Worcester, Droitwich and Malvern Market Update – January 2020
LOCAL MARKET ROUNDUP:
Over the last 12 months, there have been 4849 sales across this area, representing 12% less than the previous 12 months. The local markets of Droitwich Spa and Malvern, where Nicol & Co will soon be opening their third office, have both seen a 7% reduction in the level of activity, with 596 and 654 sales respectively.
Droitwich and Malvern also have similar average prices just over £250,000; however, in Worcester, where over 43% of the sales took place, the average sales price was 12% lower at £221,597.
Source: Dataloft Land Registry
The Lettings picture is slightly different with the average rent achieved in Worcester and Malvern being similar to the WR postcode area average of £651 with Droitwich 27% higher at £827. Rental growth of 3%, has been seen in Worcester over the last twelve months with a similar figure in Malvern whereas, in Droitwich, the figure is an impressive 13%
Source: Dataloft Market Rental Analysis (rental data is based on achieved rents for approximately 10-15% market share, depending on location)
“2020 will be a good year, the current growth in money supply will increase and an 80 seat majority will give confidence resulting in increased activity”. These are the encouraging post-election predictions of Roger Martin-Fagg, a highly respected behavioural economist.
The markets also reacted positively to the news, the value of Sterling rising against both the US$ and hitting its highest level since July 2016 against the Euro. On the stock market the FTSE 100 share index rose 1.8%, while the FTSE 250, which includes more UK-focused shares rose 4%, hitting a record high.
A poll prior to the election by YouGov indicated 14% of people considered housing a ‘top three’ priority in the election, with housing considered more important than education, defence and welfare benefits. So at the beginning of this new year, as we enter a new decade, thankfully we can put years of uncertainty behind us and hopefully get back on the front foot.
Roger Martin-Fagg went on to say, “Money supply in October grew at 3.7%. Following the election result, we can expect to see 5% growth in money supply in the first quarter of 2020. This will finance a 2.2% growth in GDP with an inflation rate of 2.8%.
The best indicator will be monthly house sales. They are normally around 100,000 per month: we can expect 110,000 per month by April assuming the weather is normal for the time of year. There will be price recoveries in London and the SE and average selling prices will rise by 5% across the country.
The UK economy remained static in the three months to October. Economic growth in the final quarter is anticipated to be just 0.1%, with annual growth of 1.3%. The stock markets rose on the results of the election, it remains to be seen whether this continues over the longer term. Base rates were held at 0.75% in November although two members of the committee voted for a decrease which is the first split vote since June 2018. The latest report has raised the possibility that rates could be cut in coming months if Brexit uncertainty persists.
Wage growth continues, average wages rising by 3.6% in the three months to September, twice the rate of current inflation (1.5% in November). Wage growth is anticipated to remain just above 3.5% during the final quarter of 2019.
Average rents rose by 1.4% across the UK in the year to November, the highest rate of annual growth in two years. Price growth is currently strongest across the South West and East Midlands
The proportion of homes let by accidential landlords has fallen for the first time in five years according to Hamptons International. One in fourteen homes that came onto the rental market across Great Britain in 2019 were listed for sale within the previous six months, the lowest level since 2015.
More than one in 10 rental properties across Great Britain is let by an overseas landlord, up from one in 14 a year ago, the first year-on-year increase since records began in 2010 according to Countrywide’s Hamptons International brand.