Chichester Property News

Thursday, 19 September 2019

Which month is busiest for Chichester’s estate agents?

September is often seen as a good time to sell property as the market is fresh from a summer holiday and busy with buyers looking to move in to a new home by Christmas. By looking at a monthly breakdown of property sales in Chichester for 2018, we can determine whether this is in fact accurate. It’ll also show which months are busiest for Chichester’s estate agents and whether there’s ever a good time for them to go on holiday!

Here’s the month-by-month property sales in Chichester for 2018:

January - 148

February - 136

March - 162

April - 129

May - 139

June - 187

July - 167
August - 182
September - 191
October - 177
November - 200
December - 171

So, November saw the highest number of property sales in Chichester compared to any other month in 2018. Bear in mind though that these figures (from Land Registry) are when a property sale is completed, rather than when it is first agreed between buyer and seller. With the legal process normally taking a couple of months, we can conclude that the highest number of sales are actually agreed in September.

Having looked at the figures for the past few years, I can confirm that the above pattern is typical of how the market flows throughout the year. It is reasonably steady throughout the year, rather than having wild ups and downs like some people might think. Things start off slow and build momentum as the year progresses, before tailing off again for Christmas and repeating the pattern into the darker, colder winter months.

As a side note, the totals above show there were 1,989 sales in the whole of 2018, which was 5% down compared to 2017, when 2,103 properties were sold in Chichester. Things slowed down even more at the start of 2019 though, with there being 18% fewer sales registered in the first third of the year compared to the same period twelve months prior.

Whilst the annual pattern may be the same then, it seems that Chichester’s property market, like much of the UK’s, is suffering from the general feeling of uncertainty. As the October 31st ‘Brexit deadline’ draws nearer, coinciding with the slowdown in the run-up to Christmas, it could be that Chichester’s estate agents are able to book some time off sooner rather than later and not miss out on too much of the action.

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If you are looking for an agent that is well established, professional and communicative in Chichester, then contact us to find out how we can get the best out of your investment property.

E-mail me on clive@crjlettings.co.uk or call 01243 624 599.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 16 September 2019

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £230,000, 5.1% yield

3 bed house, Spitalfield Lane, Chichester

Summary:
3 bed house in Chichester
Listed for sale on 04/04/19 @ £240,000
Now = £230,000
Rent = £975pcm
Yield = 5.1%

Having recently been reduced by £10,000, this is now the cheapest three-bedroom freehold property in Chichester. The thing is there's a reason for that, although to what extent is unknown. You see, the advert says it is "in need of some modernisation" but as there are no internal photos of the house at all, I fear how much there might be to do!

The EPC gives some indication here - with a lowest possible G rating and some outline details, like the fact there is electric heating rather than gas. So this property is definitely one that needs to be viewed to understand the works and costs necessary to get it up to standard.

It is in a good location though, close to both St Richard's Hospital and the city centre. Some of the properties along here are also student lets as it's close to the University, however I'd rather see it let to a family, for which you're likely to achieve around £975pcm when the property is done up. On this basis, the headline figure of a 5.1% rental return therefore seems very good for a freehold property, but of course there's (potentially a lot of) money to be spent before it is in a rentable condition (or is even legal to do so, requiring energy upgrades to get the EPC up to the legally required E rating).

Some landlords prefer to purchase properties they can rent out and start earning from straight away. There is certainly less risk involved with this approach, compared to buying a property that needs refurbishment and thus has the potential for cost overruns and time delays scuppering even the best laid-out financial projections. For someone prepared to take on a project though, this property could fit the bill.

It will be interesting to see whether the bathroom is moved upstairs and, in doing so, whether the three-bedroom house becomes a two-bed and the effect this happens on the end value; what would you do?

The property is on the market with King & Chasemore and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-80600330.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Thursday, 12 September 2019

Advice for landlords wanting a ‘let only’ service

Whilst many landlords will happily pay a letting agent to take care of everything, some landlords like to get stuck in and control as much of the process as possible, which leads them to a ‘let only’ service. This is where the letting agent finds the tenants and sets up the tenancy, before the landlord takes over the running of things from there.

Regardless of the service I’m instructed to undertake, my philosophy is always the same in regards to finding a tenant; it’s about getting the best tenant for the property, not necessarily the first one that comes along. That means finding ‘nice’ tenants who will pay the rent and look after the property and, where possible, who want to stay in the property long-term.

Unfortunately, some agents will do the minimum amount of work to get the job ‘done’; which to them means finding any tenant who’ll take the property. This is particularly true in the case of a ‘let only’ service whereby they may keep the better tenants for their managed stock, knowing that once they’ve moved tenants in on a let only basis they’re the landlord’s problem! Be sure you know who the tenants are and check their referencing reports to ensure you’re going to be comfortable dealing with them once they’re in your property.

Some unscrupulous agents have also worked out that by putting a short-term tenant in the property they won’t have to wait as long before being instructed (and paid) again to find the next set of tenants. Whilst the agent will make more money this way, the landlord will suffer from additional void periods and wear and tear from the greater churn of tenants.

You should watch out for agents with lots of similar (unlet) properties on their books and consider whether it is in their best interest to get your property let or the one across the street, which might start earning them a chunkier ‘fully managed’ fee.

A major reason landlords go down the ‘let only’ route rather than ‘fully managed’ is to save money. Unfortunately for these landlords they might be in for a shock when they next instruct an agent on a ‘let only’ basis, as the banning of tenant fees has seen letting agents greatly increase their price in this regard (many used to offer ‘let only’ very cheaply to landlords in the knowledge they would be in line for a big ‘admin’ fee from the tenants).

Be sure to check there aren’t any added costs or renewal fees tied into the service too. It’s a legal requirement for letting agents to list ALL the fees they will ever charge to landlords on their website, although I know a few who still aren’t doing this…

So, when it comes to choosing a letting agent, don’t be afraid to ask some tricky questions at their initial visit to weed out those in it for the short-term gain at the expense of your long-term pain!

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^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 9 September 2019

BUY-TO-LET DEAL OF THE WEEK: 2 bed flat in Tangmere, £210,000, 4.9% yield

Summary:
2 bed flat in Tangmere
Listed for sale on 08/04/19 @ £220,000
Now = £210,000
Rent = £850pcm
Yield = 4.9%
Last sold for £205,000 in 2016 (+2% in 3 years)

This two-bed flat in Tangmere is on the new Bader Heights development, which has offered up some decent 'second-hand' properties only 1-3 years after being built. This flat has just been listed with a second agent, having originally been marketed in April at £220,000. A recent £10,000 price drop and the addition of another agent indicates the owners are struggling to sell but are probably keen to do so. Having paid £205,000 in September 2016, it seems they might have to sell at an overall loss (factoring in buying and selling costs) three years later if they are to move on now.

The flat itself is a slightly awkward layout with long, narrow rooms with multiple angles to them. But overall it is a good size and being in such great, modern condition should attract tenants at around £850pcm. This would provide a very good 4.9% rental return, although when you factor in the service charges (£917 for 2019) and ground rent (£250pa) this drops to a more average 4.3%.

For a reasonably affordable entry into buy-to-let though, in a nice area that is becoming increasingly popular with tenants and buyers alike, this nearly new apartment could be a solid buy.

The property is on the market with Purplebricks and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-70992571.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Thursday, 5 September 2019

How low can interest rates go?

We may have gotten used to a new normal with an era of low interest rates, but the consensus that “rates can’t go any lower” has been blown apart by a Danish Bank who is offering the world’s first negative interest rate mortgage. This effectively means the bank is paying borrowers to take money off their hands!

And this isn’t some tiny bank trying to attract business through a sensational headline; this is Denmark’s third largest bank. They are offering 10-year mortgages at minus 0.5%; meaning borrowers make their monthly repayment as normal, but their mortgage balance will decrease even more than the amount they have paid. Another Danish bank has said they will begin to offer 20-year deals at 0% and even a 30-year mortgage at just 0.5%!

This has come about due to the rates on offer in the money markets, whereby the banks can borrow money at a negative rate and are thus passing this on to customers. It seems big institutional investors are happy to accept a small loss for the perceived security of lending money to a bank, rather than risking a larger loss by investing elsewhere.

It's also the reason that banks aren’t offering much interest on your savings - it costs them money to look after it and they make nothing from it! That has led to some banks gesticulating that they will have to charge savers to hold their money, rather than paying any interest at all. At the moment only the Swiss Bank UBS has taken this approach, charging wealthier clients 0.6% a year if they deposit more than €500,000.

Whilst no one seems to be predicting negative interest rates on UK mortgages yet, the banks are continuing to cut their mortgage rates. Five-year fixed-rates at 90% loan to value are available at 2.25%, whilst at 75% loan to value the interest rate drops to just 1.68%. Interestingly the cheapest buy-to-let mortgage at 75% loan to value comes with an interest rate of 2.17%; cheap by most standards, but still nearly a third more expensive than the equivalent owner-occupier mortgage.

Super low interest rates like these will add fuel to rising house prices. In fact, since the 1980’s the amount of interest payable on the average mortgage stayed largely the same, until the current decade when interest rates dived through the floor. This, however, doesn’t factor in the cost of repaying the loan amount, which is why many mortgage companies are extending both the age of people they’ll lend to, as well as the length of time the mortgage will last, helping to soften the monthly outgoing.

Whether we ever get to a stage of banks paying us to take out a mortgage is still unclear. But I do believe ultra-low mortgage rates are here to stay along with longer-term mortgages. If mortgage rates do rise it would spell the end of a 40-year pattern and would most likely lead to house prices reversing their historical trend too.

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^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Monday, 2 September 2019

BUY-TO-LET DEAL OF THE WEEK: 2 bed house in Tangmere, £227,500, 4.9% yield

Summary:
2 bed house in Tangmere
Listed for sale on 18/08/19 @ £227,500
Rent = £925pcm
Yield = 4.9%

Having let two very similar two-bed houses in Tangmere to this in the past week, I'm in a good position to say that tenant demand for such properties is strong and that this house should rent for £875pcm. It also has the bonus of a garage though, and that will add £50pcm to the value, meaning a total return of £925pcm. That would provide a very decent 4.9% rental return based on the asking price of £227,500.

There is some cosmetic work that needs doing to the property to be able to rent it; primarily decoration and a tidy-up of the garden, although you may want to check the state of the kitchen and bathroom too. The kitchen in particular is starting to look a little dated so it might pay to change this, although you could probably get another tenancy out of it first.

Interestingly at the end of last year a similar house on the street sold for £223,500, which had a downstairs cloakroom and a new kitchen. So whilst the price tag for this property compares well to what else is on the market, these houses have been available for less money in the recent past, whilst house prices have remained flat.

The fundamentals of double glazing and gas central heating are already there and Tangmere is growing in popularity, with their house prices catching up. A few years ago these houses were available for around £180,000, meaning they've increased a good 25% since then. The owner of this house bought it in 1997 for £58,950, meaning it has practically quadrupled in value in just over two decades! It seems unlikely house prices could repeat that trajectory again, unless this will be a million pound house by the year 2040!

The property is on the market with Bell & Blake and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-84070346.html

^{_{c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP}}

Sunday, 1 September 2019

Community Focus: Love Your Hospital

Love Your Hospital is the dedicated charity of Western Sussex Hospitals NHS Foundation Trust. Every year, they raise and invest more than £1,000,000 in grants to help ensure patients and visitors at St Richard’s, Worthing and Southlands Hospitals have the best possible experience.

Love Your Hospital is committed to:

1. Providing specialist medical equipment They invest in the very latest medical equipment which can speed up test results and diagnosis, reduce waiting times and limit the need for local families to travel outside the area for hospital care.

2. Transforming hospital facilities and spaces They support our hospitals by providing the best possible patient experience in the most conducive hospital environment, such as installing information screens, nuturing communal gardens and refurbishing clinical areas

3. Helping our nurses and doctors reach their potential They provide funding for additional education and training for medical teams to further develop their skills, share best practice with colleagues and continue providing the best possible care to patients.

Get involved! Love Your Hospital’s supporters are at the heart of their work and they couldn’t continue to provide vital funding to local hospitals without their help. Whether it’s to say “thank you” for outstanding care or simply because you love the NHS, get in touch with the Love Your Hospital team and find out about the many ways you can get involved and have an impact on patient care.

0800 028 4890

www.loveyourhospital.org

@LoveYourHospitalCharity

@Loveyourhosp

@loveyourhospital

@love-your-hospital

Welcome to the original blog about Chichester's property market.

Bringing you the latest news, information and analysis that relates specifically to the property market in Chichester.

Each week I'll feature the article I write for the Chichester Observer as well as my 'buy-to-let deal of the week': a property hand-selected by me that I feel could offer good investment potential.

I'm Clive Janes from CRJ Lettings in Chichester. I'm a landlord who continues to invest in local property as well as manage my own rental portfolio. In 2013 I setup CRJ Lettings not only to manage other landlords properties as if they were my own, but also to give some tips as to how to best go about investing in property.

If you'd like to chat about the local property market or see a potential deal and would like a second opinion, please get in touch:

01243 624 599

clive@crjlettings.co.uk