I was recently called by a husband and wife who were considering buying a rental property for the first time. I was happy to give my thoughts on the market, for which one of the first things they asked was where they should buy.
Whilst my typical answer to this is “it depends”, it is true that I am 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. With this in mind, their next question was which area was best locally; Chichester or Bognor Regis?
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Whilst the average property in Chichester costs £472,708, in Bognor Regis the average home is a more ‘affordable’ £370,580. Isn’t it amazing that a fifteen-minute journey down the A259 could save you 22% off the price of a home!
With the average rent in Chichester standing at £1,295 per month, property is also more ‘affordable’ for tenants in Bognor Regis; which has an average rent of £1,100 per month.
The above figures translate into a projected average yield of 3.3% in Chichester and 3.6% in Bognor Regis. Both these figures seem rather low though, as rental properties tend to be purchased towards the lower end of the market, so you can expect a slightly higher return than this. The logic holds though: property in Bognor Regis will require less money upfront and provide 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 was the winner up until the pandemic. Before then, whether it was in the short, medium or long-term, property prices in Chichester generally rose by a greater amount than in Bognor Regis.
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.
As mentioned though, since the pandemic something strange has happened. Whilst property prices have increased a solid 23% in Chichester since March 2020, they have leapt by nearly a third in Bognor Regis! Could the tide be turning towards Bognor Regis, or have prices there got a little carried away since the ‘pandemic property boom’?
The above shows how important it is to consider all the facts and figures available to you when planning to invest in property. A key factor in deciding where to invest though will be what you want to achieve i.e. a better rental income now, or more proven capital growth in the long run (as sensible landlords know that, unfortunately, it’s rare to find both).
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 initial buy-to-let investment consultation.
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E-mail me on clive@crjlettings.co.uk or call 01243 624 599.
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E-mail me on clive@crjlettings.co.uk or call 01243 624 599.
Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:
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