Chichester Property News

Monday, 21 October 2019

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Chichester, £165,000, ???% yield

Summary:
3 bed house in Chichester
Listed for sale on 07/10/19 @ £165,000
Rent = £???pcm
Yield = ???%

This week's buy-to-let deal is a bit of a wild card pick as it is an unmortgageable property in need of full renovation. But when a three-bedroom house in Chichester is listed at £165,000 it deserves highlighting, regardless of the property's condition. The fact it needs so much work and is available to cash buyers only will limit its market, but for those looking to take on a (pretty big) project, this could have potential.

The reason it's unmortgageable is pretty plain to see - there are several structural issues of varying degrees and it also doesn't have a bathroom (a bathroom and a kitchen are pre-requisites for mortgage companies to accept a property). The majority of these houses on the street have been converted into (very good sized) two-bedroom houses, by turning the third bedroom upstairs into a spacious bathroom.

It may turn out then that this three-bedroom house finishes up as a two-bedroom house, which is likely to be valued in the region of £275,000 and let out for £975pcm. But with the property in its current state and at its current price, this is the first buy-to-let deal ever where I haven't officially given the property a rental value or yield as it'll all depend on the end product and total spend.

One positive is that I think the council should agree the property is uninhabitable and undergoing major structural works, which under current rules means you work have to fork out council tax whilst the works are done.

There's a couple of open days to view the house and, a bit like an auction property, I expect these will be busy based on the attractive-looking asking price.

The property is on the market with Henry Adams and full details can be found on Rightmove via the following link:
https://www.rightmove.co.uk/property-for-sale/property-74802517.html

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}}

Thursday, 17 October 2019

How will Alice, Arthur and Jack afford a home in Chichester?

If you’re wondering who Arthur, Jack and Alice are, well they were the most popular baby names here in Chichester in 2018 - with 13 baby boys named Arthur and Jack and 8 baby girls named Alice. It’s nice to see Chichester’s new parents using their imagination a little, largely avoiding the most popular names in the UK; Jack was 5th and Arthur was 7th amongst the boys, whilst Alice was 24th amongst the girls.

What many of Chichester’s new parents will have in common though is the worry over how their new-borns will be able to afford a home in Chichester when the time comes. There’s two major sticking points when it comes to this - availability and affordability.

I’m often asked who’s going to buy all the new homes that are due to be built in and around Chichester; 300 in Westhampnett, 600 in Shopwhyke/Oving, 1,000 in Tangmere and 1,600 at Whitehouse Farm, to name just a few developments. Well, with 991 births in Chichester being registered in 2018, there are a lot of new humans who will one day want a home of their own.

With life expectancy increasing too, the overall population is rapidly growing - an additional 734 people were recorded as living in the Chichester district each year on average between 2001 and 2011. Meanwhile, despite some assuming the opposite due to the ongoing developments, there have been far fewer homes than this built in the area.

Already we can see the effects of this on the property market, with a lower amount of stock available and fewer homes being sold in Chichester. Unfortunately for the youngsters of today, this has helped buoy property prices, which remain stubbornly high here in Chichester.

I’ve written numerous times about the lack of affordability for local people when it comes to Chichester’s property prices. The average property price in Chichester stands at £373,648, which is 13 times the local average salary of £28,271 and puts them amongst the most expensive in the country. Even those who earn enough to afford a home will still need to come up with the money for the deposit (around 10%) and other costs associated with buying their own home.

Clearly this is restricting home ownership in Chichester, particularly amongst younger people. It is why I believe demand for rental property in Chichester is likely to remain high and landlords therefore have a duty to serve the community with safe and well-presented homes. Unless significant numbers of new homes are built quickly, or lending criteria softens, this situation is unlikely to change.

Shockingly whilst researching the above I found that only three babies in the whole of the UK were given the rather fantastic name ‘Clive’ in 2018. If one of these rare breeds can help you with anything property-related, feel free to get in touch.

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Monday, 14 October 2019

BUY-TO-LET DEAL OF THE WEEK: 3 bed house in Tangmere, £270,000, 4.6% yield

3 bed house, Tamar Way, Tangmere, Chichester

Summary:
3 bed house in Tangmere
Listed for sale on 07/10/19 @ £270,000
Rent = £1,045pcm
Yield = 4.6%
Last sold for £210,000 in 2010 (+29% in 9 years)

New to the market this week is this three-bedroom house in Tangmere. It's one of the 'older' houses in the village, yet curiously it still has the benefit of a downstairs cloakroom and two upstairs bathrooms (an en-suite to the master bedroom and a family bathroom).

With gas central heating and double glazing too, there's not much you're missing out on versus the more expensive newer built homes as a result. Yet at £270,000 you're saving a pretty penny compared to the newer houses AND you get a garage as well.

Of course it's not quite as shiny and modern inside as the new-builds, but it appears to be in decent order, with a neutral décor throughout and a modern enough kitchen and bathrooms.

A similar house has just come up for rent at £1,100pcm, which seems a little strong to me to be honest based on the property's age and location (there's also a three-bed around the corner at £925pcm!) but I think you could achieve £1,045pcm by renting the garage for £50pcm and the house itself for £995pcm.

That figure would equate to a decent 4.6% rental return based on the full asking price of £270,000 (which is a fair price, albeit not quite a bargain - I wonder whether there's some price reductions to follow in the coming weeks?). The current owner paid £210,000 back in 2010, which is a cracking price for the house, although it means they've 'only' seen a 29% increase in the nine years since, which is below the wider average for Chichester and the surrounding areas in the same timeframe.

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-65590809.html

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

Thursday, 10 October 2019

Rents are down in Chichester

You may not think it by reading the mainstream media who suggest rent controls would be a good thing, but it’s true; the average rental price for a property in Chichester currently on the market to let is £950pcm. This time last year it was £975pcm. And when you bear in mind that two years ago the figure sat at a record-high £1,150pcm, it seems that rents in Chichester have dropped quite sharply these last couple of years.

The reason for this is quite simple - it all comes down to supply and demand. Two years ago there were just 88 properties available to let. One year ago supply had increased and there were 107 properties competing for tenants. Now there are 122 available. Whilst that still doesn’t seem a huge amount for our popular cathedral city, it’s actually coincided with a decrease in the number of properties that are ‘let agreed’.

Two years ago 77 properties were ‘let agreed’, whilst one year ago there were 73 properties that had tenants looking forward to collecting the keys to their new home. This figure currently stands at just 66. So, in short, there are more properties available for rent, meanwhile there are fewer actually being let! Market forces dictate this should lead to a drop in prices, which is exactly what has happened.

It’s interesting to note though, that when you break things down by property size, in the past year rents in Chichester have actually risen across the board, except for two-bedroom properties. Whilst I can understand this being the case with two-bed flats (there are currently 35 available and only 16 let agreed) I’m surprised it also applies to two-bedroom houses, with only 8 available versus 9 let agreed.

It’s easy to roll out the all-encompassing excuse that is ‘Brexit’ for this market slowdown. But, maybe it’s just that tenants are more settled in their homes so don’t see the need to move. It could of course be that some see their job security as weaker so are ‘hunkering down’ rather than moving home. But it was suggested once tenant fees were banned in June that there would be an exodus of tenants waiting to move without cost, which simply hasn’t happened.

With rents being flat in Chichester over the past four years, it highlights how landlords should not blindly follow what they read in the national press (UK rents are up 2.2% in the past 12 months). Instead landlords need to understand local supply and demand and the effect it is having on rents. Setting a fair rent that will keep tenants long-term is actually the best way to maximise your returns.

As the supply and demand of a particular rental property can turn on a sixpence, so can a property’s achievable rental figure. If you’d like a free rental valuation that bears this in mind, please get in touch.

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Monday, 7 October 2019

BUY-TO-LET DEAL OF THE WEEK: 2 bed flat in Chichester, £180,000, 5.3% yield

2 bedroom flat, Bewick Gardens, Chichester

Summary:
2 bed flat in Chichester
Listed for sale on 30/05/19 @ £210,000
Now = £180,000
Rent = £795pcm
Yield = 5.3%
Last sold for £99,950 in 2001 (+80% in 18 years)

Two-bedroom apartments close to St Richard's Hospital in Chichester are popular with landlords, as they can be safe in the knowledge that they will rent quickly to Doctors, nurses and hospital workers, be they a couple or two sharers.There are some older ex-council flats in the area along with some that have been newly-built in the past 5-10 years, whilst this flat falls in-between these, having been built in 2001.

Everything looks original from 18 years ago, meaning it's getting to the stage of needing a refurbishment to the kitchen & bathroom, although it seems to have been kept in decent condition given its age. It could definitely do with re-decoration and re-carpeting though. Unfortunately it has electric storage heaters, which are more difficult to upgrade to what many tenants now see as a 'minimum requirement' i.e. gas central heating.

The first and current owner of the flat paid £99,950 when it was new 18 years ago, meaning it has increased 'only' 80% to its current asking price of £180,000 (which has dropped significantly since being first marketed in May for £210,000). I say it's 'only' increased 80%, as properties as a whole in Chichester have increased an average of 130% in this timeframe (with flats a less profitable 110% up).

Once the property is re-decorated and carpeted it should rent for £795pcm. This would mean a 5.3% rental return based on the current £180,000 asking price. Bear in mind the ground rent and service charges though, which are relatively high for this property. Flats built between 2000-2008 seem to suffer from some of the highest service charge demands for some reason; in this case they amount to £1,345 a year (plus £100 ground rent). That instantly brings the rental return down to 4.5%, and it could be the reason why this otherwise good sized, well located and reasonably priced flat has failed to sell.

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-74029339.html

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

Thursday, 3 October 2019

How much rent should you charge?

In contrast to popular belief, the automatic assumption amongst landlords is not “as much as possible!”

When assessing what rental figure you should market your property at, you need to consider what is available at the time you are marketing. It is not sensible to think “well, it rented for £800 a month a couple of years ago and rents are up 10% according to that London based newspaper, so I guess £880”…when another apartment in the block with a sunnier aspect is being marketed at £850pcm.

You should also consider the situation you find yourself in. If you’ve just received the keys to a new buy-to-let, you should price it cautiously so that it lets as soon as possible. If, on the other hand, you’ve just received your month’s notice from your current tenants, you have a little time to ‘test the market’, safe in the knowledge you have a month to ‘tweak’ things if needed.

Having said that, I still wouldn’t advise automatically extracting the maximum figure you deem possible from tenants. By offering a well-presented property at a realistic or favourable price, you will get to choose from a wider pool of people. Besides, even if you do find tenants who sign up for a bumper rental figure in excess of what the property is reasonably worth, how long do you think they’ll stay put?

Consider the fact that tenants will typically stay longer in a property they feel they are getting a good ‘deal’ from. This will help you to minimise your tenant turnover, wear & tear and void periods, all of which will help you make more money in the long-run (and with less hassle). Since the tenant fees ban, the door has been opened even wider for tenants to up and leave at little cost, which they’re likely to do if they see something similar to rent at a better price.

Another reason to be realistic from the start is that the first fortnight of marketing is when you’ll get the most interest. If it’s priced too high initially tenants may dismiss it and even when it’s reduced they’ll still disregard it having seen it a few weeks earlier, remembering they’d previously rejected it “for some reason”.

Bear in mind the actual marketing figure you use too. I’ve written previously how people search the property portals online and filter properties by price. For example, you’ll lose out on a huge number of potential tenants that would be happy to pay up to £1,000pcm if you try and push the asking price to £1,050pcm.

I’d prefer to be conservative on the rental price and receive it 100% of the time from long-term tenants who appreciate living there, rather than squeezing the most I can from someone who ends up either not being able to afford it or deciding it’s not worthwhile staying.

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Tuesday, 1 October 2019

Community Focus: Stonepillow

Stonepillow’s annual fundraising event, The Big Sleep Out, takes place on Saturday 19th October in the grounds of Chichester Cathedral. The event kicks off with a live performance at 2:00pm, as everyone arrives to start building their cardboard shelters before putting them to the test for the night. Participants get sponsored to sleep out to raise vital funds for the charity and increase awareness of homelessness in the local area.

Stonepillow offers shelter, information and support that people need to make positive changes and find independent accommodation they can call home. The charity supports people 365 days a year in Chichester, Bognor Regis and Littlehampton and has 97 clients in their accommodation on any given evening.

Laura Bulbeck, PR & Events Manager said, ‘”The Big Sleep Out is a fantastic event which sees individuals, groups and businesses in the community coming together to help end homelessness. We encourage everyone to get involved, make a difference and help us to raise as much as possible.”

Stonepillow’s CEO, Hilary Bartle, added “As it is our 30th year we are keen to raise £30,000 to equal £1,000 for each year we have been open. This is important now more than ever as we see more people rough sleeping and vulnerable. Declining public funding means we have to do more for less each year. £30,000 would enable us to provide more targeted support to the most vulnerable people on our streets and towards services that support them from street to a stable home.”

The Big Sleep Out doesn’t aim to replicate homelessness but raises awareness and educates communities on the harsh realities of sleeping rough.

To join in with The Big Sleep Out please register at www.stonepillow.org.uk. It costs just £15 per person, which includes food and entertainment.

For more information about the charity, contact Stonepillow on 01243 537934 or admin@stonepillow.org.uk.

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