Crawley First Time Buyers borrow £70m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Crawley property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 1,458 properties have sold (and completed) in Crawley, worth £434.6m. Interestingly the number of properties changing hands in Crawley has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Crawley buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Crawley property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.  

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Crawley itself, first time buyers have borrowed more than £70.08m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Crawley economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

 

The Apex Apartments construction site in Crawley

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Crawley, at this moment in time there are 286 properties for sale, compared to 337 properties a year ago. All this will be welcome news amongst Crawley first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners. 

Crawley Property Market - Eight Months On From The Brexit Vote

It was late May 2016, The Right Hon. Member for Tatton, Mr George Osborne, published an official HM Treasury analysis stating UK house prices would be lower by at least 10% (and up to 18%) by the middle of 2018 compared with what is expected if the UK remained in the European Union. So, eight months on from the Referendum, are we beginning to show signs of that prophecy? The simple answer is yes and no.

Good barometers of the housing market are the share prices of the big UK builders. Much was made of Barratt’s share price dropping by 42.5% in the two weeks after Brexit, along with Taylor Wimpey’s equally eye watering drop in the same two weeks by 37.9%. Looking at the most recent set of data from the Land Registry, property values in Crawley are only 0.17% up month on month (and the month before that, they had decreased by 0.67%) – so is this the time to panic and run for the hills?

Doom and Gloom then? Well, let me consider the other side of the coin.

Well, as I have spoken about many times in my blog, it is dangerous to look at short term. I have mentioned in several recent articles, the heady days of the Crawley property prices rising quicker than a thermometer in the desert sun between the years 2011 and late 2016 are long gone – and good riddance. Yet it might surprise you during those impressive years of house price growth, the growth wasn’t smooth and all upward. Crawley property values dropped by an eye watering 2.11% in February 2013 and 0.53% in December 2014 – and no one batted an eyelid then.

You see, property values in Crawley are still 8.75% higher than a year ago, meaning the average value of a Crawley property today is £322,800. Even the shares of those new home builders Barratt have increased by 43.3% since early July and Taylor Wimpey’s have increased by 37.3%. The Office for Budget Responsibility, the Government Spending Watchdog, recently revised down its forecast for house-price growth in the coming years - but only slightly.

The Crawley housing market has been steadfast partly because, so far at least, the wider economy has performed better than expected since Brexit. There is a robust link between the unemployment rate and property prices, and a flimsier one with wage growth. Unemployment in the Crawley Borough Council area stands at 2,900 people (4.5%), which is considerably better than a few years ago in 2013 when there were 4,600 people unemployed (8.2%) in the same council area.

However, inflation is the only thing that does worry me. Looking at all the pundits, it will get to at least 3% (if not more) in the latter part of 2017 as the drop in Sterling in late 2016 renders our imports with higher prices. If that transpires then the Bank of England, whose target for inflation is 2%, may raise interest rates from 0.25% to 2%+. However, that won’t be so much of an issue as 81.6% of new mortgages in the UK in the last two years have been fixed-rate and who amongst us can remember 1992 with Interest rates of 15%!

Forget Brexit and yes inflation will be a thorn in the side – but the greatest risk to the Crawley (and British) property market is that there are simply not enough properties being built thus keeping house prices artificially high. Good news for those on the property ladder, but not for those first-time buyers that aren’t! In the coming weeks in my articles on the Crawley Property Market, I will discuss this matter further!

Crawley Property Investment - Maisonette with 6% yield

I have previously highlighted many Tilgate properties & if you missed those here is another.

This great little maisonette is on to the market with local agent Taylor Robinson in the Tilgate area of Crawley and would make a solid rental investment, you can view the details by clicking the link below.

http://www.rightmove.co.uk/property-for-sale/property-58171939.html

Having checked through the data these properties were selling for £130,000 in 2006, today’s asking price represents an astonishing 54% increase in capital value over the last decade.  Built by the new town commission between 1955 & 1958 the area of Tilgate included a diverse range of flats, houses, maisonettes and bungalows designed to ensure a balanced social mix in the neighbourhood.  This maisonette benefits from generous room sizes, a separate kitchen and its own private garden.  Always popular with tenants, I have let a number of these properties, the last one rented over a year ago at £925 per month which even at today’s asking price is still a 6% yield.  Famed for its park, nature centre and lake, the Tilgate area of Crawley is favoured by young families because of the access to schools and the extensive leisure facilities.  Not to mention the well-equipped K2 centre with pools, gym and sports facilities.  Investors would need to take into account the £7500 stamp duty due if the purchase price remained at £200,000.