Bexhill House Prices up 29.3% in the last 5 Years

Over the last 5 years, we have seen some interesting subtle changes to the Bexhill property market as buying patterns of landlords have changed ever so slightly.

The background to this story was the recently published set of buy-to-let (BTL) lending statistics. Roll the clock back 12 months and 6,700 BTL mortgages were granted (in the same month) for £900m, meaning the average BTL mortgage was £134,200. Looking at last month’s figures, and as one might expect with the Brexit issue overhanging the property market, the lending figures were down, yet not by the amount I originally thought. Last month, just over 6,100 new buy-to-let mortgages were granted for a total sum of £800m (meaning the average landlord mortgage was a respectable £131,100). Yet, when I looked back to the boom year of the 2014 property market, in the corresponding same month, only £1,030 million was borrowed on 8,300 buy-to-let properties (meaning the average buy-to-let mortgage was £124,100). It seems Brexit is having no effect on landlords buying habits.

Looking closer to home in Bexhill, throughout 2018, I have been regularly chatting to more and more landlords, be they seasoned professional Bexhill BTL landlords or FTL’s (first time landlords) and their attitude is mostly positive. Instead of reading the scare-papers (oops sorry newspapers), those Bexhill landlords that look with their eyes, will see the Bexhill property market is doing reasonably well, with medium term rents and property values rising; as quite obviously from the mortgage figures .. landlords are still buying.

The question I get asked all the time is .. “What type of buy-to-let property should I buy?  You can make money from property through both the rent (expressed as a yield when compared to the value of the property) and how the actual value of the home itself changes.

Since 2014, property values in Bexhill have risen by 29.3%.

We have records of what each type of property (i.e. Detached/Semi/Terraced/Apartments) has achieved per square metre going back 20 years … and looking back over the last 5 years, these are the numbers ..

They all look to have similar percentage uplifts, however as you can see from the table there is in fact some variation throughout and although only slight this can equate to thousands of pounds in monetary terms.

This has proved that semis and terraced houses have performed the best .. although like the £/Sq.M figures, these are just averages. When investing, whilst Bexhill apartments haven’t been the best performers in terms of capital growth, they do tend to generate a slightly better yield than houses, probably because several sharers can afford to pay more than a single family. But houses tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built.

Now these are of course averages, but it gives you a good place to start from. The bigger picture here though is this – irrespective of what is happening in the world, be it Brexit/no Brexit, China, Trump, whatever, Bexhill people still need a roof over their heads and we as a Country haven’t built enough homes to keep up with the demand since the late 1980’s. This means even if we have a short term wobble in 2019 when it comes to property values ..in the medium term, demand will always outstrip supply and prices and rents will increase – because, I doubt the local authority, let alone Westminster, have the billions of pounds required to build the one hundred thousand Council houses per year nationally for the next decade to fix this issue – meaning as the population increases, the only people who can fulfil the demand for accommodation in the medium term is the private BTL landlord.

Before I go …on average, housing associations and local authorities have built around 26,500 houses each year since 2010. The Labour government had a lower average, building about 19,000 homes per year, yet in the 1960’s, under both administrations, 180,000 councils were built per year!

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Bexhill Property Market – Outlook for 2019

Bexhill property values are currently 1.9% higher than at the end of 2017, notwithstanding the uncertainty and threats over the potential impact of Brexit in 2019. This has exceeded all the predictions (aka guesses) of all the City of London economists, in an astonishing sign of strength for the local Bexhill and wider national economy.

Nevertheless, the statistics from the Land Registry come after a lethargic year for the number of properties in Bexhill compared to the actual prices achieved for those properties.  All this, against a framework of amplified political ambiguity and ensuing years of rising Bexhill property values that have reduced the affordability of homes in the locality.

The average value of a Bexhill property today,

currently stands at £291,900

Looking in finer detail, it isn’t a surprise that 793 property sales in Bexhill over the last 12 months is somewhat lower than the long-term average over the last 20 years of 1,094 property sales per year in Bexhill as the long-term trend of people moving less has meant a decline in the number of property transactions.

I believe locally, Bexhill property value growth will be more reserved in 2019 after two decades of weaker wage rises. One of main drivers in the demand (and thus the price people are prepared to pay for a home) is the growth of peoples wage packets. Interestingly, wage inflation over the last six months has risen from 2.4% in the late summer to its current level of 3.3% (which is higher than the average since the Millennium, which has been a modest 2.1%). One of the reasons why wages are growing in the short term is the unemployment rate in the country currently only stands at 4.1%, continuing to stay close to its lowest level since the 1970’s.

However, even though Bexhill salaries and wages are rising comparatively higher than they were last year, looking over the long term, Bexhill property values are 132.9% higher than they were in January 2002, yet average salaries are only 76.1% higher over the same time frame. This means over the last few years, with average property values so high comparative to salary/wages, many Bexhill potential buyers have been priced out of being able to purchase their first home.

At first glance, these stats are actually rather positive during this reported time of political uncertainty and the height of Brexit commotion … because I genuinely believe that to be the case. The press have always looked for the bad news (well they do say it is that that sells newspapers), and whilst I am not entering into the pros and cons of Brexit itself, the numbers do stack up quite well since the Brexit vote took place nearly 3 years ago.

Moving forward, when taken with the recent reduction in short to medium term number of property transactions (i.e. the number of Bexhill properties sold), it should be noted that a lot of the this buoyant house price increase has a lot more to do with a shortage of properties on the market rather than an uplift in the Bexhill housing market generally.

And we can’t forget that Bexhill isn’t in its own little bubble, as there are noteworthy differences across the UK in property value inflation. House prices in London and the South East have hardly risen or even fallen in some places, whilst in the Midlands, North and other parts of the country they have generally increased. 

Looking forward, I would say to the homeowners and buy to let landlords of the locality that I expect Bexhill house price growth to remain stable between 0.8% and 1.6% by the end of this year (although they could dip slightly during the summer) … as long as nothing unexpected happens in the world economically or politically of course. 

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