Worcester, Droitwich & Malvern Market Update – August 2021
COMMENT
According to the English Housing Survey, one in every eight home movers, across the UK, expects to be in their new home for less than 5 years and over a third expect to move on within ten years. Younger homebuyers, (aged up to 34), move more quickly with one in five only expecting to be in their next home for 5 years or less and over half of expecting to move again within a decade.
In 2019/20, those with a mortgage spent an average of 10 years in their home. This compares to 23.8 years for owner-occupiers who own their property outright and whilst this survey may not have produced any startling results, it may raise a question in the minds of those who own their properties outright “Why are we waiting so long to downsize?”.
The concept of rightsizing seems obvious, as families are growing but apparently less so when the nest is empty. In such a healthy market, it would be a good time to look at your options and see what is available. If it has been a while since you were last in the market and you find starting the conversation quite difficult, we completely understand and are here to help you every step of the way.
Why not give us call and have a chat?
LOCAL MARKET ROUNDUP
Over the last twelve months, there have been 3847 sales in Worcestershire, reflecting the impact of COVID-19, 21% less than the previous year. 24% fewer transactions in Droitwich resulted in 484 sales and 560 sales in Malvern represents a lower reduction in activity of 15% year on year.
Average house prices have increased across the county with Droitwich rising to £272K and Malvern similar at £270.8k. In Worcester, where 42.7% of the sales took place, the average sales price is now 11.4% lower at £240K.
The Lettings picture has been changing over the last twelve months with a 6% increase in the Worcester average to £726. Malvern is 7.4% higher at £780, 4.8% above the overall Worcestershire average of £744, which has risen by 5%; Droitwich Spa which continues to show healthy growth remains highest at £894.
NATIONAL MARKET
Annual property price growth was 10% in the year to May, month-on-month prices increased by 0.9% according to the latest edition of the UKHPI. The average price of a property in the UK is now £254,624.
A net balance of agents (+56) sense prices will rise over the next 12 months according to the June sentiment survey released by the Royal Institute of Chartered Surveyors. Measures tracking new instructions have fallen for the third consecutive month while demand and sales measures remain positive.
The average new seller asking price continues to rise, £338,447 in July, setting a new record for the fourth consecutive month (Rightmove). This has resulted in new record high prices in all countries and regions of the UK.
ECONOMY
UK inflation hit 2.5% in the year to June, its highest rate in nearly three years. The rise was driven by higher food and fuel costs and was higher than many predicted. High inflation will fuel debate as to whether interest rates should rise. Demand for food and drink bolstered retail sales in June, sales 9.5% higher than pre the pandemic in February 2020. The Euro 2020 football championships was a significant factor, millions purchasing food and drink to watch the championships at home. The economy remains 3.1% below the pre-coronavirus pandemic levels seen in February 2020 (ONS).
LETTINGS MARKET
At 28.3%, the proportion of gross income private renters in England and Wales spend on their rent is only marginally higher than five years ago. Over the past five years, average earnings of renters have risen by 8.8% while average rents have risen by 9.6%.
Currently demand for rental properties is high. Average asking rents in Q2 2021 were up 2.6% year-on-year (Rightmove) and a shortage of stock looks set to underpin prices over the coming months. Source: Dataloft Rental Market Analytics (DRMA), based on tenancies started 01.07.20 to 30.06.21 and 01.07.15 to 30.06.16
COMMUNITY
The last eighteen months have taught us who the real heroes in our community are. 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 continue to reward it by donating £100 from every sale we make this year. If you know of an established community organisation, in Worcestershire, that you feel should be on the list of potential beneficiaries please write to us at community@nicolandco.co.uk and tell us why.