Worcester, Droitwich & Malvern Market Update – September 2019
LOCAL MARKET ROUNDUP
Over the last 12 months there have been 5,001 sales across this area. The local markets of Droitwich Spa and Malvern, where Nicol & Co will soon be opening their third office, have seen similar levels of activity with 613 and 673 respectively.
They also have very similar average prices, close to £250,000, however, in Worcester where over 40% of the sales took place the average sales price was 11.5% lower at £220,826.
The Lettings picture is slightly different with the average rent achieved in Worcester and Malvern being similar at £603 and £670 per month respectively; Droitwich is nearly 30% higher at £819. Rental growth of 5,6 and 11 percent has been seen over the last 12 months.
In June, there were just under 70,000 new mortgage approvals according to UK Finance, which is 5% higher than the level reported in May.
Loans to first-time buyers (comprising 47% of approvals)were once again greater than those to existing homeowners (45% of approvals). First-time buyer loans rose by 6.2% in the month. Lending to buy-to-let investors has remained consistent over 2019, comprising just 8% of approvals in June.
One of the challenges that buyers face after having agreed their purchase is the delay in actually moving in. The number of properties sold subject to contract and in the legal process is at its highest level since June 2014. Recognising this as an issue investment in our Ready to Sell service and having two full-time Sales Progression staff ensures we stay on top of each transaction and any delays are kept to an absolute minimum.
Rightmove Director and housing market analyst, Miles Shipside, recently commented “Surprisingly there seems to be a bit of a summer buying spree, despite it normally being a quieter time of year; perhaps more buyers have cottoned on to the fact that it can be a good time of year to buy, with less competition from other buyers, and sellers typically more willing to accept a lower price.The number of sales being agreed is up by 6.1% compared to the same month a year ago, helping to make up for the slower start to the year. All regions have seen an increase in volumes year-on-year, with three having increases above 10%. The uplift in sales activity is biased towards the east coast, with the North East up by 13.6%, East of England by 12.7% and Yorkshire & the Humber by 10.1%.
Wages rose 3.9% in the three months to June, the highest rate of growth since 2008 according to new figures released by the Office for National Statistics. Wage growth continues to outstrip inflation, inflation in June 1.9%, the same as May and down 0.1% on April. GDP contracted in the second quarter of 2019, this is the first time there has been a fall since 2012. Manufacturing output and construction fell, as well as the trade deficit narrowing, this is following a sharp rise at the beginning of 2019, due to the UK’s original departure date from the EU.UK employment remains at its highest level since 1971. The ONS report 32.76 million people aged 16-64 were in employment in the three months to the end of June. The number of self-employed part-timers has increased to over 1.5 million, more than double 25 years ago.
The rental market is about to enter its busiest time of the year. Analysis from Dataloft Rental Market Analytics reveals that, over the last three years, on average 22% of each year’s tenancies have begun during August and September. We estimate that this equates to just under 200,000 new tenancies, which are set to begin over the coming weeks.
The flurry of activity at this time of year is a combination of students seeking accommodation before term starts, new graduates beginning new jobs and families looking to settle into new homes before the next academic year. At the same time, there is also a surge in existing tenancies coming up for renewal around this time of year which further boosts competition for rental properties, should occupiers seek to move.
Average rents paid by UK private tenants grew by 1.3% in the year to June, unchanged from May. West Midlands and East Midlands were the only two regions to experience an increase in rental price growth in June.
According to the RICS, tenant demand had the strongest month since the end of 2016. At the same time, new instructions to let properties declined further (as has been the trend for the past three years) which continues to support rental growth.
Against this background, Landlords, with an established portfolio, are well placed to see an increase yields. If this is you, we would love to talk to you about how our locally run, fully managed service can provide professional support to help maximise your investment. Call us on 01905 675999 to arrange an appointment.