As the second most expensive corner in the South West, Bath remains one of the most desirable places to live in the UK. The picture postcard city, surrounded by rolling countryside, offers something for everyone: grand Georgian homes, a city centre full of life and ingrained links to the capital and beyond.
Sales
Perhaps unsurprisingly, Bath’s splendour continues to draw new residents to the area. So far this year, 20% of buyers in Bath came from the capital. Prior to the pandemic, this proportion was closer to 7%.
However, these Londoners are not alone. More than 60% of buyers this year came from outside of Bath and North East Somerset, with one in ten moving from neighbouring South Gloucestershire.
With an average price of £477.980, Bath and North East Somerset, has retained its place as the second-most expensive local authority in theSouth West, just £5k behind The Cotswolds. Prices have increased significantly across the city due to strong demand for family homes and the comparatively low stock levels.
Like many other areas, houses have outperformed flats. And for the first time ever, the average price of a semi-detached home in the city crossed the £500k mark this year.
Bath properties have also gained ground on London. The average home in Bath now costs £99k or 15% less than one in the capital, down from a 20% gap a decade ago.
The pace of the market has meant that homes in Bath have sold faster than ever. The average home in the city had a sale agreed in just 45 days, 19 days less than last year. Although, delays in conveyancing meant the average home took eight days longer to reach completion than last year at an average of 114.
Looking ahead, however, there are risks on the horizon as the economy weakens and rising interest rates suppress how much buyers can afford to pay. But given the city’s popularity with older downsizers, an affluent demographic and the fact that two thirds of Bath buyers are purchasing with cash, mean its housing market has the potential to weather any storm better than most.
Lettings
For the last 15 consecutive months, rents in the South West have seen double-digit growth. Driven by the increased demand for family homes with space for an office, rents in Bath have matched this pace too.
Since Covid, tenant’s priorities have changed. Requirements for garden space and extra rooms remain at the forefront of people’s minds.
The market’s response to this has been a 10.0% increase in the cost of two-bed homes for the professionals needing an office and a 12.2% increase for four-bed family homes with the garden space to live and play in.
Existing supply issues have been compounded by tenants signing longer tenancies as well as more sitting tenants renewing, rather than moving. This has put pressure on rents and has also meant that more tenants have had to search further afield for their new homes.
Looking ahead, we expect rental growth to cool as the year progresses. This is mainly due to the cost-of-living squeeze, which will weigh on how much tenants can afford to pay.
By the end of the year, we forecast rents to be rising around 7% in the South of England, outpacing the wider average across Great Britain.
