Worcester, Droitwich & Malvern Market Update – March 2021
I think it’s fair to say our decision to delay writing this column was well founded having now heard from the horse’s mouth exactly what the Chancellor’s plans are. The extension of the Stamp Duty holiday, on purchases up to £500,000 until the end of June, followed by three months at £250,000, gives people a real chance to proceed with their plans and avoid disappointment or an unexpected bill.
Associated with the other announcement made today, regarding the Government’s guarantee to lenders who are willing to offer 95% mortgages, this will be really encouraging news for those who have been struggling to save for a deposit and cover the costs associated with a purchase.
This is good news for purchasers and therefore will be good news for sellers. Once the schools go back and kitchens cease to be classrooms we expect to see more houses coming to the market.
In December the UK HPI (ONS) reported a 8.5% annual increase in house prices.
In the light of the Budget and the support being made available by government for an investment lead recovery we can expect to see further confidence in the market.
The team at Nicol and Co are now waiting to hear from you!
LOCAL MARKET ROUNDUP
Reflecting the impact of COVID-19 over the last twelve months, there have been 3357 sales in Worcestershire, this is 34% less than the previous year. In Malvern, a 27% reduction in the volume of transactions resulted in 498 sales. 448 sales in Droitwich Spa represents a year on year reduction in activity of 31%.
Average house prices in Droitwich sit at £261.5k with Malvern at £251.4K. In Worcester, where 41.2% of the sales took place, the average sales price is 11% lower at £223.6K.,
The Lettings picture has changed over the last twelve months with a 15% increase in the Worcester average to £696. Malvern is a little higher at £712 now 6% below the overall Worcestershire average of £758, which has risen by 17%; Droitwich Spa remains highest at £764
129,400 transactions (seasonally adjusted) were recorded in December 2020, 31.5% higher than December 2019. A monthly increase of 13.1% (HMRC).
103,381 mortgages were approved in December 2020, over 50% higher than in December 2019 and at £24.2 billion, gross lending was at its highest monthly figure since March 2016. Year-on-year mortgage approvals in 2020 were up 3.7% on 2019 (Bank of England), although the value of lending was 10% lower.
Demand for homes is up 13% on this time last year and new sales agreed are up 8%. Supply does not match the increase in demand, with 7% fewer homes for sale than a year ago. This imbalance is putting upward pressure on house prices (Zoopla).
The UK economy shrank by 9.9% in 2020 as coronavirus restrictions reduced output. In December, the economy grew by 1.2% as some restrictions were eased, meaning the UK looks set to avoid its first double-dip recession since the 1970s.
Economists anticipate a sharp decline in activity during the first quarter of 2021, with most restrictions remaining until early April. The economy should pick up from the second quarter of 2021, following a successful vaccination programme.
The unemployment rate rose to 5.1% in the three months to December, 1.3% higher than a year earlier and 0.4% higher than the previous quarter. Unemployment is greatest in those under the age of 25.
COVID SECURE VIEWINGS
Under the latest lockdown restrictions you are still permitted to move house. Nicol & Co has operated safely and effectively throughout the previous lockdown periods and will continue to do so carefully following the latest government guidance. We have Covid Secure procedures and policies in place to ensure we operate safely reducing social contact and the risk of spreading the virus.
If you have any questions, please contact us.