£7,700 boost to Burgess Hill First time buyers.

There’s a whole legion of wannabe Burgess Hill first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Burgess Hill landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Burgess Hill buy to let landlords has dropped away, in the interim, it offers Burgess Hill first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.

Looking at the average value of a terraced house in Burgess Hill currently standing at £257,400, that means if our Burgess Hill FTB went up against a Burgess Hill landlord, the landlord would have to pay an additional £7,722 in stamp duty. Early anecdotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Burgess Hill properties to reflect the extra stamp duty.  

Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Burgess Hill property market as a whole.

Since 2011/12, the Burgess Hill property market has performed very well indeed. Over the last 12 months, £158,227,788 has been spent buying 516 Burgess Hill properties.  Figures from the Land Registry have just been released and month on month in our council area, property values are 1% higher, yet 9.3% higher year on year. These figures are nowhere near the heady days of 2003 (February to be exact), when Burgess Hill property prices rose by 23.6% in 12 months.

So as property values in Burgess Hill (and the UK as whole) start to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Burgess Hill property market in a different light. Even with the spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof.

This stamp duty change has made more and more landlords, after reading the Mid Sussex Property Market Blog http://midsussexproperty.blogspot.co.uk take advice on what or not to buy and what to pay; meaning Burgess Hill landlords are being more calculated with their Burgess Hill BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Burgess Hill, this in part reflects amplified uncertainty about the short term economic outlook (eg. Brexit, Issues in the Middle East etc.).

Now I know a lot of landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Burgess Hill investors will return for the right Burgess Hill property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Burgess Hill FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!

Brexit and Burgess Hill Property market – 41% more properties on the market.

April Fool’s Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty George Osborne imposed on buy to let properties after the 31st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Burgess Hill, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.

Then we have the Brexit issue, which is also having a tempering effect on the Burgess Hill property market – although if you recall I wrote about this a few weeks ago, and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. In another article I wrote previously, I spoke of the growth rate of Burgess Hill property values, and whilst the rate of growth is slowing, Burgess Hill property values are still 8.8% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015. Interestingly though, a very recent members survey of the Royal Institution of Chartered Surveyors states that only 17% of members believed property values would increase over the next Quarter compared to 44% at the end of 2015.

All this had led to increase in the number of properties for sale. For example in the RH15 postcode, which mainly comprises of Burgess Hill and Ditchling Common, there were 111 properties for sale in the postcode in December (of which 33 came on to the market for the first time). In January, February and March, 179 properties came onto the market in the postcode district (or an average of 60 per month), meaning by end of the first Quarter, there were 157 properties available for homeowners and landlords alike to buy in RH15 (i.e. a rise of 41.4% more properties for sale). These figures are mirrored in neighbouring postcodes throughout the Burgess Hill area.

Nevertheless, I believe this easing of the Burgess Hill property market is a good thing, as investment landlords won’t have to pay top dollar to secure a property because of the lower competition. On the face of it, this easing should be bad news for the 23,796 Burgess Hill homeowners, but nothing could be further from the truth. The majority of homeowners that move, move up market, (i.e. from a flat to terrace/town house, then a semi and then detached), so whilst last year you would have achieved a top dollar figure for your property, you would have had to have paid an even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Burgess Hill Property Market! 

However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Burgess Hill property and the supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Burgess Hill property market. It would surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 19% to 24% higher than they are today.

Good little investment property in Burgess Hill.

Good Afternoon to my blog reading fans, I was just having a quick peek at what has come to market this week and found this little gem. On the market with Fox and Sons in Burgess Hill this lovely one bed flat is well priced at offers over £165,000. You can view the details by clicking on the link below.

http://www.rightmove.co.uk/property-for-sale/property-59187347.html 


Perfectly placed for young professional people, it is a stone’s throw from the town centre. Looking at the photos it looks very well presented and would appear to need no work doing to it. A conservative rental estimate of around the £735pcm mark would give a great gross yield of 5.3% at a purchase price of £165,000. The property is leasehold, so make sure you check out the service charges and ground rent carefully, as this will have an effect on any yield.

If you are considering a buy to let investment you are welcome to call in to my Martin & Co office on Keymer Road for a coffee and a chat, or email me if you have any questions.

Burgess Hill Property Market in Crisis : Who is to blame?

At the end of the First World War, 77% of people rented their home (the vast majority renting from a private landlord as Council Housing was still very much in its infancy). Home-ownership rose very slowly in the 1920’s and started to grow as the economy grew after the Great Depression. However, after the Luftwaffe had flattened huge swathes of housing in the early 40’s, the priority was to get people into clean and decent accommodation, so Local Authority’s (Councils) took up the baton and they built large council estates in the 1950’s and 1960’s.

As the UK economy got back on its feet in the middle part of the 20th Century and wages rose, people decided they wanted to own their own home instead of renting. Throughout the post war decades, it became easier to secure a mortgage. Interestingly, by 1977, 61.6% of 30 to 34 year olds were owner occupiers with a mortgage compared to 8.7% of 30 to 34 year olds being in private rented accommodation (the remaining either being in council housing or living with friends or family). Ten years later, in 1987, we saw some significant growth in home-ownership, as 68.2% of 30 to 34 year olds had a mortgage and only 4.6% of people privately rented. A decade later and there wasn’t much change as, in 1997, the home-ownership figure was 68.3% but private renting had jumped to 12.1% in the same 30 to 34 year old age group.

Move on another ten years to the 2007 figures, and this showed a slight drop in home-ownership to 65.8% but renting had continued to increase to 18.7% (in the 30 to 34 year old age group). The latest set of figures is for 2014, and only 47.2% of 30 to 34 year olds had a mortgage and an eye watering 33.4% of 30 to 34 year olds privately rent.

When we look at the Burgess Hill figures of home-ownership, looking back to 1991 76.93 % of Burgess Hill households were owned by the homeowner, whilst 6.75% of Burgess Hill households were privately rented. The 2011 census showed home ownership in Burgess Hill had dropped to 73.65% and private rented had increased to 13.37%. Much of the recent rise in the occurrence of private renting in Burgess Hill since the turn of the Millennium is not because property has become more expensive, but the fact these 30 somethings haven’t got a council house to move into (because they were all sold off) – so they have to rent. The selling of council housing in the 1980’s (a subject I have talked about in a previous article in the Mid Sussex Property Market Blog) artificially grew home-ownership in the 1980’s, but as these people have got older, the younger generation didn’t have the same opportunity to buy their council house in the 1990’s, 2000’s or 2010’s. That is why, unless the council start building council houses by the acre, and hundreds of acres, private renting will continue to grow in Burgess Hill.

So if you want blame anyone blame the Grocer’s daughter from Grantham – Mrs. T! But before you do remember in the 1970s the UK was called the "sick man of Europe" by critics of the UK government, because of industrial strife and poor economic performance compared to other European countries culminating with the Winter of Discontent of 1978/9. If it hadn’t been for her we wouldn’t be where we are today.