Comment

The Autumn market is showing strong momentum, driven by robust conditions and a positive response to the August Base Rate reduction. Asking prices for new listings have increased by 0.8% this month to £370,759, a rate that is double the long-term September average. August saw house prices rise by 0.3%, with annual growth reaching 4.3%, the fastest since late 2022.

In fact, 37% of property professionals expect sales prices to rise in the next three months, and forecasts for 2024 predict a 1.4% house price increase, an optimistic shift from last year’s predicted decline of -2.2%.

This early surge in market activity is a result of several factors: mortgage rates trending downward, an increase in property choice, and the release of pent-up buyer demand. Property transactions in July totaled 90,630, reflecting a 5% increase year-on-year, while sales agreed have risen by 23% over the same period.

Buyer confidence continues to strengthen following the Bank of England’s rate cut, supported by a downward trend in mortgage rates.  Mortgage approvals were up 26% year-on-year, with 61,985 approvals in July. The lower base rates have led to competitive offers from lenders, with some now allowing buyers to borrow up to 5.5 times their salary, making it easier for many to step up the property ladder.

On the supply side, the market is seeing positive changes as well. New listings are up by 14% compared to last year, and the number of available homes per estate agent has reached its highest level since 2014, providing more options for buyers.

Despite the increase in supply and demand, some value-conscious buyers are still taking their time to find the right home, with the average property taking 60 days to sell.

Current market conditions are favourable for both buyers and sellers. With competition for properties expected to intensify, now is an ideal time for those considering a move to take advantage of these opportunities.

Sources: Bank of England, Rightmove, Dataloft by PriceHubble, ONS, UK HPI, Zoopla, Halifax.

Local Market Roundup

 

The latest Land Registry data for the year ending June 30th, 2024, reports 3,097 property transactions across the WR postcode area, a decrease of 31% compared to the previous year. In Worcester, the number of transactions dropped by 30%, totalling 1,377. Malvern experienced a slight decline of 31%, with 463 transactions recorded, while Droitwich saw a decrease of 37%, bringing its total to 347 transactions.

In the WR Postcode area, the average sales price over the past year for both houses and flats was £291,364. Houses, which made up 86% of sales, had an average price of £321,493. Flats, comprising 14% of transactions, had an average price of £155,440. Regionally, Malvern’s average transaction value held steady at £319,127. Droitwich experienced a slight 2% dip, lowering the average to £277,923, while Worcester’s average transaction value decreased by 2% to £258,879.

The increase in average sales price over the last five years is shown below:

Over the past 12 months, the average rent for let properties in the Worcestershire area reached £868 per month, marking a 5% increase compared to the previous year. Flats, which made up 40% of the rental market, had an average rent of £723 per month, while houses, accounting for 60%, averaged £1,014 per month.

In Droitwich, the average rent was £801 per month, with flats renting for £651 and houses for £1,116. Malvern saw an average rent of £893 per month, with flats at £828 and houses at £926. Meanwhile, Worcester’s average rent remained at £855 per month.

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

For the year ending July 31st, the average price of property rose by 2.2% year-on-year, reaching £289,723. According to HMRC, July 2024 saw 90,630 property transactions, marking a 5% rise compared to July 2023. This increase in transactions and property prices highlights a continued recovery in the market, driven by a mix of increased buyer activity and a competitive market environment.

Economy

On 19th September, the Bank of England confirmed it would maintain the base rate at 5%, with speculation that a rate cut may occur in November. Forecasts suggest the base rate could fall to 4.75% by the end of the year, offering some relief for borrowers. This decision came just a day after it was reported that UK inflation grew by 2.2% in August, the same growth seen in July, and signalling that inflationary pressures are stable.

We now await the Autumn Budget on the 30^th October which will be held by Rachel Reeves. Although Labour had promised no additional tax rises, It is thought the budget may introduce a mix of tax increases, particularly affecting wealthier buyers and property investors, while offering some relief to first-time buyers.

The specifics remain unclear, but we will provide updates through our market updates and social channels, as more information becomes available

Lettings Market

In August, the average UK rent rose to £1,325, reflecting a 5.1% increase compared to the same period last year (HomeLet). The average void period also saw a slight increase to 15 days, up from 11 days in July.

The rental market remains buoyant due to high demand and limited supply, with 25% fewer rental properties available in 2024 compared to 2019. This supply-demand imbalance is expected to drive rents up by 3-4% throughout 2024, with similar trends likely to persist into 2025.

As of September 2024, the government has introduced a new piece of legislation called the Renters’ Rights Bill. While it still needs to clear a few hurdles and undergo amendments before becoming law, the bill marks a significant step forward. Interestingly, it mirrors much of the Renters’ Reform Bill, proposed by the Conservative Party the year before, though with notable changes.

If you’re a landlord with questions, our experienced lettings manager, James, is here to offer valuable insights and support. James has also recently released his book, Home, a comprehensive guide for current landlords and those looking to invest in property. You can purchase a copy, available in both paperback and Kindle, by clicking here.  

Market Insight

 

This market update draws from a range of trusted sources to provide you with clear, evidence-based insights to guide your property decisions. Our team is committed to staying updated on latest market trends and legislative changes, ensuring you have the most current and relevant information.

With ongoing shifts in market conditions, mortgage changes, the October budget and upcoming changes like the Renters Rights Bill, we are here to help you navigate these developments with confidence. We also offer expert advice through our network of mortgage advisors to assess the feasibility of moving or re-mortgaging, tailored to your unique needs and to support you in making those important decisions. For more information, click here. 

Feel free to reach out to us anytime. We’re here to assist you in making informed property decisions and navigating your property journey. For the latest updates and insights, connect with us directly through our website or follow us on social media.