Burgess Hill Property Market Sees An Unpredicted Autumn Boost of 175%.

Well, it doesn’t seem like two minutes ago that it was Christmas – and now it’s all over! One cold December morning, after arranging the office’s Christmas cards I thought I would nip out for a quick festive coffee in Quench in Burgess Hill high street.  I met an old client of mine in Quench and we got talking about the Burgess Hill property market. I had just completed my research for my next blog article and I would like to share with you the parts of the conversation relating to the Burgess Hill property market.

He asked me what my thoughts were about the last half of the year in regard to the Burgess Hill property market and if there were any great buy to let deals around. In reply I said that, in my view, shrugging off the uncertainty of the initial post Brexit vote, I have seen an increase in supply and a rise in the number of properties selling at the lower to middle end of the market, meaning both first time buyers and buy to let landlords have been returning in the last few months – proof the market is beginning to bounce back.

So let’s look at the numbers;

In November 2016, according to the three main property portals (Rightmove, Zoopla and OnTheMarket) there were a total of 231 properties for sale in Burgess Hill (within 2 miles of the centre of Burgess Hill to be exact). In November 2015, there were only 84 properties for sale, a rise of 175%.

When I split it down into bedrooms (note things like building plots and part commercial/part residential etc. won’t be in these figures so the numbers below wont exactly match up to those in the above paragraph).

	# Properties on the market in Nov 2015	# Properties on the market in Nov 2016	Per cent Change
5+ Bedrooms	16	19	+19%
4 Bedrooms	29	86	+197%
3 Bedrooms	21	70	+233%
2 Bedrooms	13	43	+231%
1 Bedroom	4	13	+225%

 

Then when I looked at type of properties, it got even more interesting;

Type of Property	# Properties on the market in Nov 2015	# Properties on the market in Nov 2016	Per cent Change
Detached	41	105	+156%
Semi	17	70	+312%
Terraced	6	13	+117%
Flat	11	35	+218%

As the number of Burgess Hill properties put up for sale has soared by 175%, homeowners have become more realistic about how much their homes are worth. This increase in homeowners wanting to sell suggests there is renewed confidence in the Burgess Hill property market and there are also signs that people are being more realistic about pricing their property.

As you can see, there has been a significant uplift in flats and semi-detached properties, which means there is greater choice for first time buyers and landlords. So with a combination of realistic pricing and more properties on the market – both first time buyers and landlords alike might be able to pick up a few bargains!

Mid Sussex property price rises set to be more restrained in 2017 due to Brexit.

While Brexit has not yet had a sizeable impact on the Mid Sussex housing market, my analysis is pointing to the fact that the economic viewpoint still remains uncertain and Mid Sussex property price growth is likely to be more subdued in 2017 - although that isn’t a bad thing so let me explain.

 

Since the summer, apart from a little wobble of uncertainty a few weeks after the Referendum vote, property values (and the economy), on the whole has outperformed what most people were anticipating. In fact, when I looked at the property prices for our Mid Sussex District Council area, these were the results;

October 2016          - drop of 0.42%

September 2016      - rise of 0.33%

August 2016            - rise of 0.36%

July 2016                - rise of 0.99%

June 2016               - rise of 2.63%.

The UK property market continues to perform robustly (because we can’t just look at Mid Sussex as if in its own little bubble) with annual price growth set to end this year at 6.91% and most South East region property market at 9.1%.

Talking to fellow agents in London, the significant tidal wave of growth seen from 2013 through to 2015 in the capital has subdued over the last six months. However, as that central London house price wave has started to ripple out, agents are starting to see stronger property growth values in East Anglia and the South East regions outside of London, than what is being seen within the M25. So, fellow Mid Sussex landlords and homeowners, is this the time to get your surfboards ready for the London wave?

Well, we in Mid Sussex haven’t really been affected by what is happening in the central London property mega bubble (i.e. Kensington, Chelsea, Marylebone, Mayfair etc.). The property market locally is more driven by sentiment, especially the ‘C’ word, confidence. The main forces for a weaker Mid Sussex Property market relate to economic uncertainty surrounding the Brexit process, which I believe will impact unhelpfully on consumer confidence in the run up to and just after the triggering of Article 50 by the end of Q1 2017.

In addition, the influence of reforms to the taxation of landlords is expected to result in a reduced demand from buy to let landlords, which will limit upward pressure on property values. However, on the other side of the coin, demand from tenants has been strong, but this has been counterbalanced by a strong supply of rental properties. In my opinion, there is a slight risk of rents not growing as much in 2017 as they have in 2016, but by 2018 they will rise again to counteract Philip Hammond’s changes to tenant fees.

The broader Mid Sussex rental market looks relatively positive with modest rental growth expected and rents might rise further if landlords begin to sell properties in an effort to offset to the impact of tax rises.

So what do I predict will happen to the Mid Sussex housing market in 2017?  In Mid Sussex, I believe price values are expected to fall by 2.3% in 2017 compared to a rise of 10.23% last year, then pick up to growth of 1.9% in 2018, 3.1% in 2019, then 4.2% in 2020 and 6.5% in 2021.

But these predictions do not take into account any effect of a possible snap General Election or further referendum on ratifying any Brexit deal (if that comes to pass in the future).

Burgess Hill OAP’s sitting on £1.41 bn of Property.

Burgess Hill people aged over 65 currently hold more housing wealth in their homes than the annual GDP of the whole of the Isle of Anglesey and this is a problem for everyone in Burgess Hill!

Many retirees’ want to move but cannot, as there is a shortage of such homes for mature people to downsize into.  Due to the shortage, bungalows command a 10% to 20% premium per square foot over houses of the same size with stairs. To add to the woes, in 2014, just 1% of new builds in the UK were bungalows, according to the National House Building Council - down from 7% in 1996.

My research has found that there are 3,733 households in Burgess Hill owned outright (i.e. no mortgage) by over 65 year olds.  Taking into account the average value of a property in Burgess Hill, this means £1.41 billion of equity is locked up in these Burgess Hill homes, compared to the GDP of the whole of the Isle of Anglesey being £797 million of GDP.

A recent survey by YouGov, found that 36% of people aged over 65 in the UK are looking to downsize into a smaller home.  However, the Government seems to focus all its attention on first-time buyers with strategies such as Starter Homes to ensure the youngsters of the UK don’t become permanent members of ‘Generation Rent’.  Conversely, this overlooks the chronic under-supply of appropriate retirement housing essential to the needs of the Burgess Hill’s rapidly ageing population. Regrettably, the Burgess Hill’s housing stock is woefully unprepared for this demographic shift to the 'stretched middle age’ and this has created a new 'Generation Trapped’ dilemma where older people cannot move.

Some OAP’s who are finding it difficult to live on their own, are unable to leave their bungalow because of a lack of sheltered housing and ‘affordable’ care home places.  So, older retirees can't leave bungalows, younger retirees can't buy bungalows and younger people can't buy family houses.

Interestingly, adding insult to injury, the problem will only get worse, as in the 50 year old to 64 year old home-ownership age range there are an additional 2,417 Burgess Hill households that are mortgage free and a further 2,675 Burgess Hill households who will be completing their mortgage responsibility.  With Government projections showing the proportion of over 65’s will rise by over a third from the current 17.7% to 24.3% of the population in the next 20 years, this can only add greater pressure to the Burgess Hill Property market.

House prices have rocketed over the last 40 years because the supply of property has not kept up with demand. With migration, people living longer and high divorce rates (meaning one family becomes two) we need, as a Country, 240,000 properties to be built a year to just stand still.  In the 1990’s and early 2000’s, the Country was building on average 180,000 to 190,000 households a year, but since the Credit Crunch (2009), that has only been between 130,000 and 145,000 households a year.

The solution; release more land for starter homes, bungalows and sheltered accommodation because land prices are killing the housing market as the large firms dominating the construction industry are more likely to focus on traditional houses and apartments.  My opinion – until the Government change the planning rules and allow more land to be built on – Bungalows could be a decent bet for future investment as they continue to attract ever growing premiums.

Burgess Hill Semi Detached House Prices rise by 421% in 20 years.

The semi-detached house with its bay windows and net curtains has long been ridiculed as an emblem of safe, lacklustre and desperately uncool suburban life; the homes of the likes of Hyacinth Bucket in Keeping up Appearances and more latterly Alan Partridge – but they could have the last laugh - having enjoyed the highest price growth of any property type in Burgess Hill, up by an average 421% increase in the last twenty years.

The semi can now laugh in the face of its posher detached counterpart, which saw a rise of only 385% in the same 20-year period. Looking at smaller properties, flats/apartments only rose 376%, whilst terraced houses did better at 406% (although they were starting from a lower base and demand from buy to let landlords has had a big part in driving the values on that type of house (i.e. the price a buy to let landlord is prepared to pay is driven by the rent the landlord can achieve).

In 1996 the average value of a Burgess Hill semi stood at £69,600,

today it stands at £362,500.

 Such is the attractiveness of semis, which are cheaper than detached houses but have most of the same benefits for families. Semi-detached houses were built in their hundreds of thousands by the Victorians and Edwardian's between the wars and through to the present day. Interestingly in the late 19^th Century and early 20^th century – they often weren’t referred to as semi-detached – but as villas!

So whilst Europeans live on top of each other in apartments us British chose, in the late Victorian and early Edwardian times, suburban comfort, being near but not too near, the neighbours! I once heard someone say the semi-detached house was a peculiar crossbreed that doesn’t stand on its own — it is inseparable from its neighbour — yet somehow still embodies a dream of suburban independence.

Over one in four houses in Burgess Hill is a semi-detached house.

There are 4,178 semi-detached properties in Burgess Hill and they represent 33.91% of all the households in Burgess Hill. Burgess Hill has such a mix of semi-detached properties with the older semis to more modern ones built in the last couple of decades. Especially with the older ones, the semi offered a hall to provided separation between the reception rooms and privacy for their occupants. Also the downstairs offered larger rooms to accommodate dining tables, whilst upstairs; bedrooms were smaller, yet cosy.

However, probably the most overlooked aspect of popularity for semis is the garden. The front garden, designed to separate the house from the world, and the back garden designed for private relaxation. The semi in the suburbs was relaxing, well presented, plumbed and enhanced by a garden so that when a window was opened the air had a chance of being genuinely fresh and it’s for all those reasons why 111 semi-detached houses have been sold in Burgess Hill in the last 12 months alone.  Still as popular today as they were with the Victorians all those years ago – some things just stand the test of time!