.8% compared to last year, while England saw a rise of 1.7% in this time. In English regions, the West Midlands saw the largest property price growth in the year to November 2019, with a 4% increase.
Rightmove’s house price index has revealed a further increase of 2.3% between December and January, amounting to £6,785 and apparently, there have been 1.3 million buyer enquiries since the election, up 15% compared to the same period a year ago.
We are experiencing a marked increase in activity locally, with new properties coming to the market with us daily. It’s clearly the right time to be having a conversation about your plans so why not give us a call?
An average of independent forecasts predicts the average price of a property will rise by 1.8% over 2020 and 15.9%, cumulatively, over the next five years, an increase in purchase price of just over £37,000.
Over the next five years, all regions of the UK are anticipated to witness double digit price growth, the North West and Yorkshire and the Humber leading the pack.Despite predictions that cumulative growth across the capital will be below that of other regions, the average price of a property across London looks set to rise by over £50,000 over the next four years.
At 76.3% the UK employment rate was at a record high in the three months to November, while wage growth continues to outpace rises in the cost of living. Adjusting for inflation, wages were 1.6% higher than a year ago (including bonuses) and 1.8% higher (excluding bonuses).
UK inflation unexpectedly fell to its lowest level in over 3 years in December. According to the ONS consumer prices rose just 1.3% in December, the smallest increase since November 2016. The fall is likely to fuel expectations that the Bank of England will cut interest rates which were held at 0.75% in November.
While downgrading global economic growth, latest forecasts by the IMF predict the UK economy will grow faster than the eurozone in 2020 and 2021. It is predicted to grow by 1.4% over 2020 and 1.5% over 2021 compared to 1.3% and 1.4% across the eurozone.
James Anderson, operations director of property lender MT Finance, said: “Political uncertainty has, at times, brought the housing market to an almost complete standstill and while we are early into 2020, we are starting to see demand overcoming doubt. “We hope the early movers – often professional investors who recognise that there are great deals out there – will be met by vendors who respond with the necessary supply as we move into spring.
The rate of annual rental growth across the UK remained unchanged in December at 1.4% (ONS). A shortage of supply and continued demand continues to underpin prices. Hometrack report a 4% reduction in rental supply across the UK since 2017, while demand has increased 8% over 2019.
At 2.8% rents are rising at their highest level for almost four years across the capital, which has seen a 19% reduction in available supply over the past two years.
New Electrical Safety Standards in the private rented sector come into force later this year. The regulations will
apply to new tenancies from 1st July 2020 and existing tenancies from 1st April 2021. Landlords must ensure all electrical installations are inspected and tested by a qualified person every five years, and provide a report back to the tenant within 28 days. If you need assistance in setting this up please contact us on 01905 675999.