Worcester, Droitwich & Malvern Market Update – September 2021
COMMENT
The UK experienced a 13.2% annual increase in house prices in June 2021. This is the largest annual increase recorded since 2004. The average price of a UK house now stands at a record high of £265,668, which is £30,965 higher than the same time last year.
All regions in the UK experienced an annual increase in house prices with the West Midlands recording a very healthy 15%. Asking prices have reached record highs across all regions of the UK (Rightmove) and price growth remains strong as demand continues to outpace supply. Source: Dataloft Demand Index, Bank of England, Rightmove.
Our own statistics show properties in Worcestershire have been selling in under three weeks, when supported by our marketing packs, with offers in excess of the asking price also being regularly achieved. When compared with what is considered an exceptional national average of 36 days this shows how strong the local market is with demand significantly outstripping supply.
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 4122 sales in Worcestershire, reflecting the impact of COVID-19, 11% less than the previous year. 22% fewer transactions in Droitwich resulted in 485 sales and 598 sales in Malvern represents a lower reduction in activity of just 4% year on year.
Average house prices have increased across the county with Malvern rising to £276K and Droitwich similar at £275.1k. In Worcester, where 43% of the sales took place, the average sales price is now 12.2% lower at £241.6K.
The Lettings picture has been changing over the last twelve months with a 6% increase in the Worcester average to £730. Malvern is now 10.8% higher at £809, 7.6% above the overall Worcestershire average of £752, which has risen by 5%; Droitwich Spa which continues to show healthy growth remains highest at £890.
Source: Dataloft Market Rental Analysis (rental data is based on achieved rents for approximately 10-15% market share, depending on location).
NATIONAL MARKET
The HMRC estimates nearly 200,000 sales took place in June, over twice the June average (2011-2019) as the Stamp Duty Holiday deadline approached. Over 100,000 sales have been recorded in each of the last nine months, June the highest monthly total ever recorded. According to Rightmove this was also the busiest first half of a year ever.
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. At 36 days, the time taken to sell a property (from marketing to SSTC) is 29 days shorter than at the start of 2021 (Rightmove). According to Rightmove buyer demand in the first week of August was up 56% compared to the same period in 2019 and down just 17% on the busy post lockdown period. The Dataloft Demand Index shows housing demand is currently 22% higher than a year ago, as housing market momentum continues to be buoyant.
ECONOMY
UK economic growth rose by 4.8% between April and June. The expansion in GDP was fuelled by retail, restaurants and hotels (ONS).The UK economy is predicted to grow by 5.75% in 2021, its highest rate in 70 years according to the latest forecasts by the Bank of England, the IMF has upgraded its forecast for 2021 to 7% (from 5.3% in April). The economy contracted by 10% during 2020.
The Bank of England predict inflation will reach 4% by the autumn, its highest level in a decade and twice the government’s 2% target. Interest rates remain at 0.1%.
LETTINGS MARKET
Average rental values across the UK rose by 1.2% in the year to July 2021, rents in the UK excluding London increased by 1.9%. Northern Ireland (3.4%), East Midlands (2.5%) and South West (2.5%) experienced the largest increase in rents (ONS).
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 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.