Sussex Property Market View
Spring 2016 Property Market Update
What’s happening in the property market? My favourite question and one I am asked all the time! Well, we finished 2015 on a high according to the Halifax Price Index and they have reported house prices in the three months to March 2016 were 2.9% higher than in the three months to December 2015.
Mortgage approvals are on the up, however despite more homes coming to the market, supply remains low which is resulting in increasing prices. The average house price in the South East in January 2015 was £357,354 and this rose to £383,787 in January 2016 showing an annual change of 7.3%. The RICS predicts we will see a similar rise this year with the South East seeing an increase of 7% against an increase in London of 5%.
These actual and predicted increases are good for capital growth. They show an excellent return for medium to long term investment and probably a better return on investment than stocks and shares.
Is the market going to slow down? Probably not. Martin Ellis, the Halifax housing economist has said ‘Worsening sentiment regarding the prospects for the UK economy and uncertainty ahead of the European referendum in June could result in some softening in the housing market over the next couple of months. Current market conditions, however, remain very tight with an acute supply/demand imbalance continuing despite an improvement in the number of properties coming on to the market for sale in recent months. This, together with continuing low interest rates and a healthy labour market, indicate that house price growth is set to remain robust.”
We are seeing new landlords come to the market, despite the increased Stamp Duty imposed on buy to let investors. Many are taking advantage of the changes to pension legislation and using their cash sums to purchase property. Yes, the tax changes for landlords could have a negative impact, but only if the industry allows it to through negatively talking about them.
People generally invest for the longer term and providing they have been advised correctly and given themselves a financial buffer for any further changes, they can do very well in the market. With a carefully sourced long term tenant in their property they could receive a good monthly income and strong capital growth on their investment.
Carefully sourced long term tenants are key to a good return on the investment. They give a certainty to the investment as there will be longevity to the monthly income. The property will have fewer void periods which saves the landlord money in rent whilst the property is empty and also in fees payable to find new tenants. By choosing tenants based on the advice of an experienced lettings agency and saying no to ‘difficult’ tenants who do not look after the property then your investment should be in safe hands and providing a good return.
Tenants are plentiful in the current property market as the required property stock is just not available or indeed affordable for many. So buy to let is still a popular investment. Providing landlords are making provisions for the entry and exit costs associate with the buy to let market and use a reputable and experience agent, the lettings market is a good proposition.
if you are thinking of buying a property for rental and would like to discuss this, or if you see a property for sale and would like an opinion on the rental return and investment potential, email me at email@example.com or call me on 01403 248222.
Posted on 4 May 2016
Sign up for our newsletter
With these updates, I follow the property market across Sussex and pass all our knowledge and findings on to you, the buyers, sellers, tenants and landlords of Sussex.
If you are thinking of buying a property for rental and would like to discuss this or if you see a property for sale and would like an opinion on the rental return and investment potential, email me at firstname.lastname@example.org or call me on 01903 742354.