Worcester, Droitwich & Malvern Market Update – November 2022
COMMENT
Tempting though it is to be flippant, and talk about how busy removal companies have been in Downing Street, the turmoil in the money markets and the disruption of energy supplies seemed to have stalled what was beginning to look like a return to a new normal after the pandemic. We shall just have to wait and see as things unfold with a new leadership team.
Concerns over energy costs are real and a great deal of attention is now focused on energy bills and this could well be the factor influencing more people to consider buying a new home.
Over half (51%) of home buyers would consider buying a new build and 17% are looking only at brand new homes, according to the Property Academy Home Moving Trends Survey 2022. Two thirds of those contemplating a new home purchase, said they are attracted by the energy efficiency and lower running costs of new builds.
Five years ago, I established a specialist Land and New Homes department, which has grown to become an important part of our team, supporting local developers, both in identifying land opportunities and marketing the finished product. If you are contemplating a move and would like to know more about the developments are currently marketing, you will find them on our website. Contact them on:
Phone 01905 930404
New Homes [email protected]
Land [email protected]
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 31st July 2022, now reflect the post pandemic market, the new normal. 3757 sales in Worcestershire is 38% fewer than the previous twelve months. The numbers for the prior year having been uniquely boosted by stamp duty incentives, followed more recently by a shortage of stock coming to the market. 583 sales in Malvern is 36% lower, as is the figure Worcester figure of 1661 sales in Worcester, with 414 sales in Droitwich, down 37% year on year.
Transaction values vary across the county but all now show growth. Malvern’s average remains highest at £290.5K up 9% with Droitwich next at £273.5K up 4% and Worcester, where 44.2% of the sales took place, the average sales price has increased by 6% over the last 12 months to £237.5K.
The increase in average sales prices over the last 5 years is shown below:
The local lettings figures have been fluctuating over the last twelve months, with an increase of 7% recorded in the average figure for properties let in Worcester. Despite recent growth in the average rent for properties let in Droitwich, £722 is still 9% below the overall Worcestershire average of £793. In Malvern, the average rent for properties let over the last twelve months now sits at £869, representing an increase of 18%.
NATIONAL MARKET
Close to 105,000 property sales took place in August, the strongest August since 2007 according to data released by the HMRC.
Nearly 310,000 sales took place between June and August, representing a reduction of 4.2% on the previous three months.
The Bank of England report over 74,000 mortgages were approved in August, approvals up 11.1% on a year ago. Year-to-date approvals for home purchasers are 3.1% higher than the pre-pandemic (2015-2019) average.
Buyer demand in September remained 20% higher than the pre-pandemic five year average according to Rightmove, but this is weaker than a year ago (Zoopla). On average nationally, in July, properties, sold subject to contract, in just 33 days. However, at present, it is taking an average of 136 days (4.5 months) to complete a sale (Rightmove).
ECONOMY
The government’s mini-budget created uncertainty in the global markets, causing the Bank of England to intervene to stabilise the money markets. As a result there are concerns interest rates will now rise more than predicted.
The Bank of England raised the base rate of interest to 2.25%, the seventh consecutive rate rise. This 0.5% rise was lower than the 0.75% many had expected. The current rate of inflation is 9.9%.
The UK economy grew by 0.2% in the second quarter of 2022, revised upwards from a reading of -0.1%. The new figures indicate the economy remains 0.2% smaller than pre the Covid pandemic.
LETTINGS MARKET
Looking at Q3 2022 activity, published by Rightmove, the national average asking rent outside London has hit a new record of £1,162 having jumped by more than 3% in the quarter for only the third time on record.
According to ONS rental prices continue to rise across much of the UK, the ONS index is based on both tenancy renewals and new tenancies. Tenant demand continues to rise with demand up 20% compared with last year and available properties down by 9% leading to strong competition between tenants to secure a property.
The jump in mortgage rates for new first-time buyers could mean some aspirring buyers stay renting for longer, which will place further strain on the number of available homes.
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 uncertaintly fuelled by the mainstream media.
In the midst of this turbulance 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.
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]