Droitwich, Worcester & Malvern Market Update – November 2023

COMMENT

Well under half of today’s young adults own their own home (41% of those aged 25–34). Although this has not changed much in the last decade, it was very different for their parents’ generation.

30 years ago, two-thirds (66%) of 25 to 34-year-olds had bought their own home. The decline in owner occupation in this age group, between 1991 and 2011/12, accounts for the steep increase since in the size of the private rented sector.

With a general election on the horizon, it seems likely that all parties will court the young adult vote with policies to ease that first step onto the housing ladder.
According to Rightmove, letting agents currently have an average of 25 email and phone enquiries for every property on their books, which is three times more than 2019 levels and five times more than May this year.

It would therefore be good to see some more changes in the manifestos of all parties that would satisfy this demand by encouraging more investors into the private rented sector.

If this is something you’re considering, our Lettings Manager James Gwynne will be hosting a Landlords’ Seminar on Wednesday 6th December at the County Sports Ground in Claines Lane Worcester at 6:30pm. Admission is free but places are limited so please book your place via the Eventbrite link below.

LOCAL MARKET ROUNDUP

The latest available Land Registry statistics, for the year ended 31st July 2023, reveal that there were 28% fewer sales across WR postcode area than the previous 12 months. The actual number of transactions was 3489. Sales in Worcester and Malvern were both down 28% at 1536 and 530 respectively with Droitwich down 29% at 403

Over the last 12 months, 14% of the sales across the wider area have been flats at an average price of £151,265. Houses have averaged £321,952 resulting in an overall average of £288,989. Averages vary across the county, but all have shown growth. Malvern’s overall average transaction value remains highest at £318,465 up 5%, with Droitwich next at £290,145 up 4%. In Worcester, where 44% of the sales were recorded, the overall average price increased by 5% to £255,810.
The increase in average sales price over the last five years is shown below:

Across the WR postcode area, the average rent for homes let over the last 12 months increased by 6% to £848. 40% of the properties let were flats, achieving an average of £702, while houses achieved £972 per month. The average rent for properties let in Droitwich is £757, 11% lower with flats here averaging £577 and houses £955. In Malvern, the rent on homes let in the last 12 months was at the same average of £848. 40% of properties were flats, achieving an average of £749 per month, while houses achieved £920 per month. Worcester’s figure remained 3% below the average at £819.

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

HMRC report that 87,010 sales took place in August. This is a small improvement of 1.1% on the previous month, but significantly lower than last year’s higher levels (-15.6%).

Mortgage approvals in August dropped to 45,000, 8% lower than the previous month. This is below the long-term average but a 14% improvement on the start of the year.
In their latest survey the RICS’ measure for Agreed Sales came in at -37% in September, an improvement on August and July, but still in negative territory.

Three-quarters of buyers in August were confident they’d purchase a property within the next three months, whereas 61% of sellers were confident they would sell their property within the same time frame (OnTheMarket).

ECONOMY

On the 21st September after governor Andrew Bailey indicated to MPs on the Treasury Committee that he expects inflation to fall quite markedly this year, the Bank of England held base rates at 5.25%, ending a cycle of 14 consecutive rate rises. The Bank of England next meets on 2nd November to decide on any further changes to interest rates.

Monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August, following a fall of 0.6% in July 2023. Looking at the broader picture, GDP increased by 0.3% in the three months to August, with growth in all three sectors.

Inflation fell to 6.7% in the year to August, down from 6.8% in July, the third month in a row that the figure has dropped. Slowing food prices helped drive the fall (ONS).

LETTINGS MARKET

At 5.7% in September, annual growth in rental prices in the UK continues to be at its strongest since records began. The Index of Private Rented Housing Prices reports on both new lets and renewals.
The average rent on newly agreed rental contracts reached £1,276 in September, a 10.1% year-on-year increase (Homelet).

Prime Minister Rishi Sunak has announced a u-turn on the government’s sustainability agenda. Following a period of speculation, they announced they were shelving any new EPC regulations with no plans to revisit the proposals in the foreseeable future. This news has been welcomed by those having to consider potentially expensive improvements to their portfolios.

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.