Chichester or Bognor Regis - where should you invest?

I’ve chatted to several first-time landlords recently about potentially investing in a buy-to-let property. One of the first things that gets discussed is where to buy.

I’m an advocate of buying locally to where you live; for both ease of management and for being able to use your local knowledge of the property market to avoid buying a dud. So, where is best locally - Chichester or Bognor Regis?

Whilst the average property in Chichester costs £412,871, in Bognor Regis the average home is a more affordable £282,429. Isn’t it amazing that a 15 minute journey down the A259 could save you 32% off the price of a home!

With the average rent in Chichester standing at £1,070 per month, property is also more affordable for tenants in Bognor Regis, which has an average rent of £850 per month.

The above figures translate into an average yield of 3.1% in Chichester and 3.6% in Bognor Regis. Both these figures seem rather low though, as rental properties tend to be purchased at the cheaper-than-average end of the market, so you can expect a slightly higher return than this. The logic holds though: property in Bognor Regis provides a better rental return than property in Chichester. However, it’s not all about the yield when investing in property; next we should look at the increase in property prices over time from both areas.

In this case, Chichester is the clear winner; be it in the short-term (Chichester property prices are up 4.8% in a year compared to Bognor Regis’, which have increased just 0.9%) or longer-term (in the past decade, property prices in Chichester have risen 34.7% compared to 19.9% in Bognor Regis).

This actually means that Chichester would have provided the strongest overall return, which would have been magnified further if you were borrowing money to leverage your property investment.

So, it’s important to consider all the facts and to acknowledge that a key ingredient of deciding where to invest will be what you want to achieve i.e. better rental income now or stronger capital growth in the long run (sensible landlords know it’s rare to find both). 

That’s why I often say if you’re looking for consistently-proven strong capital growth, Chichester is great; whereas if you’re seeking income immediately from your property, it could be wise to look towards Bognor Regis.

If you’re thinking of buying a rental property and would like some impartial advice as to which area and property might suit you best, please give me a call and I’ll be happy to give you a free buy-to-let investment consultation.  

(This article was featured in the Chichester Observer's property section on 4th August 2016)

Clive Janes, CRJ Lettings.  

www.crjlettings.co.uk

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

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