Worcester, Droitwich & Malvern Market Update – March 2022
The UK recorded average house price growth of 10.8% in 2021. This is the strongest annual growth at the year end since 2002. The average price of a UK home now stands at £274,712, marking another record high.
New buyer enquiries rose modestly in December (+9%) marking the fourth successive monthly rise in demand. Demand has been outpacing supply ever since the market reopened in June 2020 with only a slight deceleration when the stamp duty break ended.
This lack of stock has been putting a cap on sales activity. House price growth is likely to continue due to the imbalance in supply and demand meaning it is still a sellers’ market.
More stock will unlock the system and by building chains, we are beginning to see the levels of instructions increase. This is a time when as a full service agent with a dedicated sales progressor in each of our three offices we shall come into our own by ensuring our clients have the peace of mind knowing they have an experienced agent keeping tabs on their sale or purchase every step of the way.
If you know what you are looking for but cannot find it please talk to us as we are talking to others like you and can help with your search.
LOCAL MARKET ROUNDUP
Over the last year, there have been 4293 sales in Worcestershire, 28% more than the previous twelve months; reflecting a significant post lockdown recovery. 632 sales in Malvern represents an increase of 27% and 1881 sales in Worcester, is 36% higher. In Droitwich, the year on year figure is almost identical at 444 versus 448, reflecting the resilience of the local market a year ago.
Average house prices have increased significantly across the county in the last twelve months with Droitwich rising to £276.5K and Malvern very similar at £276.1K. In Worcester, where 43.8% of the sales took place, the average sales price now stands at £242.7K.
The lettings picture has been fluctuating over the last twelve months, with an increase of 8% recorded in the Worcester average. Droitwich after cooling recently is slightly higher at £772 which is also the Worcestershire average whilst Malvern remains 10.4% ahead at £852.
The market continues to be busy. Close to 107,000 sales took place in January, with the exception of 2021, the strongest start to a year since 2007. The HMRC also revised upwards the sales volume for December 2021.
RICS report the volume of new instructions in January remains low, however there are signs of an increase in market appraisals. Expectations are that sales volumes will pick-up over the coming three months, a lack of current stock restricting the current sales pipeline. Sales volumes of 1.2 million are predicted for 2022, in line with more ‘normal’ market conditions. This follows volumes in 2021 being at their highest level since the global financial crisis. Rightmove report a surge in new sellers coming to market on Boxing Day, volumes up 21% year-on-year.
The UK economy grew by 7.5% in 2021 despite falling back in December due to the Omicron restrictions. This follows a contraction of 9.4% in 2020 as many sectors of the economy were forced to close due to the Covid-19 pandemic. The cost of living continued to rise in January, up 5.5% year-on-year. Higher clothing and footwear prices and fewer January sales pushed inflation upwards. In recent times businesses have faced a triple whammy of higher wage, transport and energy costs which many have been forced to pass on to consumers. .
The Bank of England’s latest Monetary Policy report predicts post tax incomes will fall 2% in 2022, after taking into account rising living costs. This would represent the largest fall in take-home pay since records began in the 1990s.
Private rents across the UK rose by 2.0% year-on-year according to the latest data produced by the Office for National Statistics. Rental values rose in all regions of the UK except Wales. Excluding London rents rose by 3.0%, the strongest since records began in 2016. Renter demand continues to rise sharply, a net balance of +64 of contributors to the RICS January 2022 survey noting an increase. This is the strongest reading since records began in 1999. The volume of new supply to the market remains subdued, a 4% rise in rental prices anticipated over the course of 2022.
Analysis of Companies House data by Hamptons indicates that 47,400 new buy-to-let companies were incorporated in 2021. There are now 269,300 such companies on record, 61% of which have been set up since the the withdrawal of mortgage interest tax relief from April 2017.
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: email@example.com