Worcester, Droitwich & Malvern Market Update – April 2022
COMMENT
Nearly 74,000 mortgages were approved in January 2022; with the exception of 2021 the strongest start to the year since 2014. At £23.8 billion, lending levels were just 2% lower than a year ago as remortgage activity continues apace. Newly marketed properties are being snapped up fast, with Rightmove reporting that 22% of deals are agreed within the first week of being listed.
This is more than double what was seen at the same time in 2019 and reflects the continued large disparity between supply and demand in the market. Properties are currently selling 20 days quicker than the long term average (Rightmove), with a significant proportion selling above initial asking price. In February we achieved on average 101.81% of the asking price on behalf of our clients. Needs-based buyers are the most active in the market place at the current time.
In such a dynamic market, if you are considering a move, it’s important to know your budget is, whether that’s getting an updated valuation on existing home or checking out the latest mortgage deals on offer. All the information you need is available on our website, which these QR Codes will take you to.
We look forward to hearing from you.
LOCAL MARKET ROUNDUP
Over the last year, there have been 4940 sales in Worcestershire, 49% more than the previous twelve months; reflecting a significant post lockdown recovery. 723 sales in Malvern represents an increase of 45% and 2122 sales in Worcester, is 54% higher. In Droitwich, the year on year figure is 489 versus 417 only up 17% reflecting the resilience of the local market a year ago.
Average house prices have increased significantly across the county in the last twelve months with Malvern rising 9.6% to £283K with Droitwich just behind at £277.7K up 6.4%. In Worcester, where 49% of the sales took place, the average sales price now stands at £241.4K up 6.2%.
The lettings picture has been fluctuating over the last twelve months, with an increase of 7% recorded in the Worcester average. Droitwich after cooling recently sits at £755 just below the Worcestershire average whilst Malvern remains 6.4% ahead at £803
NATIONAL MARKET
Average property prices rose by 9.6% in the year to January 2022, with the average price of a property across the UK £273,762. Double digit price growth is evident in seven out of ten regions of the UK (ONS).
The Bank of England has launched a consultation into removing the mortgage affordability test first introduced in 2014 to guard against reckless lending. Most home owners are limited to borrowing 4.5 times their income. The consultation runs until 6th May.
Price growth is anticipated to continue across virtually all regions of the UK over the next three months. Sentiment levels are highest across the North West and Yorkshire and the Humber. Only in the East of England do surveyors expect prices to remain static (RICS).
ECONOMY
The Chancellor, Rishi Sunak, delivered the spring statement on March 23rd. From July, the threshold for National Insurance will rise by over £2,500 to £12,570, representing a tax cut worth £330 per year for employees. This should help offset household energy price rises. The Bank of England have raised interest rates back to their pre-pandemic level of 0.75%. This represents the third rise in four months as the Bank aims to calm the rising cost of living.
Inflation, the cost of living, rose to 6.2% in February. This represents its highest rate in 30 years as fuel, food and energy costs soared. Cost of living rises now considerably outpace wage growth placing pressure on household incomes. The Chancellor has cut fuel duty by 5p for the next 12 months.
LETTINGS MARKET
Rental values continue to rise across all regions of the UK, with annual growth currently strongest in the East and South West. Demand for property continues to outpace supply creating sustained pressure on prices.
Rental values across all regions of the UK are expected to rise over the next three months, with surveyors projecting annual growth of 4.5%. Rents are anticipated to rise by an average of 5% per annum over the next five years (RICS).
The National Residential Landlords Association estimates that removing the 3% additional stamp duty for additional properties could add 900,000 homes to the private rented sector, and deliver an extra £10bn in revenue for the Treasury. They predict private rented stock could drop by over 500,000 over the next decade if taxes are not reformed again.
COMMUNITY
If the pandemic has taught us anything, it is the value of community, and who the real heroes are. Whilst it has been a difficult time for many of us, our key workers, teachers and volunteers have consistently stuck to their tasks. Like many, we really admire this commitment and want to continue to support them by donating £100 from every sale make again this year. In 2021, we donated over £12,000 to local organisations through our Community Fund. If you know of an established community organisation, based in Worcestershire that you feel should be on the list, of potential beneficiaries, please write to us and tell us why. Contact: community@nicolandco.co.uk