Worcester, Droitwich & Malvern Market Update – January 2023
COMMENT
All 10 regions across England and Wales have registered a better performance of prime homes (top 25% of sales) in the 12 months to the end of October 2022. The average rate of annual growth for the top quartile of the market stands at 8.4% Prime markets have, on average, increased 2.7% more than the market as a whole.
Nationally, house price growth has slowed considerably overall but there will remain opportunities for growth, including in prime markets where buyers have more equity and are less reliant on mortgage finance. Growth of 7.3% in the average values in Worcestershire compares favourably with the West Midlands Regional figure of 5.1% and 4.5% nationally.
The quality of life and the amenities available to the residents of Worcestershire underpin a healthy demand in the local market. Our county offers a wide range of opportunities with excellent communications, both physical and virtual. These factors have clearly become more significant in the minds of homebuyers generally which bodes well for the future of the local market.
If you are considering a move in 2023 we would love to help you consider your options and help you with your search, why not give us a call?
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 30th September 2022, clearly reflect the post pandemic market. 3595 sales in Worcestershire is 45% fewer than the previous twelve months, when the numbers had been uniquely boosted by stamp duty incentives. 1629 sales in Worcester is 43% fewer, as is 397 in Droitwich, with 543 in Malvern representing a reduction of 44%.
Transaction values vary across the county but all show growth. Malvern’s average transaction remains highest at £298.4K up 9% with Droitwich next at £278.6K up 4% and Worcester, where 45.3.% of the sales took place, the average sales price has increased by 7% over the last 12 months to £244.7K.
The increase in average sales prices over the last 5 years is shown below:
The local lettings figures have been fluctuating over the last twelve months, with an increase of 8% recorded in the average figure for properties let in Worcester. Despite recent growth in the average rent for properties let in Droitwich, £734 is still 9% below the overall Worcestershire average of £806. In Malvern, the average rent for properties let over the last twelve months sits at £886, representing an increase of 13%.
NATIONAL MARKET
All the national indices report annual property price growth is softening, with price readjustments expected over the course of 2023. In the 2 years since the re-opening of the market in June 2020, average prices rose by 23% (ONS).
The asking price of a newly marketed property fell by 2.1% month-on-month as Rightmove report sellers are adjusting their expectations to adapt to a less frenetic market.
The average price of a property in the UK is currently £296,422 according to the latest UK HPI.
Over 107,000 sales took place in November, the busiest November, except for 2021, since 2007. Sales volumes September-November were up 3.3% on the previous 3-month period according to data from the HMRC.
ECONOMY
The base rate of interest has risen to 3.5%, the highest rate in 14 years. US and Euro zone rates have also risen. Some analysts expect the UK base rate to peak at 4.5% before falling back to 3%. Our expectation of the peak is somewhat lower at 3.75%.
The rate of inflation slowed to 10.7% in the year November from 11.1% in October, but the cost of living remains high. The drop was mainly due to falling fuel prices.
The UK economy shrank by 0.3% in the 3 months to October, slowing across all three main sectors; production, construction and services. The UK economy is forecast to shrink by 1.4% in 2023 but is expected to grow from mid-2024-2027.
LETTINGS MARKET
At 4.0% UK rental price growth in the year to November has increased for the 15th month in succession. The ONS index is based on renewals and new rentals. Demand is set to outpace supply in the rental market for the foreseeable future as mortgage pressures impact the number of renters able to move into the owner occupation.
JLL predict the cumulative growth in rental values will be 15.9% in the five years to 2027, with higher growth in 2023/24 followed by growth closer to 2%-3% in 2025-2027 as inflation is brought back under control.
MARKET INSIGHTS
In response to the regular feedback we receive regarding the value of our Market Updates we have decided to publish more regular market insights online. We are emerging from an unprecedented period of activity at the same time as having to cope with equally unusual economic pressures; added to which there is a measure of political uncertaintly fuelled by the mainstream media.
In the midst of this turbulance we believe it is important for you to hear clear, evidence based messages to help you navigate in the current market and make the right choices.
With nearly two decades of experience our MD, Matt Nicol is keen to ensure you have access to expert advice and invites you to ask him directly via our website or by following us on our social media channels.
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 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 we make again this year. So far, we have donated over £25,000 to schools and local organisations through our Community Fund. If you know of an established community organisation or local charity, based in Worcestershire that you feel should be on the list, of potential beneficiaries, please write to us and tell us why. Contact: [email protected]