Chichester Property News: new-build

Showing posts with label new-build. Show all posts

Thursday, 30 November 2017

How much of Chichester is built on?

It is generally accepted amongst us Brits that because we live on a small island with an ever-growing population, house prices will continue to increase. Official figures suggest 250,000 new homes are needed each year in the UK to keep up with demand, and yet last year only 217,000 were built. In last week’s Budget the Chancellor announced plans to start building 300,000 new homes a year, which raises the question…where are they all going to go?

It may surprise you to hear that only 5.9% of the UK is actually built on, with the majority (56.7%) being used as farmland, 2.5% being designated as ‘green urban’ (that’s parks, gardens and recreational space) and the other 34.9% remaining natural. So, all the houses, roads, shops, businesses, airports and other buildings take up less than 6% of the nation - which is quite amazing when you think about it. As we spend most of our time in built-up areas it’s often only when we fly home from holiday and look out the plane’s window we are reminded how green Britain actually is!

When we extract Wales, Northern Ireland and Scotland from the figures though (a huge 71% of Scotland remains completely untouched, with just 2% being built upon), the data indicates that an average of 8.8% of England is built on, with 3.8% green urban, 72.9% farmland and just 14.5% remaining natural.

Here in Chichester we’re less than half as densely urbanised than most of England, as we benefit from just 4% of the District being built upon. A further 2% of land is green urban, 69% farmland and, not surprisingly for an area that includes the South Downs, a higher-than-average 25% of our land remains natural.

I fear this abundancy of open space is why central government sees Chichester as an easy target to take on more housing - with directives to build thousands of new homes in the coming years (the current local plan sets 435 per year as a target, but this figure is likely to be increased in the 2020 review to 505-650 per year). The higher-end of that range would equate to more than 7,000 additional homes being built by 2030, which is a significant increase on the 50,000 or so existing properties in the Chichester District today.

So where are we going to build these new homes? It’s all well and good for central government to push for these schemes, but the knock-on effect is the strain upon local infrastructure i.e. the roads, public transport, schools, hospitals and other public services that need to be enhanced and added to.

Well, the development at Whitehouse Farm is set to be the biggest in Chichester’s history, with 1,600 new homes planned. And farmland is also under threat in Shopwhyke, Westhampnett and Tangmere. But surely all these new residents will need to eat, so continuously building on farmland isn’t sustainable in the long-run. Unless housing is to be more densely built (think taller but smaller new-build units, with a lack of outdoor space) it seems the quarter of our District’s land that remains ‘natural’ could be under threat.

Whilst the Government has made loose promises about the ‘green belt’ being safe from development, it seems that there will come a time when there is little option than to build upon the open spaces that inherently make Chichester and the surrounding areas such a joyous place to live.

(This article was featured in the Chichester Observer's property section on 30th November 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.

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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c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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Thursday, 14 September 2017

Which type of property is best in Chichester?

I was chatting with a new landlord recently who was interested to hear what type of property has increased in value the most in Chichester. I took a look at some stats, which I thought you might find of interest.

In the past 12 months, the average asking price in Chichester is down by 8%, currently standing at £325,000. It was interesting to see though that the average asking price of flats in Chichester has actually increased by 17% whilst the average asking price of detached, semi-detached and terraced houses have all dropped.

If we look a little further back though, this story is completely reversed. Asking prices in Chichester have increased by an average of 27% in the past decade. Yet in this timeframe it is Chichester’s flats that have increased the least (+14%), being outperformed by detached houses (+17%), semi-detached houses (+41%) and terraced houses (+51%).

You could therefore conclude that flats have had a great run of it in the past 12 months, whilst in the long-term the enduring popularity of a house is the more popular choice, which leads to greater capital growth.

It’s a similar narrative when we look at the size of the property in question. In the past 12 months the smaller properties (with one and two bedrooms) have increased the most (up 3% and 6% respectively) whilst large houses with five or more bedrooms have slumped by 26%. Yet when we look at the data over the past decade, it is the large houses with five or more bedrooms that have increased in value the most (by 57%) whilst the one and two bedroom properties have vastly underperformed, increasing by just 2% and 6% respectively.

Whilst all of this data only compares what is on the market now against what was available exactly one and ten years ago (and thus it’s conceivable that particular month wasn’t reflective of overall trends) there does seem to be some logic as to why we are seeing the above patterns.

You see, ten years ago is when the credit crunch started to bite. The lower end of the market was more susceptible to the effects of this than the top end properties, which is why a decade on the larger houses have outperformed the smaller houses and flats. As credit in the way of mortgages becomes more readily available though, the lower end of the market continues to outperform, catching up some of the ground it has lost to the more expensive properties in recent years.

(This article was featured in the Chichester Observer's property section on 14th September 2017)

Clive Janes, CRJ Lettings.

www.crjlettings.co.uk

______________________________

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:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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Thursday, 31 August 2017

What is ‘average’ in Chichester’s property market?

The average property price in the U.K is £223,257, which is up 4.9% from last year. When it comes to Chichester’s property market though, we are very much above average in comparison to the rest of the U.K.

Here in Chichester the average property is worth £383,763 (72% more than the U.K average) and has increased by 9.1% in the past year!

Currently on the market at this price range in Chichester you could purchase a two bedroom apartment in the gated development of William Cawley Mews just to the North of the city centre. Or perhaps a three bedroom semi-detached house in Parklands near the highly sought after Bishop Luffa School would suit the ‘average’ family in Chichester.

Those searching for a new-build property could look at a three bedroom house in the Shopwyke Lakes development to the East of the city, whilst those who prefer an older property will find a series of three bedroom period properties close to the city centre for the price of the average Chichester home.

With Chichester’s average salary being £31,000 (only 10% more than the U.K’s £27,600 average salary) it is clear that the ‘average’ Cicestrian would struggle to afford any of those ‘average’ local properties though.

In fact, with the average property price in Chichester being 12.4 times the local salary, Chichester is often cited as one of the most unaffordable places to live in the country.

This goes to show that it is very difficult for the ‘average’ person to purchase a property in Chichester, leading to more people wanting to, or needing to, rent in the city. Between 2001 and 2011 the number of people renting in Chichester increased 25%!

The average rent in Chichester now sits at £1,000 per month, which is an increase of 5% compared to last year. At this price the ‘average’ tenant could afford to rent an executive two bedroom apartment, a two bedroom starter house or a ‘cheap’ three bedroom house. It also suggests that around 39% of a local employee’s gross salary is being spent on rent (this is slightly misleading of course, as many households will contain more than one breadwinner).

The mainstream media may bring you plenty of national updates on the property market, but I am passionate about bringing you news and statistics about your local property market right here in Chichester.

For updates that are relevant to you, you can subscribe to my weekly ‘Chichester Property News’ e-newsletter free of charge at www.tinyurl.com/chipropertynews or feel free to pick up the phone and call me for a chat.

(This article was featured in the Chichester Observer's property section on 31st August 2017)

Clive Janes, CRJ Lettings.

www.crjlettings.co.uk

______________________________

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:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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Monday, 22 May 2017

BUY-TO-LET DEAL OF THE WEEK: 2 bedroom house in Fishbourne, £285,000, 4.1% yield

Summary:
2 bedroom semi-detached house in Fishbourne
Listed for sale on 08/05/17 @ £285,000
Rent = £975pcm
Yield = 4.1%

I visited the show home at Acorn Grove in Fishbourne to see how the development of 24 homes was going. Rather well it turns out, as they were all sold, except for the just released soon to be ex-show home and ex-sales office, which are both two bedroom semi-detached houses. Asking prices were due to be released imminently but it should be £285,000 for the ex-sales office and £295,000 for the ex-show home (which features some specification upgrades & furnishings).

That seemed pretty reasonable to me, considering a second-hand two bedroom house on the next door development (The Oaks) has just sold within a week of being marketed at £289,950. Considering you could get a brand new property, complete with warranty, for £5,000 less, that seemed worth investigating further. One snag is that there're unlikely to be available until November, as they are still being used for the marketing of Taylor Wimpey's Hambrook site, but that means you can lock in a purchase at today's price for six month's time (which could be a good or bad thing depending on how house prices develop I suppose).

They are obviously immaculately-presented houses, which will appeal to discerning tenants. They have a good layout, even managing to fit an en-suite into the master bedroom. The bedrooms aren't huge, but then that's true of most new-builds nowadays and something I think future generations will get used to and accept as 'normal'. The house overall is 673 square feet, which is quite a bit smaller than the recently sold one I mentioned (795 square feet but without an en-suite). It also forgoes a garage, again like most newer build plots (particularly two bedroom homes) but gets two allocated parking spaces, which is good.

Some people think buying new-build homes is a bad idea as you are overpaying to cover the developer's premium. Like a new car, as soon as someone uses it it is no longer new and thus loses some value. For many though, who want the assurances a new-build provides, it makes a very simple buy-to-let purchase whereby there is nothing to do and tenants can move-in from day one, safe in the knowledge that any maintenance issues for the next couple of years will be covered by the builder.

The fact it generates a decent yield in a popular area I often cite as being a great place to live, buy and invest in and I think it stacks up as a good buy-to-let prospect.

If that sounds like something worth paying a little extra for compared to some older homes, visit the sales office at Acorn Grove and take a look at what I think is a pleasant development in a great location, just on the outskirts of Chichester.

It is on the market with Taylor Wimpey and full details can be found on Rightmove via the following link: http://www.rightmove.co.uk/property-for-sale/property-48503070.html

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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:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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Thursday, 4 May 2017

Should Chichester’s landlords buy a developer’s show home?

With all the new housing developments springing up around Chichester recently, and with many more planned in the future, an interesting investment opportunity was raised by one of my landlords a while ago - should he buy the developer’s show home and rent it back to them whilst the housing development is being built?

This is not a new practice and has been a popular investment with some for many years - particularly when house prices were booming and it was a reasonably safe bet that come the end of the development the show home would be worth far in excess of what the investor had originally paid.

It can be difficult to get a mortgage on a property that you buy and intend to rent back to the builder (particularly when it is a corporate lease that might run for several years). This therefore means you cannot leverage your funds and thus it tends to appeal to more risk averse ‘cash-rich’ investors who aren’t seeking mortgages to turbo-charge their returns.

The concept of being able to lease back the property from day one on a long-term contract at a reasonably generous fixed return, is quite appealing. Particularly when you factor in that you won’t need to market for, or manage, live-in tenants and the builder will maintain the property.

It’s not without its downsides though.

Besides checking the developer’s credit worthiness to pay the rent, you need to be confident of what the property is actually worth. This can be difficult when it is the first home to be built on what will be a building site for often many years. New-build properties are normally sold at a premium, so it can be hard to find comparables that justify the price, as existing homes nearby are likely to be cheaper in comparison.

There seems to be a flurry of developers right now who are overpricing such offerings and simply paying the rental return from the overinflated price. This is predominantly happening in the North and North-East of England, where developers are largely marketing the properties to ‘Southerners’ who aren’t perhaps familiar with the local housing market and their accompanying lower house prices.

Unfortunately, at the end of the term the investor is likely to find the achievable market rent is far below what they had been used to and the property hasn’t necessarily increased (or retained) the value they originally paid.

As ever it is buyer beware in regards to how good the ‘deal’ actually is. It is also ‘horses for courses’ in regards to what you are trying to achieve as to whether buying a developer’s show home is right for you.

As it happens, for this particular landlord it seemed to make sense. It was a national housebuilder and the property price and rental return seemed reasonable. The landlord was a cash investor and for the next few years he needn’t worry about tenants or property maintenance and he won’t have to pay a letting agent their management fees! ……oh.

Clive Janes, CRJ Lettings.

www.crjlettings.co.uk

_________________________________

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:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

__________________________________

Monday, 23 May 2016

BUY-TO-LET DEAL OF THE WEEK: Studio apartment in Chichester, £125,000, 5.8% yield

Summary:
Studio apartment in Chichester
Listed for sale on 05/11/15 @ £140,000
Now = £125,000
Rent = £600pcm
Yield = 5.8%

This brand new (converted) studio apartment is right in the heart of Chichester's city centre. It's actually been marketed for around 18 months but now the property has been built (around 6 months ago I believe) it seems the vendor is now keen to sell, having just knocked 10% off the asking price.

That drop from £140,000 to £125,000 makes this the cheapest property for sale in Chichester. This makes sense, considering it's just about the smallest, but being brand new (and seemingly done to a great standard) will make renting it a breeze. Its central location should also see it remain highly desirable to both tenants and future buyers.

That great location is the key reason I've suggested a studio apartment, which is not something I would ordinarily recommend. The simple logic to that is the higher £ per square foot you're paying (£364 per square foot) and the limited amount of tenants who would want to pay £600pcm plus bills to live in such a small space. That rental figure would however provide you with a strong 5.8% yield, although I don't know the lease / service charges on the apartment - something to ask the agent.

It is on the market with Cubitt & West and full details can be found on Rightmove via the following link:
http://www.rightmove.co.uk/new-homes-for-sale/property-47003413.html

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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.

Don't forget to visit the links below to view my previous buy-to-let deals and Chichester Property News articles:

c/o CRJ Lettings, 30B Southgate, Chichester, West Sussex, PO19 1DP

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