Worcester, Droitwich & Malvern Market Update – January 2022
Against the backdrop of strong economic growth, particularly in 2021 and 2022, forecasts for property price growth over the coming years are positive.
The forecasts, produced by the Office for Budget Responsibility in the wake of the Chancellor’s Autumn Budget in October, indicate that while property price growth looks set to moderate over the coming years, prices are not expected to fall.
The housing market proved to be one of the bright stars during the initial Covid-19 pandemic, bolstered by the significant government economic support packages and the stamp duty holiday. The impact of the Omicron variant is yet to play out but the early indicators are that the market is returning to pre-Covid patterns.
So we feel now is a great time to be proactive and we would love to hear from you. In 2021 we conducted over 6,500 viewings and made and received over 300,000 phone calls on behalf of our vendors and landlords. We launched 482 properties; completed on 450 sales and created 135 new tenancies in twelve months and we look forward to serving the Worcestershire market again in 2022.
Let’s hope it’s a happy and healthy year for us all.
LOCAL MARKET ROUNDUP
Over the last year, there have been 4251 sales in Worcestershire, 23% more than the previous twelve months; reflecting a significant post lockdown recovery. 611 sales in Malvern represents an increase of 19.3% and 1819 sales in Worcester, is 27.5% higher. In Droitwich, the year on year figure is almost identical at 466 versus 469, reflecting the resilience of the local market a year ago.
Average house prices have yet again increased across the county with Malvern rising to £285.7K and Droitwich £275.2K. In Worcester, where 42.8% of the sales took place, the average sales price now stands at £242.8K.
The lettings picture has fluctuated over the last twelve months, with an increase of 7% to £752 recorded in the Worcester average. Malvern and Droitwich are very similar at £807 and £809 respectively; 5.5% above the Worcestershire average of £765, which has grown by 6%.
Across the UK the average price of a property in October was £268,349, 10.2% higher year-on-year. Month-on-month average prices fell by 1.1% (UKHPI). A net balance of agents (+69) sense prices will rise over the next 12 months according to the October sentiment survey released by the Royal Institute of Chartered Surveyors. The HMRC predict 76,930 sales took place in October, a 52% decline on the previous month following the end of the stamp duty holiday.
Zoopla forecasts for 2022 show transaction levels at 1.2 million, down from 1.5 million this year but in line with trends over the previous five years.
A lack of new instructions to the market is restricting sales. The latest sentiment survey from the RICS indicates a net balance of agents reported a continued decrease in a lack of new instructions.
The Bank of England have raised the base rate of interest to 0.25% in a bid to tackle inflation. This is the first rate rise in over 3 years, members of the Bank’s Monetary Policy Committee voting 8-1 in favour of the increase. Inflation, rose to 5.1% in November, its highest rate in 10 years. Rising transport and energy costs were largely responsible for the rise. The IMF predict inflation may hit 5.5% early in 2022.
Weekly earnings annual growth is set to average 5.7% in 2021, the highest level in 20 years. adjusting for inflation this equates to 3.6% in real terms, after 1.8% (nominal) and 0.8% (real) in 2020. (National Institute of Economic and Social Research).
Average values across the UK, excluding London, rose by 2.5% in the year to November. The ONS report rental values are rising across all regions of the UK except London where they were -0.1% lower year-on-year. The South West and East Midlands are currently experiencing the strongest rates of growth
Respondents to the latest RICS sentiment survey now project rents to rise by close to 4% over the next year, with respondents foreseeing rental growth over the next five years averaging close to 5% per annum.
Homelet report at £1,058 the average monthly rent in the UK is 8.6% higher than a year ago., excluding London the average UK rent is £889, a 7.4% increase year-on-year.
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: firstname.lastname@example.org