What will the General Election do to Mid Sussex Homeowners?

I have had a few people contact me with asking what the General Election will do the Mid Sussex property market?  So I would like to share what I have found out with you. Let’s have a look at Burgess Hill for example. Of the 12,322 households, 4,144 homes are owned without a mortgage and 5,438 homes are owned by a mortgage. The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections.

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season - i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

So finally, what does this mean for the landlord’s private rented properties in Mid Sussex? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Mid Sussex will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Mid Sussex, making it imperative that Mid Sussex landlords are realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.

Should the 4,219 home owning OAP’s of Burgess Hill be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Mid Sussex society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Mid Sussex home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Mid Sussex homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it)

Looking at the statistics for Burgess Hill for example, of the 4,219 Homeowners who are 65 years and older, whilst 2,664 of them described themselves in good or very good health, a sizeable 1,194 home owning OAPs described themselves as in fair health and 361 in bad or very bad health.

8.56% of Burgess Hill home owning OAP’s are in poor health.

But if you look at the figures for the whole of Mid Sussex District Council, there are only 776 specialist retirement homes that one could buy (if they were in fact for sale) and 1,037 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Mid Sussex downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Mid Sussex population and specialist retirement properties for the ones who aren’t in such good health. We need to build more appropriate houses in Mid Sussex.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

Come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Mid Sussex is more houses and apartments need to be built in the area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Mid Sussex property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!

4,491,760 People use Haywards Heath Train Station a year - How does that affect the Haywards Heath Property Market?

It might surprise you that it isn’t always the poshest villages around Haywards Heath or the swankiest Haywards Heath streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location ,Location, Location! 

As an agent who covers Haywards Heath, I am frequently confronted with queries about the Haywards Heath property market, and most days I am asked, “What is the best part of Haywards Heath and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person – a lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that, in total, 6,170 people jump on a train each and every day from Haywards Heath Train station. Of those, 4,764 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £3,916 a year.

So, if up to £18.66m is being spent on rail season tickets each year from Haywards Heath, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Haywards Heath and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Haywards Heath buy to let market – providing homes for the tenants of Haywards Heath.

The bottom line is that property values in Haywards Heath would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it serves in the town.

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.  

Overall usage of the station at Haywards Heath has increased over the last 20 years. In 1997, a total of 3,108,928 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 4,491,760 people using the station (that’s 12,340 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Haywards Heath property. It is also significant for tenants - so if you are a Haywards Heath buy to let investor looking for a property - the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website.