What is really happening in the Mid Sussex Property Market?

Well it’s been a few months since Brexit and as we settle into the autumn with Great British Bake Off, Strictly and the Football season. The newspapers are returning to their mixed messages of good news, bad news and indifferent news about the Brit’s favourite subject after the weather, the property market.

The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way. At one end of scale are Kensington and Chelsea, which has seen average prices drop in the last twelve months by 6.2% whilst in our South East region, house prices are 12.3% higher. But what about Mid Sussex?

Property prices in Mid Sussex are 15.3% higher than a year ago and 1.9% higher than last month.

So what does this mean for Mid Sussex landlords and homeowners? Not that much unless you are buying or selling in reality. Most sellers are buyers anyway, so if the one you are buying has gone up, yours has gone up.  Everything is relative and what I would say is, if you look hard enough, there are even in this market, there are still some bargains to be had in the Mid Sussex area.

However, the most important question you should be asking though is not only is what happening to property prices, but exactly which price band is selling? I like to keep an eye on the property market in Mid Sussex on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Mid Sussex. 

If you look at Burgess Hill for example, and split the property market into four equalled sized price bands. Each price band would have around 25% of the property in Burgess Hill, from the lowest in value band (the bottom 25%) all the way through to the highest 25% band (in terms of value). 

• ·         Nil to £300k            57 properties for sale and 83 sold (stc) i.e. 59% sold
• ·         £300k to £375k        45 properties for sale and 41 sold (stc) i.e. 47% sold
• ·         £375k to £450k        48 properties for sale and 22 sold (stc) i.e. 31% sold     
• ·         £450k +                   52 properties for sale and 21 sold (stc) i.e. 28% sold

Fascinating don’t you think that it is the lower Burgess Hill market that is doing the best?

The next nine months’ activity will be crucial in understanding which way the market will go this year after Brexit but, Brexit or no Brexit, people will always need a roof over their head and that is why the property market has ridden the storms of oil crisis’ in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the credit crunch together with the various house price crashes of 1973, 1987 and 2008. 

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. There is always a silver lining when it comes to the property market!

Mid Sussex Property Market in 2017 and Beyond.

As the trees turn from green to hues of red and brown, the Mid Sussex property market has a confident feel to it. With the underlying fundamentals of a continued lack of properties being built, a shortage of properties (both in terms of quantity and quality) coming to the market and the continued low mortgage rate environment, buyer enquiries from first time buyers and buy to landlords is strong and motivation is even stronger, given those inexpensive lending rates and general demand caused by under supply.

Now of course, there are a few potential hurdles coming towards us in the coming months that could affect the Mid Sussex (and UK) property market. Mrs. May has yet to get her teeth into Brexit negotiations and we don’t know what the US Presidential elections might do to the money markets around the world, meaning that on the run up to Christmas, some savvy buyers may take advantage of the lack of certainty by making cheeky offers. I don’t believe these will have a huge impact on property values (like the 2008 Credit Crunch).

You see, property ownership, whether it’s for yourself as a homeowner or buy to let landlord, is a long term investment. In fact, focusing on buy to let, a number of landlords who own property in Mid Sussex have made contact with me recently asking for my thoughts on the future of the buy to let market in Mid Sussex. Well, as the Politician Edmund Burke said in the 18th century, "Those who don't know history are destined to repeat it", in other words to see the future you must look into the past.

Since the Millennium, the housing market has had everything thrown at it. The recent Brexit, last year’s General Election, the near melt down of the World Economy with the Credit Crunch, The Dot Com boom and bust, the housing market crisis in 2008, the housing boom of 2001 to 2004; the list goes on. In fact here is a graph (courtesy of the Land Registry) of average Property values since the Millennium in the Mid Sussex District Council area.

Even though we had the Dot Com bubble burst in 2000, two years later in January 2002, property values in the Mid Sussex District Council area have risen from £126,600 (in Jan 2000) to £166,400 and kept rising to February 2008, when they peaked at £284,500. Then we had the Credit Crunch and property prices continued to fall until April 2009, where they averaged £213,100, but look where they are now £358,300.

The point I am trying to get across is long term future property values are more helpful to landlord investors than the month by month headline grabbing micro movements in the property market.  Look at the graph and you will see the growth in property values is an upward trend BUT, the average darts about as each month goes by.  So don’t watch the property indexes and panic if values drop next month or the month afterwards, because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail, values always dropped slightly around Christmas, but people will always need a roof over their heads, and if they can’t buy and the council aren’t building anymore, only buy to let landlords can meet that demand.