24% More Burgess Hill Home Owners Wanting to Move Than 12 Months Ago.

As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Mid Sussex to keep up with demand for homes to live in (be that tenants or homebuyers), it’s good to know more Mid Sussex home sellers are putting their properties on to the market than a year ago.

For example, at the start of 2007 there were 225 properties for sale in Burgess Hill but by July 2008, when the credit crunch was really beginning to bite, that number had risen to 405 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.

Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Burgess Hill property between the end of 2007 and Spring 2009.

However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Burgess Hill property prices have remained robust.  A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties. Nevertheless, if you had asked me a couple of years ago, I would have said we were beginning to see there was in fact not enough properties coming on to the market for sale. This means in certain sectors of the Burgess Hill property market, house prices were overheating because of this lack of supply.

So, it is pleasing to note, looking at the recent numbers, there are 24% more properties for sale in Burgess Hill today than a year ago.

There were 188 properties for sale 12 months ago, and today that stands at 234. It doesn’t sound a lot, yet this is a small step in the right direction to a more stable property market.

Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Burgess Hill say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Burgess Hill house sellers and potential house buyers, I do foresee the Burgess Hill Property Market will show steady yet sustained improvement during the first half of 2018.

What does this mean for Burgess Hill landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true that demand amongst FTB’s is increasing, albeit from a low base. Even with the new landlord tax rules, buy to let in Burgess Hill still looks a good investment, providing Burgess Hill landlords with a good income at a time of low interest rates and a roller coaster stock market.

If you are thinking of investing in bricks and mortar in Burgess Hill, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market comes greater choice.

146 First Timer Buyers in Burgess Hill Bought Their First Home in 2017.

A little bit of good news this week on the Mid Sussex Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. Looking at Burgess Hill, the data shows there were 146 first time buyers in the town, the largest number since 2006.

I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% and even 15%! Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49%, they even did a 3 year fixed rate 100% mortgage for 2.89%!

Interestingly, looking at the other end of the market, the buy-to-let investment in Burgess Hill was subdued, with only 30 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Burgess Hill – it’s just that the data isn’t available at such a granular level.

In terms of the level of mortgage debt in Burgess Hill, looking specifically at the RH15 postcode, there has clearly been a steady rise in borrowing over the last few years.

This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off with mature mortgaged homeowners in their 50’s and 60’s finally paying off their mortgage.

So, what does all this mean for the Burgess Hill Property Market?  Well, the stats paint a picture, but they don’t inform us of the whole story. The upper end of the Burgess Hill property market has been weighed down by the indecision around the Brexit negotiations and rise in stamp duty in 2014, when made it considerably more expensive to buy a home costing more than £1m. The middle part of the Burgess Hill property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Burgess Hill property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.

If you are in the market and selling now and want to ensure you get your Burgess Hill property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Burgess Hill home isn’t worth as much as you thought, but Burgess Hill buyers are now unbelievably discerning.

So, if you are thinking of selling your Burgess Hill property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Burgess Hill agents, will freely give that advice to you at no cost or commitment to you.

Mid Sussex Property Market – The 7.3% ‘New Build Premium’.

According to the National House Building Council (NHBC), more than 26,142 new homes were registered to be built in the South East last year, on par with 2016 levels of 26,147 dwellings. Great news when you consider it is one of the highest number of new builds in the region since the pre-recession levels of the Credit Crunch and the uncertainty of Brexit and the General Election.

So, when a landlord recently asked me why the brand-new property she was considering buying was a lot more expensive compared to a second-hand/existing property of similar type, accommodation, location and structure I thought this would make a fascinating topic to do some homework on; homework I want to share with the homeowners and landlords of Mid Sussex.

You might believe that the difference between purchasing a new build home against purchasing a second-hand/existing home is just individual preference. Some buyers/tenants like the ostentatious trendy modern feel of a new home, whilst others like a home that has stood the test of time.

So, what is the right answer? Well, I am going to be looking at some statistics that shows there is a real difference in the Mid Sussex District Council area’s property market when in to comes to new vs existing homes and the price paid. Looking at the average price paid for existing (second-hand) versus a brand new home since 1996, one can see from the graph it makes interesting reading.

On this second graph, one can see the percentage difference in average price paid between new and existing;

Yet possibly nothing is ever that easy, as there are issues with these statistics.

The overall average for the whole Mid Sussex District Council area for the ‘new build premium’ (new build premium being the additional price a buyer pays for buying a new property compared to a second-hand one) over the last 21 years has been 7.3%. These statistics actually show that it is problematic to compare like with like because it is impossible to completely separate all the different factors of type, accommodation, location and structure etc.

One would have to have a mirror image second-hand Mid Sussex home and a duplicate new build right next door to each other, then calculate out which Mid Sussex house buyers or buy to let landlords would pay more for? Perhaps if everything was the same (all things being equal), there might not be any difference in what buyers would be prepared to pay. But then again, it’s like new cars versus cars that have a few hundred miles on the clock; there is always a difference on the forecourt, because things are never wholly equal.

What I do know is that my statistics of the Mid Sussex property market show that new build apartments are worth more to people than their second-hand equivalents, whilst the difference is negligible between new build detached houses and second-hand detached houses.

However, I believe the really important lesson in all these statistics is the fact that ‘new build premium’ for new-build versus buying a second-hand property increases in a buoyant market and reduces in a tougher market. So, if you want to buy new and the only consideration is money, try buying in a tougher challenging property market.