What does 2017 have in store for Chichester’s landlords?

2016 was a tough one for many landlords as they were dealt a bloody nose by the government from an array of additional legislation and financial penalties in the form of stamp duty and tax reforms.

Nevertheless, those in it for the long term saw an increase in their capital of some 7.7% here in Chichester in 2016 (based on Land Registry figures to October). That’s based on an increase of £26,248 over the year, from an average price of £342,006 in January to £368,254 in October (the latest official figures on record).

This increase compared well against the national growth in house prices of 5.5% (the average house price in the UK now stands at £216,674) and an increase of 6.4% during 2016 in the South East of England.

This seemingly unstoppable rise in house prices would explain why rental demand continues to be so strong in Chichester, as first time buyers see their homeownership dream creep ever further away.

Delving deeper into the figures though, it seems to me that a lot of this increase in price has come about from a lack of supply, rather than a huge rise in demand. This is illustrated as properties are remaining on the market significantly longer than they were a year ago (139 days in December 2016 vs 115 days in December 2015).

Nationally this pattern has been reported too as the number of sales decline whilst both homeowners and tenants are remaining in the same property for longer.

This is good news for landlords as there will be less ‘churn’ of tenants - something I regularly talk about in regards to the properties I recommend people aim to invest in.

And whilst the tax changes to mortgage interest relief will start to impact landlords, at least solace can be taken by the record low interest rates that mean buy-to-let mortgages are available for less than the yields on offer from rental property.

A year ago the consensus was that interest rates would rise (something I wrote I didn’t expect to happen) and yet interest rates dropped in 2016! There’s little sign now that interest rates are likely to be increased and the boat rocked in light of the unexpected Brexit vote and Donald Trump’s ascension to Presidency.

Unfortunately the two events mentioned above (Trump & Brexit) has caused widespread uncertainty, which invariably trickles down into our local property market. This makes it even more important that you invest in the right property at the right price and that it is managed effectively to maximise your return and limit your risk.

If you are looking to invest in buy-to-let or need assistance letting a property please give me a call on 01243 624599 and I’ll be happy to offer you my time and experience of buying and letting in and around Chichester’s property market.

(This article was featured in the Chichester Observer's property section on 5th January 2017)

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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