Worcester, Droitwich & Malvern Market Update – September 2022
COMMENT
With British sportsmen and women taking top spots on podiums at the recent Commonwealth Games and the European Athletics and Aquatics Championships, how would property fare against its key competitors?
Property continues to outperform them, pipping gold and UK share prices to the top spot based on price growth over the past year. Over the longer term, property has performed well. The average price of residential property increased by 65% over the past decade, compared to just under 40% for gold prices and 32% growth for the FTSE.
The 2021 Census has revealed that population and household growth across England and Wales has been unequal over the past decade. The population grew by 3.5 million between March 2011 and the 2021 census, and yet the number of households only grew by 1.4 million. The East of England and the South West have witnessed the strongest growth in both population and the number of households, but it is the East Midlands and London where price growth has been most significant. As more data becomes available from the 2021 Census, I will share this information with you.
In the meantime if you have any questions please don’t hesitate to contact us.
LOCAL MARKET ROUNDUP
The Land Registry is lagging behind with its updates but the latest available figures, for the year ended 31st May 2022, reflect the post pandemic market. 4030 sales in Worcestershire is 27% fewer than the previous twelve months, as a result of the previous year having been uniquely boosted by stamp duty incentives; 600 sales in Malvern is 28% lower and 1819 sales in Worcester is 22% down. 385 sales in Droitwich, is 40% down year on year and also below the pre-pandemic averages which had been inflated by large numbers of new build properties coming to the local market in the prior years.
The lettings picture has been fluctuating over the last twelve months, with an increase of 5% recorded in the average figure for Worcester. Flats, represent over 40% of the lettings stock in Droitwich where the average rent is £726, 7% below the Worcestershire average of £780. In Malvern, where 67% of the properties let in the last twelve months were flats the average monthly rent is similar at £777.
NATIONAL MARKET
HMRC report 104,470 sales were completed in July 2022. Revisions to data published last month now show sales have been over 100,000 in every month so far in 2022.
UK house price growth in the year to June was 7.8%, although a moderation on figure reported in previous months, this compares back to June 2021 when prices were impacted due to the Stamp Duty Holiday.
The average asking price of a newly marketed property fell by 1.3% in August. This is in line with seasonal activity seen over the past 10 years and represents the first monthly reduction in 2022 (Rightmove).
On average, in July, properties sold, subject to contract, in just 33 days. At present however it is taking an average of 136 days (4.5 months) to complete a sale (Rightmove).
ECONOMY
The Bank of England raised the base rate of interest to 1.75%, as the cost-of-living squeeze continues. At 10.1% in the year to July, inflation is in double digits for the first time since 1982 (ONS).
Average wages rose by 4.7% between April and June, however with inflation rising at a faster rate the ‘real value’ of pay fell by 3%. The difference between wage growth in the public and private sectors is at its highest in 20 years (ONS).
The UK economy shrank by 0.1% in the three months to June, the decline compares to growth of 0.8% in the first quarter (ONS). The reduction was less than the 0.3% decline forecast by analysts.
LETTINGS MARKET
At 3.2% UK annual rental price growth is at its strongest rate since records began. Rental price growth continues to rise across much of the UK (ONS).
Rightmove have revised their rental price forecast upwards. Average rents are likely to rise 8% over 2022, up from the previous forecast of 5%. Asking rents increased by 3.5% in Q2, as demand continues to outstrip supply.
Tenant demand continues to rise but the pace is moderating. RICS report a net balance of +36 of respondents reported an increase over the past quarter. August and September are usually the busiest months for rental activity.
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.
COMMUNITY
If the pandemic has taught us anything, it is the value of community and who the real heroes are. Whilst it has been a difficult time for many of us, our key workers, teachers and volunteers consistently stuck to their tasks. Like many, we really admire this commitment and want to continue to support them by donating £100 from every sale we make again this year. So far, we have donated over £25,000 to schools and local organisations through our Community Fund. If you know of an established community organisation or local charity, based in Worcestershire that you feel should be on the list, of potential beneficiaries, please write to us and tell us why. Contact: [email protected]