Worcester & Droitwich Market Update – June 2019
LOCAL MARKET ROUNDUP
On a seasonally adjusted basis, latest figures from the HMRC show the number of homes sold in April 2019 in the UK has risen by 0.8% compared to April 2018.
A total of 99,420 households across the UK thought it was a good time to sell their homes, according to the provisional, seasonally-adjusted figures on transactions.
This indicates that confidence in the housing market is slightly higher than it was at the same time last year. It is possibly also a sign that households are fed up of waiting for the uncertainty surrounding the prolonged Brexit process and are making decisions about their house move. Nearly half (49%) of major UK towns and cities witnessed a boost in new property listings in the latter part of April following the announcement of the Brexit extension. New listings in April were up by 0.8% from March according to the latest Housesimple’s Property Supply Index and the West Midlands market continues to perform better than most.
NATIONAL MARKET
Average house price growth slowed to 0.6% in the year to February, down from 4.4% a year ago. Prices are still rising though in some regions, most notably in the North West and West Midlands.The OBR has revised down their expectations for house price growth in 2019. They now anticipate a 0.3% fall in 2019. By 2021, they expect prices to be rising again by 4%.
Annual property price growth in all of the UK’s top 20 cities was in positive territory in January, for the first time since August 2015 according to Hometrack. Price growth is expected to moderate to levels closer to wage growth across many regional cities during 2019.
ECONOMY
The UK economy grew by 0.5% in the first quarter of 2019, up from 0.2% in the previous three months according to the ONS. The manufacturing sector grew at its fastest rate since 1988 driven by manufacturers stockpiling ahead of Brexit.
Inflation rose to 2.1% in April, higher than the Bank of England’s 2% target but lower than the predicted 2.2%. The ONS report a rise in energy prices is the main contributor to the increase. Although wage growth tightened in March, average wages continue to rise more strongly than inflation.
UK employment is at its highest level since 1971. The ONS report 32.7 million people aged 16-64 were in employment in the three months to the end of March. Unemployment fell to a record low of 3.8%.
LETTINGS MARKET
Average rents paid by UK private tenants grew by 1.2% in the year to April, unchanged from March. Rental growth remained unchanged in five out of ten regions across England and Wales, annual growth rising marginally across the North East, North West and South East.
There were just 5,000 new buy-to-let mortgages issued in March down 9.1% on a year ago according to UK finance. Higher property taxation, loss of interest tax relief and a slowdown in house price growth continue to hit the investor market.
With demand levels remaining firm while the availability of properties to rent continues to decline, the RICS project that average rents will rise by around 2% in the next 12 months and increase to 3% per annum over the next five years.
Over the last 12 months, the average rent achieved for properties let in Worcester was £643 per month. This is a +6% change on the previous 12 month period.
35% of properties let in the past 12 months were flats, achieving an average rental value of £595 per month. Houses achieved an average rent of £758 per month.