Worcester, Droitwich & Malvern Market Update – October 2021
COMMENT
Property continues to rise in value. An average of independent forecasts predicts prices will end the year 5.8% higher than at the start. Properties are selling quickly and the majority of agents expect prices will continue to rise over the next 12 months, according to the latest survey by RICS.
There were 140,000 more sales agreed in the first half of the year and 85,000 fewer new listings than the long-term average. This imbalance created a 250,000 shortfall of homes for sale.
Annual price growth has moderated since the double-digit figures evident in May and June, however the search for space continues to drive demand. Working from home, at least part-time, is a lasting legacy for many of COVID-19. An average of independent forecasts produced to date in 2021 suggests prices will rise by 3.9% over the course of 2022.
What I said last month holds good, and if you are contemplating a sale, now would be a very good time to achieve excellent results so why not give us a call?
LOCAL MARKET ROUNDUP
Over the last twelve months, there have been 4181 sales in Worcestershire, reflecting the impact of COVID-19, 7% less than the previous year. 20% fewer transactions in Droitwich resulted in 487 sales and 618 sales in Malvern actually represents an increase of 1% year on year.
Average house prices have increased across the county with Malvern rising to £281K and Droitwich similar at £276.4k. In Worcester, where 42.9% of the sales took place, the average sales price is now 12.4% lower than the neighbouring towns at £242.1K.
The lettings picture has been changing over the last twelve months with a 6% increase in the Worcester average to £733. Malvern is now 14.3% higher at £838, 10.9% above the overall Worcestershire average of £756, which has risen by 6%; Droitwich Spa, which continues to show healthy growth, remains highest at £896.
NATIONAL MARKET
Over 1 million property transactions have taken place across the UK in the first eight months of 2021, higher than the number of sales during the entire year last year. The HMRC estimate 98,300 sales took place in August as the final SDLT reduction deadline, of 30th September, approached . According to Rightmove this was the busiest first half of a year ever.
ECONOMY
The UK economy grew by 0.1% in July, its sixth consecutive month of growth although growth slowed significantly from the 1% recorded in June. Output in the service sector remained broadly unchanged, the construction sector contracting by 1.6%.The number of job vacancies in the UK has risen above 1 million for the first time since records began in 2001. There were 1.03 million vacancies recorded in the three months to August. The ONS also report employee numbers are now back to pre-Covid levels.The ONS report inflation rose to 3.2% in August, price rises recording a record jump. The rise is expected to be temporary and is partly the result of food costs soaring compared to a year ago when the Eat Out to Help Out Scheme was in place and many diners received a 50% discount on meals out.
LETTINGS MARKET
Rental values are rising at their strongest pace in three years. Average values across the UK, excluding London, rose by 2.0% in the year to August (ONS). Rental values across the capital continue to buck the trend, 0.4% lower year-on -year.
According to the RICS July sentiment survey, tenant demand rose for a fifth straight quarter, with a net balance of +52% of respondents noting a rise in demand.
RICS survey participants continue to envisage rental growth over the next 12 months, with headline projections standing at 3%.
The average rental values for Droitwich and Malvern, shown in the market roundup overleaf, reflect both an older tenant profile and increases in the average rents for flats of over 30% due to very strong demand and limited supply.
COMMUNITY
The last eighteen months have taught us who the real heroes in our community are. It has been a difficult time for many us but our key workers, teachers and volunteers have just soldiered on. We so admire their commitment that we want to continue to reward it by donating £100 from every sale we make this year. If you know of an established community organisation, in Worcestershire, that you feel should be on the list of potential beneficiaries please write to us at community@nicolandco.co.uk and tell us why.