Worcester, Droitwich & Malvern Market Update – July 2023
With property price growth softening, realistic pricing is paramount to sales success, with some vendors seemingly overly optimistic in current market conditions. A number of market commentators are interpreting this a reduction in values, which may be true in some parts of the country but not necessarily the case across the board.
Our experience in Worcestershire is a great deal of activity with steady demand as a result of more choice being available for buyers. Whilst the media often focus on individual circumstances, which make good headlines, for the vast majority, the reality is different.
Over 38% of the 126,677 dwellings in the WR postcode are owned outright. Only 29.8% are owned subject to a mortgage. Owners who have been well advised are also likely to be benefitting from the certainty of longer-term fixed rate mortgage deals that have become much more of a feature of the market.
Again, whilst it may not make the news, according to the latest data from the Bank of England, over 52,000 mortgages were approved in March, up 18% on February. This represents the most significant month-on-month rise since early 2009 (excluding the summer of 2020). 70% of buyers canvassed in April were confident they would purchase a property within the next three months.
This is a time to be taking good advice and that is what my team are here to offer. Why not give us a call?
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 31st March 2023, reveal that there were 32% fewer sales in Worcestershire than the previous 12 months, when the transaction numbers were boosted by stamp duty incentives. The actual number of transactions was 3724. Sales in Worcester were down 34% at 1628. Malvern was down by 29% at 568 and Droitwich down 28% at 439.
Over the last 12 months, transaction values varied across the county, but all have shown growth. Malvern’s average transaction remains highest at £309.4K up 6% with Droitwich next at £298.2K also up 6%. In Worcester, where 43.7% of the sales were recorded, the average sales price increased by 8% to £259K.
The increases in average sales price over the last five years are shown below:
Across the WR postcode area, the average rent for properties let over the last 12 months has increased by 6% to £809. 45% of the homes let in the past 12 months were flats, achieving an average rental value of £702 per month with houses having achieved an average of £921. The average rent for properties let in Droitwich at £728 is 10% lower than the overall Worcestershire average. In Malvern, where there are fewer flats, the average rent on homes let in the last 12 months is 14.5% higher at £926 with Worcester closer to the average at £796.
Source: Dataloft Market Rental Analysis (rental data is limited and based on achieved rents for approximately 10-15% market share, depending on location).
Nationwide report the average price of a property rose 0.5% month-on-month in April, the first month-on-month rise after seven consecutive months of falls. Rightmove report year-on-year asking prices are 1.5% higher.
Over 52,000 mortgages were approved in March, up 18% on February according to the latest data from the Bank of England. This represents the most significant month-on-month rise since early 2009 (excluding the summer of 2020).
70% of buyers canvassed in April were confident they would purchase a property within the next three months. Just 7% stated they were concerned about securing a mortgage to fund the purchase (OnTheMarket).
Inflation, the rate at which prices are rising, remained at 8.7% in May, as core inflation remains at its highest rate since 1992. The Bank of England has raised the base rate to 5%, up from 4.5%.
UK wages rose by 7.2% in the three months to April, their fastest rate (excluding the pandemic) in 20 years. The Bank of England has warned sharp pay rises are likely to prolong high rates of inflation.
The UK economy grew by 0.2% in April according to official figures released by the Office for National Statistics. The growth followed a 0.3% fall in March. The labour market remains strong with unemployment at just 3.8%.
Annual growth in private rental prices in the UK rose to 5.0% in the year to May. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets.
Buy-to-let investors remain an important sector of the market. Close to 30% of agents state that when a rental property is put up for sale the most likely purchaser is an investor.
The summer months are the busiest time of the year for the rental market, and demand for homes to let continues to outpace available supply with rental homes letting quickly with minimal void periods. There are now more than 5 million households in the private rented sector, an increase of close to 20% on a decade ago.
Source: #Dataloft Inform Poll of Subscribers, Dataloft Rental Market Analytics, Census 2021
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 uncertainty fuelled by the mainstream media.
In the midst of this turbulence 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.