Worcester, Droitwich & Malvern Market Update – June 2023
COMMENT
Who is buying and for how long? 5.5 million households are currently living in their first-time buyer home, the equivalent of over 35% of all owner-occupiers, meaning a lot of people could be contemplating a move.
36% of first-time buyer households are single person, over 60% are couples with or without dependent children, and one in five of those who live in the first home they bought are aged 65 or more.
Two-thirds of first-time buyers expect to be in their property for less than 10 years. Each year, on average over 350,000 first-time buyers step onto the property ladder. Their average age is now 34. The Halifax report first-time buyers accounted for 52% of all home purchase loans in 2022.
We’re seeing a far greater number of people coming to the market now, offering more choice to buyers. It’s our view that marks a shift in the market, which is now returning to pre-pandemic levels of activity. The red-hot market of 2021, fuelled by stamp duty incentives, is a thing of the past and discerning buyers are looking for value.
Quality marketing and accurate pricing are more important now than ever and if you’re considering a move, we’d love to share our expertise with you.
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 28th February 2023, reveal that there were 34% 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 3836. Sales in Worcester were down 35% at 1688. Malvern was down by 31% at 589 and Droitwich down 30% at 446
Over the last 12 months, transaction values varied across the county, but all have shown growth. Malvern’s average transaction remains highest at £307K up 7% with Droitwich next at £301K up 8%. In Worcester, where 44% of the sales were recorded, the average sales price also increased by 8% to £258.9K.
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 £806. 45% of the homes let in the past 12 months were flats, achieving an average rental value of £698 per month with houses having achieved an average of £918. The average rent for properties let in Droitwich at £729 is 9.6% lower than the overall Worcestershire average. In Malvern, the average rent on homes let in the last 12 months is 13.5% higher at £915 with Worcester closer to the average at £793.
Source: Dataloft Market Rental Analysis (rental data is limited and based on achieved rents for approximately 10-15% market share, depending on location).
NATIONAL MARKET
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).
ECONOMY
Resilient demand and falling energy prices are set to help the UK economy grow by 0.4% in 2023 according to the latest forecast by the International Monetary Fund. Last month the IMF predicted the economy would shrink by 0.3%.
Inflation, the rate at which prices are rising, fell in April to 8.7%. This is the first time inflation has been below 10% since August (ONS). Slower rises in fuel prices are a significant reason behind the fall, while food price rises remain high.
The base rate of interest has risen to 4.5%, its highest rate in 14 years. The Bank of England has however upgraded its growth forecast for the UK economy, which is now expected to return to its pre-pandemic size by the end of this year.
LETTINGS MARKET
Annual growth in private rental prices in the UK rose to 4.8% in the year to April. This is the most significant annual percentage change since the UK series began in January 2016. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets.
The long-awaited Renters’ Reform Bill has been tabled in Parliament. The Bill would abolish no-fault evictions and make it illegal for landlords to refuse families or those on benefits. The government is also consulting on plans that would require homeowners to obtain planning permission before converting properties into short-term holiday lets in tourist locations. It is likely a rental period of between 30-90 days would be allowed before permission is required.
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 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.
