Chichester property market May/Jun update

WRITTEN BY PMS LETTINGS COVERING THE CHICHESTER PROPERTY MARKET CHICHESTER MAY/JUN 2016 PROPERTY MARKETUPDATEIN THIS ISSUEThe EU Vote and the I have just over \"I can't afford to buyChichester Property £300,000 inheritance. in Chichester!\" IsMarket Should I buy a that really the case? Chichester property?Essential reading for Landlords and Property owners

TheCahEniUdchteVhsetoetreProperty MarketIf you read all the tabloids, the ‘Brexit’ debate seems to Post vote, should the UK opt to leave Brussels, therebe focused solely on central London. Many would be a much more noteworthy impact. Wecommentators have said Brexit would mean central believe that a vote to stay in the EU would see theLondon would have a lower standing in the world, Chichester property market return to a status quo verymeaning less people would be employed in Central quickly, but the contrasting result could lead to someLondon, with the implication of lower wages, fewer jobs changes. The principal menace to the Chichester, andetc… but we are in Chichester, not Marylebone, Mayfair UK, housing market could be an upward variation inor any part of Zone 1 London! interest rates as a result of a Brexit, which could theoretically see the cost of mortgages grow swiftly,Now, on the run up to the vote on the 23rd of June, we pricing many out of the market… but then two thirdspredict the ‘in’ camp will start to scare homeowners with of landlords buy without a mortgage, so that won’tforecasts of negative equity, and the ‘out’ camp will affect them.appeal the 20 somethings, who have been priced out ofthe property market with the prospect of a new era of So in reality, if we really knew what will happen, weinexpensive housing, should the fears of central London wouldn’t be a letting agent in Chichester, but a Cityestate agents and developers, who believe the bottom Whiz Kid in London earning millions. However, wewill fall out of the market if we do leave, become real. suspect whatever decision the electorate of ChichesterThe only reason the Mayfair’s, Knightsbridge’s, and and the country as a whole makes, over the long termKensington’s of central London are attractive to foreign it won’t have a major effect on the Chichester propertybuyers are political and economic steadiness, an open market. We have seen off ‘the end of the world’ creditand honest legal system and a lively cultural life. None crunch of 2008/9 and subsequent property crash, theof that is threatened by Brexit. 1988 Nigel Lawson induced post dual-MIRAS property crash, the 1979 Winter of Discontent property crash,…But again, we are in Chichester and central London is the 1974 oil crisis that stimulated another property80 miles away. We are home to the Chichester Harbour, crash… hell, we can even go back nearly a century withthe Chichester Festival Theatre and Tim Peake, and the 1926 post General Strike slump in propertywhilst the central London property market exploded prices…after 2009, that explosion really and honestly didn’taffect the Chichester property market. So, putting Today, property prices are 272.14% higher than 21central London aside, what would an ‘in’ or ‘out’ vote years ago in Chichester and are 8.8% higher than 12really mean for the 7,400 property owners of months ago. So, make your own decision on 23rd ofChichester? June 2016 safe in knowledge that whatever the result, there might be some short term volatility in theInitially, over the coming months, on the run up to Chichester property market, but in the long term –referendum, we believe it will be like the run up to last and property investment is a long term strategy –year’s General Election. With the short-term uncertainty there aren’t enough houses in Chichester to live inin the country, quite often, big decisions are put on ice either to buy or rent… and until the Government allowand people are less likely to make big money purchases more properties to be built – the Chichester propertyi.e. buy a property. However, in the four months up to last market, will be just fine, even if it has a little blip in theyear’s Election, property values in Chichester increased summer! There could be some property bargains toby 2.96%, not bad for a country that thought it would get a be had later in the year!hung parliament! So that argument doesn’t hold muchweight with us.

I have just over £300,000 inheritance.Should I buy a Chichester property?We had an interesting email from someone in The bottom line is that the success of investing inChichester a few weeks ago that we want to share with Chichester buy-to-let property versus a savingsyou. In a nutshell, the gentleman lives in North account with the Post Office or whatever Bank orMundham, he is in his mid 60’s and still working. He Building Society is offering the best rate, will dependhas a decent pension, so that when he does retire in a on the performance of those assets. Unlike with acouple of years’ time, it will give him a comfortable life. savings account, with property the capital you investedHe had recently inherited just over £300,000 from an can also go up – and yes, it can go down as well – moreelderly aunt. One option he was considering was to put of that in second. Property values in Chichester haveit into a savings account. The best he could find was a 2 risen in the last twelve months by 7.6% meaning, that ifyear bond with the Post Office which paid 1.9%; our chap had bought a year ago, not only would hemeaning he would get around £5,795 in interest a year. have received the £13,877 in rent, but also seen an upliftOne of his other options was to buy a property in of £23,180 …meaning his overall return for the yearChichester to rent out and he wanted to know our would have been £37,057 – not bad when compared tothoughts on what he should buy, but he had concerns the Post Office!as he didn’t want to take a mortgage out at this time ofhis life. He was also worried about all the tax changes …but the doom mongers amongst you will say,he had read about in the papers for landlords. property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices hadNotwithstanding the war on Chichester landlords being bounced back to their ’79 levels by 1984 and went on towaged by the Government, the attraction of bricks and grow an additional 58% in the following four years.mortar endures for many. As our man is a cash buyer, Then again, they dropped in 1988 and did take 13 yearshe would not have to deal with the intricate cut to to reach back to those ’88 figures, but in the next sixmortgage interest tax relief that will diminish, or even years they then increased by an additional 66%. Now,eradicate, the profits of many Chichester landlords. It’s according to the Land Registry, average propertytrue he would face the extra 3% in stamp duty to buy a values in Chichester currently stand 12.2% above thesecond property, but with some good negotiation January 2008 level, and evidence suggests that in thetechniques, that could soon be mitigated. ‘nicer’ parts of Chichester, we are well above these sorts of levels.We told him that buying a Chichester buy-to-letproperty is all about the total return on investment. …and what would just over £300,000 get you inTrue, he could put the money in the Post Office bond Chichester? A really nice 3 bedroom house inand receive his interest of around £5,795 a year or, as he Baxendale Road, a stunning 3 bedroom terrace inrightly suggested, invest in property in Chichester. The Orchard Street, close to the city centre or a superbaverage yield (yield being the equivalent of the interest brand new 2 bedroom apartment in the Chichester cityrate on the property) at the moment in Chichester is centre …in fact, the world is your oyster. But which4.55% per annum, meaning our potential F.T.L (First Oyster?Time Landlord) should be able to, depending on whathe bought in the city, earn before costs £13,877 a year.letting a property? 92% talk to us of tenants search online Call us on 01243 788257 for their next rental

Rental Price Tracker -Regional Trends Star Buy-to-Let Area: Chichester Type: Apartment Price: £220,000 Rent: £895 pcm Return: 4.88%*Source - Rightmove This property is ideal for the professionals who need to be close IhaveusedPMSforanumber to Chichester station. It looks to be ofyearstofindTenantsformy in good decorative condition, it has parking and you can walk to the properties.Theyhave station and the town centre in a consistentlyintroduced matter of minutes. excellenttenantsveryquickly, withnofussandatavery You would achieve a rent for reasonablerate.Highly between £850 - £895 pcm and basing it on the higher figure, you recommended! would potentially generate a gross C.Barrington annual yield of 4.88%, based against the current asking price of £220,000. The property is on the market with Stride & Son and we suggest you call them (01243 782626) to get a viewing booked in. If you would like to discuss this property or any other potential buy-to-let investments, give us a call on 01243 788257 where a member of our team would be happy to help!

\"I can't afford to buy in A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday;Chichester!\" Is that really the latest iPhone upgrade or the latest 4K HD television. That amount could soon be saved if these ‘luxuries’ werethe case? withheld over a couple of years… but attitudes have changed.When our parents bought their first house in Chichesterin the 1960’s, they were in their early 20’s. Official figures, from the Office for National Statistics,Interestingly, looking at some research by the Post show the average male in Chichester with a full-timeOffice from a few years ago, in the 1960’s the average job earns £598.60 per week whilst the average femaleage people bought their first house was 23. By the early salary is £477.00 a week, meaning, even if one of them1970’s, it had reached 27, rising to 28 in the early 1980’s. worked part-time, they would still comfortably be able to get a mortgage for an apartment.This year alone, 391 people in Chichester will turn 28and 504 in 2017… and dare we say 677 in 2018… year in We were reading a report/survey commissioned byyear out the conveyor belt carries on… so where are the Paragon Mortgages from the autumn of last year. TheChichester youngsters going to live? thing that struck us was that when tenants were asked about their long term housing plans, some 35% ofAsk a Chichester ‘twenty something’ and they will say participating tenants intend to remain within the rentalthey do not expect to buy until they are in their mid sector and 24% intended to buy a house in the future,thirties – seven years later than the 1980’s. Some people with the proportion of respondents citing theeven say they will never be able to buy a property and “unaffordability” of housing as the reason for rentingthe newspapers have labelled them ‘Generation Rent’ as privately increasing from 69% to 74%.they are people born in the 1980’s who have no hope ofgetting on the property ladder. One of the major However, time and time again, in the starter homeproblems facing young Chichester people is the large category of property (ie apartments), nine times out ofdeposit needed to get a mortgage… or is it? ten the mortgage payments to buy a Chichester property are cheaper than having to rent in Chichester. It is theThe average price paid for an apartment in Chichester tenant’s perception that they believe they can’t buy, soover the last 12 months has been £204,100 meaning our choose not to. Renting is now a choice. Tenants canfirst time buyer would need to save £10,205 as a deposit upgrade to bigger and better properties and move up the(as 95% mortgages have been available to first time property ladder quicker than their parents or grandbuyers since 2010) plus a couple of thousand for parents – albeit they don’t own the property. Over thesolicitors and survey costs. last decade, culturally in the UK, there has been a change in the attitude to renting so, unless that attitude changes, We expect that the private rental sector in Chichester – and the UK as a whole – is likely to remain a popular choice for the next twenty plus years. With demand for Chichester rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. We also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed.

Book your Expert 1:1If you'd like a 1:1 market valuation with an expert you can book NOW using this link: www.pmslettings.co.uk/free-rental-valuations/Or call our hotline: 01243 788257 and a member of our team will get you booked in!