Thursday, 8 October 2020

Do postcodes matter?

I was asked several years ago whether your postcode matters when it comes to the value of your property. Well, in swanky West London, the difference between SW3 and SW10 can influence values by thousands or even millions of pounds. In Chichester however, we don’t have many Russian Oligarchs and Saudi Princes buying our properties. Nevertheless, ever since being asked that question, I’ve always found it interesting to compare Chichester’s PO18, PO19 and PO20 postcode areas.

The central postcode area for Chichester is PO19, covering the area up to Lavant and down to the A27, plus Stockbridge and part of Fishbourne. The villages to the North of this are in PO18, incorporating as far as Eartham to the East and Nutbourne to the West. Then to the South of the A27, covering the Manhood Peninsula and reaching down towards Bognor Regis, is PO20.

It is for these geographical reasons that I have indeed witnessed scenarios where two seemingly similar properties, but on different sides of the PO19/PO20 border, have varied in desirability and price (largely due to the proximity to Chichester’s city centre).

Of these three postcode areas, the one with the best performing housing market over the past 12 months has in fact been PO20, to the South of Chichester, with average values rising by 2.0%. In a close second was PO19 with a rise of 1.7% and in third was PO18 with a 1.3% increase.

It’s a similar story when looking back at the areas over a longer period. Over the last 5 years, values in PO20 have risen by 17.7%, PO19 is slightly behind with a 14.4% rise and finally PO18 has seen a 12.7% increase. That narrative remains the same when looking at the postcode regions on a 10 and 20 year timespan too.

Why might this be the case? Simple supply and demand of course! 53% of all properties on the market in PO20 are showing as sold, compared to 47% in PO18 and 43% in PO19, suggesting demand is strongest in PO20. And where there’s demand, prices typically follow. It’s a different story when it comes to rentals though, with 83% of the total properties showing as ‘let agreed’ in PO18, compared to 74% in PO20 and 69% in the PO19 region.

With all this in mind, it’s interesting to note that the PO20 postcode region has a greater ratio of homeowners versus renters than the more central PO19 postcode area. This is evident by the fact 380 properties are available for sale in PO20 but just 16 are available to rent, whilst there are 437 properties for sale in the PO19 postcode and a far healthier (albeit still low) 55 for rent. 

I would therefore conclude it has been the homeowners of Chichester that have predominantly driven house price increases. This tallies with other evidence that it is not landlords who have the greatest baring on property prices, but owner-occupiers who are happy to pay a little more for their dream home. 

This article was featured in...

No comments:

Post a Comment