Junction Road, Burgess Hill. The road where people move the most.

Many folks say moving home is the most stressful thing. Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

When you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!). Then you put your property on the market with an estate agent, find a buyer for your Burgess Hill property, agree a price for both, and then instruct solicitors. The property becomes sold ‘subject to euphemism’ sorry ‘contract’ as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through phew - stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Burgess Hill people think so.

In the last 12 months, 445 families have sold and moved home in Burgess Hill (RH15)

Yet the question I want raise is; do people on certain streets in the RH15 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the RH15 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Junction Road is the winner with an average of 15.96 house sales per year (since 1995) as on the graph below.

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street.  As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.

However, I still felt the information wasn’t telling the whole story; some roads in Burgess Hill have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality.

In the next article I will answer that question in great depth and the results should (as they did me) certainly raise an eyebrow. The question is; do you live on one the top 25 Burgess Hill most saleable streets in Burgess Hill?

14.8% Drop in the Mid Sussex Property Market.

The number of residential property transactions in Mid Sussex will be 14.8 per cent lower in 2018, compared to 2017. 

 

According to my research, the seasonally adjusted statistics for our local authority area suggest with the number of properties already sold in 2018, and the number of properties currently under offer or sold subject to contract (allowing for property sales to fall through before exchange of contracts) we, as an area, will end the year 14.82 per cent lower compared to 2017.

So why are transaction numbers so important to Mid Sussex homeowners, Mid Sussex landlords and potential first-time buyers?

Many economists and property market commentators believe transaction numbers give a more precise and truthful indicator of the health of the property market than just house values. In the six years before the Credit Crunch in 2007/8, the average number of completed property transactions in the local area (the local authority covered by Mid Sussex) stood at 3,253 per year; yet in the three years following the Credit Crunch, on average, only 2,045 homes were changing hands per year in the area.

Roll the clock forward to more recent times and last year, in 2017, 2,665 homes changed hands (i.e. transacted and sold) in the area, not far off the local authority’s 23 year overall average of 2,840 homes per year.

In the past, a reduction in the number of properties selling has often been believed to be the first signal of a down turn in the housing market as a whole. Although, the down turn of the credit crunch years (2007/2008) was more a free-fall than a subtle down turn. Look at the graph and the ‘so-called’ halcyon days of the 2000 to 2006 property market were a roller coaster when it came to the number of transactions. House prices were rising in the six/seven years before the credit crunch (2000 to 2006), albeit, the rate of growth of Mid Sussex house prices did slow in late 2005 and 2006 (which does fit in nicely with the graph).

In other articles, I have mentioned the change in the number of houses for sale today compared to last year and further back. Although, the market has seen in recent months (i.e. the short term) an increase in the number of properties for sale, fundamentally, in the medium term, there has been an underlying trend in the reduction of properties coming onto the market for sale in Mid Sussex (and nationally) and this has been one of the main drives behind the lack of properties selling. Mid Sussex people aren’t moving as much as they were 30 years ago meaning fewer houses are selling each year.

However, this short-term increase in properties for sale hasn’t been even across the board. In certain sectors of the Mid Sussex property market, there is a glut of properties on the market at the moment and so prices and values are dropping on those types as sellers compete for the limited amount of buyers; yet there are other sectors of the Mid Sussex property market where there is a dearth, a shortage of property, and buyers are fighting tooth and nail with silly offers to try and secure the sale. This means, there are some bargains for you Mid Sussex buy to let landlords. If you look hard enough, you could spot the same trends I have seen in Mid Sussex and find the individual property micro markets that fall into that first sector (with its glut).

So, if you want the inside track on the Mid Sussex property market, whether you are a landlord of ours or another agent, I am more than happy to guide you in the right direction if you drop me a line or an email.

So, to conclude, I believe we will finish on 2,270 housing transactions by the end of the year in the area; not too far off last year’s figure or the long-term 23-year average. Looking at the short term future, now it’s true some (not all) but some potential purchasers of property in Mid Sussex may be exhibiting more caution because of concerns that the Bank of England will continue to put up interest rates– to which I reply – yes of course they will when they are only ultra-low at 0.75%. Anyway, that is the reason why 90%+ of new mortgages over the last nine months have been on a fixed rate. Also, if they do go up a few percentage points – they are nothing compared to the 12%, 14%, even 15% mortgage rates many of my landlords saw in the early 1990’s.

We can all speculate (and I appreciate the irony of that as I write this article) but all I say to any Mid Sussex landlords, Mid Sussex homeowners or Mid Sussex first time buyers is act according to your own life cycle, budget on a modest increase in interest rates in the coming few years (yet protect yourself by fixing it), consider your own circumstances and finally, what you can afford.

Additional 983 Haywards Heath Rented Homes Required by 2027.

I have been doing some research, looking both at National and Regional reports on the demand and supply of property and people together with future projections on the economy, population and family demographics with some interesting results.  According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social (aka council and housing association) stock increased by 12,000 dwellings.

It was the private rental figures that caught my eye.  With eight or nine years of recovery since the Credit Crunch, economic recovery and continuing low interest rates have done little to setback the mounting need for rented housing.  In fact, with house price inflation pushing upwards much quicker than wage growth, this has meant to make owning one’s home even more out of reach for many Millennials, all at a time when the number of council/social housing has shrunk by just over 2.5% since 2003, making more households move into private renting.

There are 5,022 people living in 2,293 privately rented

properties in Haywards Heath.

In the next nine years, looking at the future population growth statistics for the Haywards Heath area and making careful and moderate calculations of what proportion of those extra people due to live in Haywards Heath will rent as opposed to buy, in the next ten years, 2,152 people (adults and children combined) will require a private rented property to live in.

Therefore, the number of Private Rented homes in Haywards Heath will need to rise by 983 households over the next nine years,

That’s 109 additional Haywards Heath properties per year that will need to be bought by Haywards Heath landlords, for the next nine years to meet that demand; and remember, I am being conservative (with a small ‘c’) with those calculations, as demand for privately rented homes in Haywards Heath could still rise more abruptly than I have predicted as I would ask if Theresa May’s policies of building 400,000 affordable homes (which would syphon in this 5-year Parliamentary term) is rather optimistic, if not fanciful?

So, one has to ask wonder if it was wise to introduce a buy to let stamp duty surcharge of 3% and the constraint on mortgage tax relief could curtail and hold back the ability of private landlords to expand their portfolios?

Well a lot of landlords are taking on these new hurdles to buy to let and working smarter.  Buying the property at the right price and using an agent to negotiate on your behalf (we do this all the time) and the 3% stamp duty level isn’t an issue.  Incorporating your property portfolio into a Limited Company is also a way to circumnavigate the issues of mortgage tax relief (although there are other hurdles that need to be navigated on that tack), but just look at the growth of proportion of Buy to Let properties in the Country since the summer of 2016. Something tells me smart landlords are seeing these challenges as just that; challenges which can be overcome by working smarter.

I have a steady stream of Mid Sussex landlords every week asking me my opinion on the future of the Mid Sussex property market and their individual future strategy and, whether you are a landlord of mine or not, if you ever want to send me an email or pop into my office to chat on how you could navigate these new Buy to Let waters it will be good to speak to you (because you wouldn’t want other landlords to have an advantage over you – would you?)