Is Chichester’s property market grinding to a halt?

There was a general feeling amongst commentators that the property market would face a slow start to the year before settling down and picking up pace after May’s general election.

This, however, simply hasn’t happened.

The most recent sales figures showed there were 25,910 sales across the U.K in June. This is the lowest number of sales in any month since the data began in 1995 (even lower than the 27,023 sales in January 2009 - the worst month of the recent ‘credit crunch’).

This pattern is replicated across the PO postcodes, including here in Chichester.

Up until the 2008 ‘credit crunch’, the housing market was very stable in Chichester (PO19 postcode area). From 1996 until 2007 the number of house sales per year stayed in a reasonably tight range between a low of 624 (2003) and a high of 773 (2006).

This trend broke dramatically when just 470 properties changed hands in 2008. This was 37% lower compared to the 751 sales the year before.

Five lean years followed, with a gradual recovery in transaction numbers, culminating in 707 sales in the PO19 postcode in 2014. Putting this figure into context though, of the twenty years on record, 2014 was still only the ninth highest for property transactions.

Worryingly, the latest data shows there were just 238 property sales in the first half of 2015 and there doesn’t seem to be much suggestion that momentum is increasing.

Zoopla data shows there were just 48 sales in the past three months in the PO19 postcode, compared to 137 in the quarter before and an average of 162 sales in each of the two quarters before that.

We’re also seeing a lower average sale price in Chichester compared to the previous year for the first time since 2009.

The normal arguments for why there might be a slowdown in housing transactions is consumer confidence and affordability. In simple terms, have prices got ahead of themselves, so that people are unwilling to pay the current valuations? Or has the tightening up of the mortgage market and the threat of potential interest rate rises stopped people from taking the plunge?

Ironically, any signs of a weakening housing market will lower the need for an increase in interest rates. Recent developments in the world’s financial markets also seems to have delayed the ‘inevitable’ rise in rates.

For many investors with cash available to invest, the current market conditions can provide opportunities to purchase properties whilst others aren’t doing so.

If you are looking to invest and would like some advice on the best areas to do so to maximise your long-term returns, please get in touch.

(This article was featured in the Chichester Observer's property section on 3rd September 2015)

Clive Janes, CRJ Lettings.  www.crjlettings.co.uk

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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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