Worcester, Droitwich & Malvern Market Update – March 2023
COMMENT
Every 10 years, the Census documents the way we live and who we live alongside in England and Wales. It usually makes fascinating reading for anyone interested in the housing market and Census 2021 is no exception.
In the decade to 2021, the population of thirty-somethings in England and Wales grew by more than 700,000. Given the average age of a first-time buyer is just under 34 years old, that’s a substantial number of people who might be ready to buy their first home. Over the same period, the number of over-sixties grew by almost two million, creating a sizeable cohort of people who might be contemplating downsizing, or a significant lifestyle change.
Recent analysis of the average asking price of properties coming to the market since the beginning of this year is indicating larger properties are becoming available. The average is going up at a time when prices are not. This emerging trend is likely to be driven by the increasing costs of energy and maintenance for homeowners who find themselves asset rich but income poor. If you consider these factors alongside the number of homes that are owned outright, shared last month, I believe we can expect to see more of this in 2023.
If you are interested in what your house is worth and would like to discuss your own specific circumstances, please contact us. My award-winning and friendly team are trained and ready to speak to.
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 30th November 2022, reveal there were 38% fewer sales in Worcestershire than the previous twelve months, when the numbers had been boosted by stamp duty incentives. The actual number of transactions was 3798. Sales in Worcester were also down 38% at 1666, with Malvern and Droitwich both down by 33% with 609 and 445 respectively.
Over the last 12 months, transaction values varied across the county, but all have shown growth. Malvern’s average transaction remains highest at £307.8K up 8% with Droitwich next at £287.6K up 5%. In Worcester, where 44% of the sales were recorded, the average sales price increased by 8% to £251.5K.
The local lettings figures vary. An increase of 8% in the average rent for properties let over the last 12 months has been seen in both Worcester and the wider WR postcode area. However, despite significant recent growth in the average rent for properties let in Droitwich, £733 is still 8.5% below the Worcestershire average of £801. In Malvern, the average rent on homes let in the last 12 months now sits 10.4% higher at £809, representing an increase of 6%.
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
More than 1.26 million sales took place across the UK in 2022, making the market, after 2021, the busiest since 2007. Sales volumes in December were up 1.4% year-on-year and stronger than the pre-pandemic average (HMRC).
UK Finance anticipates house purchase sales will drop by 21% in 2023 to just over one million. They forecast lending by banks and building societies will reduce by 23% back to pre-Covid levels.
The asking price of a newly marketed property rose by 0.9% in January, with Rightmove recording a bigger than usual New Year bounce in demand.
ECONOMY
The UK economy narrowly avoided recession in 2022 with the economy recording 0% growth between October and December. The Bank of England expect any recession in 2023/24 now to be shorter and shallower than previously predicted.
The Bank of England raised the base rate of interest to 4%, the highest rate in 14 years, with expectations in some quarters that the rate will peak at 4.5% this year.
Price rises slowed for the third month in succession with inflation in the year to January now at 10.1%, down from 10.5% in December as fuel prices begin to ease.
The Bank of England expect inflation to ease back to 5.2% later this year.
LETTINGS MARKET
In the year to January, monthly rental prices in the UK rose by 4.4%, up from 4.2% in December. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets.
At £1,074 the average rent in the UK in December was 0.1% lower than in November, the first fall in rental prices in over a year. Year-on year, every region in the UK continues to see rental price growth (HomeLet).
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 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.
COMMUNITY FUND
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]