Worcester, Droitwich & Malvern Market Update – October 2020
Just as we were emerging from the banking crisis in 2009 Nicol & Co arrived on the scene as a one-man band in Droitwich. This month we shall have clocked up 11 years, now with a team of approaching 40 staff, we are once again emerging from a difficult few months and about to open a new office in Malvern.
I would like to take this opportunity to thank our clients and staff for their continuing support and renew our commitment to providing remarkable service.
Somethings however will never change and it will come as no surprise that homes that are priced ‘right’ sell more quickly. According to new research published by Rightmove such homes currently sell 26 days quicker than homes that have experienced a price reduction.
It is estimated that around 16% of properties currently on the market have experienced a price reduction, with properties reduced on average by 5% from their initial asking price.
The experience and local market knowledge of our valuation specialists means we can help you achieve the best results quickly which is particularly important if you are hoping to take advantage of the Stamp Duty Holiday. Our results demonstrate we regularly achieving more than the asking price for our clients.
If lockdown has prompted you into considering a move please, take a look at our website to see what we have to offer, or contact us to arrange a discussion about your thoughts and plans.
LOCAL MARKET ROUNDUP
Reflecting the impact of COVID -19 over the last twelve months, there have been 4013 sales in the WR postcode area, this is 22% less than the previous year. In Malvern, where we are soon opening our third office, a 21% reduction in the volume of transactions resulted in 552 sales. 537 sales in Droitwich Spa represents a slightly lower year on year reduction in activity of 16%.
Average house prices in Droitwich sit at £259k with Malvern at £250K. In Worcester, where 42.5% of the sales took place, the average sales price is significantly lower at £221K.,
The Lettings picture is similar with the average rent achieved in Worcester lowest at £545, Malvern is 28.6% higher at £701, 12.2% above the WR postcode area average of £625 with Droitwich Spa remaining highest at £731, 17% above the postcode area average. After a period of steady growth, based on the average figures over the last twelve months, growth has been maintained Malvern whilst both Worcester and Droitwich have dropped back slightly.
81,280 property sales were recorded in August 2020, 15.6% more than July but -16.3% lower than August 2019 (HMRC). Newly agreed sales per agent, in August, were 76% above the 5-year average, with the time to sell a home falling 31% (Zoopla). On average properties are taking 27 days to sell, down from 39 at the same point in 2019.
Rightmove report August 2020 was the busiest month on record, with sales agreed up by 20% on the previous record of March 2017. The number of properties bought to the market was also at its highest level since March 2008 as more movers enter the market. Record new buyer asking prices exist across many regions of the UK.
Two consecutive quarters of decline technically tipped the UK into a recession. On a month to month basis the UK economy grew by 6.6% in July, meaning the UK’s economy is now only 11.7% smaller than it was in February. Consumer spending in July was no more than 10% below its level at the start of the year, after falling between 30% to 40% during lockdown. Flash UK composite PMI, reflecting economic trends in manufacturing, hit a five-year high in July, pointing to wider recovery in the economy.
The August sentiment survey by Royal Institution of Chartered Surveyors (RICS) gauging the mood of agents, showed improvement in the lettings market. Tenant demand has continued to increase and short-term rental growth is expected.
Tenant demand has continued to rise sharply following a large decline during lockdown. A net balance of +49% of agents report an increase in tenant demand in August.
Increased demand and low supply means that agents are expecting rents to rise in the short term. A net balance of +31% of agents expect rental growth over the next 3 months, a similar percentage to pre-lockdown. Source: Dataloft, Royal Institution of Chartered Surveyors.
ONS reported a 1.5% annual increase in private rents in August. Agents are reporting an increase in tenant demand and positive short-term rent expectations, suggesting that many markets will be insulated from the end of the eviction ban and the furlough scheme.
With increased tenant demand and subdued landlord instructions, +31% of agents expect an increase in rent over the next 3 months (RICS).
COVID SECURE VIEWINGS
Nicol & Co operated safely and securely throughout lockdown and since the market reopened in May. We have Covid Secure policies and procedures in place to ensure we can continue to operate safely by reducing social contact and the risk of spreading the virus.
If you have any questions please contact us.