Thursday, 23 March 2017

Is Bosham best for buy-to-let?

I read an interesting article from last month’s Telegraph recently, announcing Bosham as one of the top 20 places to invest in property outside of London.

This was based on the staggering capital growth the area has seen, as the lack of available land provides exclusivity and thus premium prices for property in the area. It was also suggested that as Bosham is less well-known then other respected coastal areas, such as Sandbanks, prices could still have further to run.

When we look at property on Shore Road for instance, a four/five bedroom detached house could have been bought for £450,000 back in 1990. By 1996 these properties had broken the £1 million mark and today they would be in excess of £4 million.

And Shore Road is only the third most expensive street in Bosham, with an average value of £1.45m. In second spot is Smugglers Lane (£1.64m) whilst Bosham’s most expensive street is Bosham Hoe, with the value of each home averaging £1.89m.

There are slightly more affordable properties in Bosham than this of course, although with an average price of £536,720 Bosham is significantly more expensive than the average price in nearby Chichester (£376,500) and Fishbourne (£355,358). Bosham is however trumped by West Wittering in this regard, whose prestigious waterside properties have helped reach an average sale price over the past year of £595,533.

The housing mix in Bosham is largely skewed towards family houses rather than flats, with 1,684 of the 1,833 properties in Bosham being houses (92%) as of the 2011 Census.

Census data also shows Bosham as having a relatively ‘mature’ population, slightly more so even than nearby Chichester. In Bosham the average resident is 47 years of age, compared to 44 in Chichester and 40 across England and Wales.

The older age profile of Bosham’s residents perhaps explains why 47% are mortgage-free, compared to 41% in Chichester and 31% throughout England and Wales.

An important housing statistic to point out - and this is where the investment case starts to fall down a little - is that there aren’t relatively many rental properties in Bosham. Just 23% of homes in Bosham were rented in 2011, compared to 36% nationally. I was surprised it was as high as 23% to be honest, considering there are just four homes in Bosham available to rent on Rightmove as I write this.

Let us take a closer look at the only one of those four properties that is actually let agreed - a two bedroom end of terrace house let for £900pcm. It would likely sell in the region of £300,000; equating to a pretty poor 3.6% rental return.

And for me this is where Bosham falls down as being a top place for buy-to-let; rental returns are too low because property prices are high, whilst this isn’t reflected in premium rents as the tenant demand isn’t strong enough. Whilst Bosham is undoubtedly a wonderful place to live and I’ve no doubt property prices will continue to outperform the market, for me it is an area to buy and live, rather than buy to let.

If you’re considering investing in a buy-to-let property and would like to discuss the different local housing markets to evaluate which best suits your investment criteria, please get in touch.

(This article was featured in the Chichester Observer's property section on 23rd March 2017) 

Clive Janes, CRJ Lettings.


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.

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