Worcester, Droitwich, & Malvern Market Update – July 2021
COMMENT
Over 1.3 million new dwellings have been added to the housing stock across England and Wales over the past 5 years, according to data released this week by the MHCLG and Stats Wales. The majority of new dwellings, over 1.1 million are in the private sector, either in owner occupation or privately rented.
Just over four years ago we established a specialist land and new homes team to cater for this growing sector of the market. As members of the Land and New Homes Network, which operates nationally, we are able to draw on a wealth of residential development experience and advise on a wide range of schemes. With an in house Land and Development Consultant we are able to able to offer support and guidance tailored to suit the novice or experienced developer.
We provide regular planning updates and are currently instructed on a number local development opportunities. If this is of interest to you contact the New Homes team, which is based in Droitwich above our residential sales and lettings departments.
LOCAL MARKET ROUNDUP
Over the last twelve months, there have been 3500 sales in Worcestershire, reflecting the impact of COVID-19, 31% less than the previous year. 33% fewer transactions in Droitwich resulted in 433 sales and 509 sales in Malvern represents a lower reduction in activity of 26% year on year.
Average house prices have increased across the county with Droitwich rising to £267K and Malvern falling back slightly to £264.7k. In Worcester, where 42.1% of the sales took place, the average sales price is now 10.8% lower at £236K.
The Lettings picture has been changing over the last twelve months with a 15% increase in the Worcester average to £723. Malvern is 5.4% higher at £756, 2.8% above the overall Worcestershire average of £740, which has also risen by 11%; Droitwich Spa which continues to show healthy growth remains highest at £911.
NATIONAL MARKET
Annual property price growth was 8.9% in the year to April. The average price of a property in the UK is now £250,772. 32% of properties sold for above their initial asking price in April, the highest percentage ever recorded according to the latest data released by the NAEA. At present they estimate there are 16 buyers per available property on the market.
The average new seller asking prices continues to rise, hitting £333,564, setting yet another new record (Rightmove). Supply to the market is at a similar level to the long-term average but demand continues to far exceed supply, 52% higher in April 2021 versus April 2019.
ECONOMY
UK inflation rose to 2.1% in May, up from 1.5% in April as the easing of restrictions sparked a jump in consumer spending and a rise in fuel and clothing prices. Inflation is above the Government’s 2% target for the first time since the summer of 2019. The Bank of England forecast the economy will grow by 7.25% over the course 2021. The economy shrank by 1.5% during Q1 but grew 2.1% in March and is set to recover to pre-COVID levels over the remainder of the year. Interest rates remain at 0.1%
The UK unemployment rate fell from 4.8% in March to 4.7% in April. Many businesses are recruiting staff to deal with pent-up demand as restrictions started to lift. However, around 3-4 million workers remain on furlough and as yet the impact of the 4-week extension to lockdown easing on the economy is unknown.
LETTINGS MARKET
Whilst average rental values across the UK rose by 1.2% in the year to May 2021, rents in Worcestershire have seen a far more significant increase in value growth of 11%.
Growth in tenant demand remains strong at a national level, the latest net balance of RICS agents +48 May 2021. Hometrack report demand in April was up 59% compared to April 2017-2019 for rental property outside London. Supply to the market remains constrained, underpinning prices.
The outlook for rental price growth across the capital over the next 3 and 12 months has moved into positive territory for the first time since pre the COVID-19 pandemic (RICS).
COMMUNITY
The last fifteen months have taught us who the real heroes are in our community. It has been a difficult time for many us but our key workers, teachers and volunteers have just soldiered on. We so admire their commitment that we want to reward it by donating £100 from every sale we make this year. If you know of an established community organisation, in Worcestershire, that should be on the list of potential beneficiaries please write to us at community@nicolandco.co.uk and tell us why.