Worcester, Droitwich & Malvern Market Update – September 2023
COMMENT
Over 8.1 million owner-occupiers in England and Wales now own their homes outright. This represents more than half of all owner-occupiers and nine out of ten of those aged 65 or more.
Based on sales price data from the Land Registry, downsizing from a four or more bedroom home to a two-bedroom apartment could release, on average, over £250,000 (although the amount varies by region).
While freeing up under-occupied homes will certainly help ease some of the housing stock issues in the market, downsizers would also benefit from reduced ongoing costs and, in many cases, could be left with a large pot of equity.
Such equity may be used to help children onto the housing ladder, purchase an investment property or a holiday home, take a holiday of a lifetime or boost the pension pot (in which case independent financial advice should always be sought).
Similarly, when it comes to considering downsizing, not only will you be emotionally attached to your home but it’s likely to be your largest financial asset, so taking advice from a local property expert is essential.
The award-winning team at Nicol & Co are all familiar with life in Worcestershire. This means they’re well placed to offer relevant advice and connect you with trusted specialists you may also need to speak to before making a move. We’re here to help, so why not give us a call?
LOCAL MARKET ROUNDUP
The latest available Land Registry statistics, for the year ended 31st May 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 3067. Sales in Worcester were down 35% at 1565. Malvern was down by 28% at 566 and Droitwich down 29% at 420.
Over the last 12 months, transaction values varied across the county, but all have shown growth. Malvern’s average transaction remains highest at £312,500 up 6% with Droitwich next at £296,200 also up 6%. In Worcester, where 43.4% of the sales were recorded, the average sales price increased by 7% to £260,400.
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, has increased by 7% to £844. 40% of the properties let were flats, achieving an average of £709 while houses achieved £969 per month. The average rent for properties let in Droitwich is £757, 10% lower overall with flats here averaging £573 and houses £921 (5% lower than the wider average). In Malvern, the average rent on homes let in the last 12 months is 2% higher at £861. 44% of properties were flats, which achieved an average of £786 per month while houses reached £932 per month. Worcester remained closer to the average at £819.
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
HMRC report that over 85,000 sales took place in June. This is up 6% on the previous month and the highest number since March, although down 15.4% year-on-year.
While the number of mortgages approved in June was almost 7% higher than in May, the level of lending is considerably lower than a year ago according to latest data from the Bank of England. So far this year there have been 27% fewer loans approved compared to the same period last year.
Rightmove report a fall of 1.9% in average asking prices in the last month to £364,895, the largest fall since August 2018.
Over three-quarters (76%) of active buyers in July were confident that they would purchase a property within the next three months (OnTheMarket).
ECONOMY
Bank of England base rates were raised to 5.25% in August, the 14th increase in row, with the goal of curbing inflation. The Bank expects inflation to slow to 5% by the end of the year.
The UK economy grew by 0.5% in June, following a GDP fall of 0.1% in May and growth of 0.2% in April, taking the overall growth to 0.2% for Q2. Inflation fell to 6.8% in July, down 7.9% from June, its lowest level since February 2022. Core inflation remained unchanged at 6.9% (ONS).
LETTINGS MARKET
At 5.3% in July, 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.
A monthly rise of 1.1% took the average rent in the UK on newly agreed rental contracts to £1,243 in July, a 10.3% year-on-year increase (Homelet).
According to research by Savills, 75% of mortgaged buy-to-let properties have a loan-to-value of less than 60%, and one in three less than 50%. Only landlords leveraged at 80% or more have seen current profits move to negative territory.
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.
