Worcester, Droitwich & Malvern Market Update – October 2023
COMMENT
On the back of the recent news that the base rate is remaining at 5.25%, there is some more good news for borrowers.
The number of mortgage products available has risen to 5,338, its highest level since February 2022, and more than double the availability seen in October 2022.
The average shelf life of a mortgage deal has stabilised, increasing to 15 days, up from lows of 12 days in July, as lenders reduce their rates to compete for business. Now is certainly the time to be taking advice from a mortgage broker that has access to the whole market, like those we recommend.
Some industry figures suggest that the base rate decision implies that peak of the rate cycle has been reached and mortgage rates could begin with a four by the start of next year. In fact, at the time of writing, the lowest rate available for a 75% LTV 5-year fixed mortgage is now 4.94 per cent.
The timing of this news is also good, given that the holidays are over and the kids have gone back to school. As we see more property coming to the market, there is more choice for buyers.
Key to a successful sale at this time is the realistic pricing of your property when it first comes to the market. This ensures you’re attracting the attention of the buyers who are active in the market right now. If you’re considering a move, we recommend that you register with us and start looking to see what’s available within your budget. Let us help you look at your options and make the most of the opportunities that are going to be available.
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 30th June 2023, reveal that there were 32% fewer sales in Worcestershire than the previous 12 months, when the transaction numbers were boosted by stamp duty incentives. The actual number of transactions was 3612. Sales in Worcester were down 27% at 1573. Malvern was down by 24% at 546 and Droitwich down 20% at 434.
Over the last 12 months, transaction values varied across the county, but all have shown growth. Malvern’s average transaction remains highest at £317,112 up 5% with Droitwich next at £292,471 up 4%. In Worcester, where 43.5% of the sales were recorded, the average sales price increased by 5% to £256,367.
The increases in average sales price over the last five years are shown below:
Across the WR postcode area, the average rent for homes let over the last 12 months increased by 6% to £845. 40% of the properties let were flats, achieving an average of £709 while houses achieved £973 per month. The average rent for properties let in Droitwich is £767, 9% lower with flats here averaging £567 and houses £931 (4.3% lower than the wider average). In Malvern, the average rent on homes let in the last 12 months was 1% lower than the average at £835. 46% of properties were flats, achieving an average of £766 per month while houses achieved £919 per month. Worcester remained just 3% below the average at £820.
Source: Dataloft Market Rental Analysis (rental data is limited and based on achieved rents for approximately 10-15% market share, depending on location).
NATIONAL MARKET
The HMRC report that 86,500 sales took place in July. This is a mild improvement on the previous month (up 0.8%). Compared to last year’s higher levels however, this is notably lower (-16.3%).
Mortgage approvals have improved since the start of 2023 but remain a margin below typical levels. In the year to July, approvals averaged 51,600 a month, 21% below the average for the 7 years prior to the pandemic.
The average price for a property in July was £289,824, up 0.6% year-on-year and 0.5% on the previous month (ONS). The average asking price of a newly marketed property this month is £366,281, a marginal increase of 0.4% (Rightmove).
Three-quarters of buyers in August were confident they’d purchase a property within the next three months, whereas 61% of sellers were confident they would sell their property within the same time frame (OnTheMarket).
ECONOMY
The Bank of England has held base rates at 5.25%, ending a cycle of 14 consecutive rate rises.
For July 2023, monthly real gross domestic product (GDP) is estimated to have fallen by 0.5%, with falls in all three main sectors following growth of 0.5% in June 2023.
Inflation fell to 6.7% in the year to August, down from 6.8% in July, the third month in a row that the figure has dropped. Slowing food prices helped drive the fall (ONS).
LETTINGS MARKET
At 5.5% in August, annual growth in rental prices in the UK is at its strongest since records began. The Index of Private Rented Housing Prices reports on both new lets and renewals. The average rent on newly agreed rental contracts reached £1,261 in August, a 10.3% year-on-year increase (Homelet).
The supply of homes available to rent is 30% below average for this time of year, while demand from tenants is running 51% above the five-year average (Zoopla).
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.
