Chichester property rises £398 per week

This article was featured in The Chichester Observer's property section on 26th June 2014.

I recently spoke to a first-time landlord who asked me what and where he should buy in the area to maximise future capital growth. Whilst I can't predict the future, looking at historical price changes can give a good indication of where to buy.

Over the last 12 months, average property values in Chichester have risen from £326,633 to £347,372; an increase of £398 a week!

This compares favourably to both the UK average (up £262 per week) and other destinations in West Sussex and Hampshire, whereby Horsham is up £394 per week, Worthing £321 per week, Southampton £288 per week, Bognor Regis £240 per week, Havant £227 per week and Portsmouth 'just' £177 per week.

In regards to what he should buy, I then looked at these 'average' increases by property type. Many buy-to-let investors favour flats and smaller terraced houses, whereas in fact it was the larger detached properties that showed the biggest weekly increase (up £673 per week; more than the average local salary!).

It is common when an investor has a lump sum of money they wish to put into 'property' that they must decide whether to buy one larger property or several smaller ones. Larger houses commonly achieve a lower rental return than several smaller ones, hence why the de facto choice for buy-to-let is to buy smaller units. It is also common perception that tenants are younger and therefore looking for 'starter' flats and houses to rent.

However, there are benefits in buying a larger property besides the fact that, in Chichester at least, it is these properties that are witnessing the best capital growth. As is often noted in the national press, first-time buyers are getting older and there is an increase in those who actively choose to rent for lifestyle choices, particularly well-heeled tenants looking for more expensive homes.

It is also easier and generally cheaper to manage just the one property and set of tenants than several. Only having one set of rental payments to keep track of and one boiler to maintain can be a godsend to those with a busy schedule.

You do, however, run the risk of putting 'all your eggs in one basket' should you encounter a void period or a problematic tenant, whereas having several smaller units helps spread this risk.

One thing that is certain is that house price increases across the board has led to greater demand for rental property from good-quality tenants who want the benefits of living in Chichester but have been priced out of the local market.

Average rental yields of over 4% comfortably beat the rates available from any savings account. This, combined with the excellent increases in property values, could make it a good time to invest in Chichester for the long-term.

If you would like some advice about buy-to-let or need assistance letting your property, please get in touch.

This article was featured in The West Sussex Property Guide on 26th June 2014.

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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.

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