Worcester & Droitwich Spa Market Update – March 2019
LOCAL MARKET ROUNDUP
I’m looking forward to be able to begin our monthly market update with something more uplifting than the impact of Brexit uncertainty. I hope that we really don’t have too much longer to wait now. Roll on April.
Still looking ahead the key indicators, required to support a healthy market, all seem to be in place. Inflation is low, employment is high, wages are growing, banks and building societies are lending, mortgage repossessions are low and demand remains steady, with over 600,000 renters in the market also wanting to buy at some point over the next five to ten years.
Bricks and mortar will always perform well, over the long term, although if you asked the shareholders of the ‘purple variety’ this week they might be giving you a new definition of ‘commisery’.
Not wanting to gloat, at the rate Purple Bricks are burning their cash, it is nonetheless heartening to hear even they are willing to accept that ‘no sale no fee’ is the most popular model – worldwide.
As a progressive local agent we have built our award winning business on that basis believing passionately that this is the case. We, have chosen to harness the benefits of technology, such as our Matterport™ Tours, to market our clients properties in a more interesting way rather than focus on costs and fail to get the best price.
There is nothing wrong with the colour though!
NATIONAL MARKET
House price growth across the UK’s top 20 cities was 2.7% in the year to December, less than half the annual rate over the last five years, according to Hometrack. However, half the cities have recorded double digit price growth since the Brexit vote in June 2016, Birmingham and Manchester topping the league.
Over the next 12 months, at the national level, the RICS expect prices to remain fairly stable. When looking at at regional level, they expect price rises in all regions with the exception of London and the South East.
ECONOMY
The UK economy contracted in December and grew by just 0.2% in the final quarter of 2018 according to the Office for National Statistics. At 1.4%, annual growth in GDP is at its lowest level since 2012. The Bank of England predict growth of just 1.2% in 2019, the lowest level since the financial crisis.
The rate of inflation fell to 1.8% in January, its lowest level in two years, thanks in the main to energy prices being lower than a year ago. Inflation peaked at a five year high of 3.1% in November 2017, last hitting 1.8% in January 2017. If a Brexit deal is secured, inflation is likely to remain below the Governments’ 2% target.
UK employment hit a record high in December. 32.6 million people aged 16-64 were in employment, the equivalent of 75.8%, the highest proportion since 1971. Average wages, excluding bonuses also rose by 3.4% in the three months to December, significantly outpacing inflation.
LETTINGS MARKET
Over the last 12 months, the average rent achieved for properties let in Worcester was £630 per month. This is a +4% change on the previous 12 month period.
In the year to the end of January 2019, average rents across the UK rose by 1.0% .
The Tenant Fees Bill has received Royal Assent. From 1st June landlords and agents will only be able to recover reasonably incurred costs from tenants, and must provide evidence before they impose any charges. Deposits will be limited to a maximum of 5 weeks rent on properties let for under £50,000, with a cap of one weeks rent on holding deposits.