Private Renting set to grow by 2,700 Crawley households by 2025

I was having a most interesting chat the other day with a Crawley landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Crawley, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the Crawley Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Crawley.

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Crawley? The fact is, as a country, we are facing a precarious rental shortage and need to get Crawley building in a way that benefits a cross-section of Crawley society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 42,900 households in Crawley, currently 16,500 tenants live in 6,300 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Crawley needs to rise by 2,700 (i.e. 42.8%) .. taking the total number of rented properties in the town to 9,000.

That means Crawley landlords need to buy around 300 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 7,100 people will want to live in all those 'additional' Crawley rental properties – so why is the government penalising landlords?

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Crawley house prices, the majority of new Crawley households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Crawley society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.

Crawley Property Investment: 3 Bedroom Home in Tilgate

Yield or capital appreciation – which is better?  Why not go for both.  I have seen this great 3 Bedroom House on the market with local agent Taylor Robinson in the Tilgate area of Crawley.  One of the biggest headaches for Tilgate residents is parking and that problem has already been solved with the addition of the front driveway on this house. You can view the listing by clicking the link below.

http://www.rightmove.co.uk/property-for-sale/property-56591059.html

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.  Current rental prices range from £1250 to £1350 for 3 bedroom houses in the neighbourhood thereby easily achieving the fabled 5% yield.  It looks like the property could do with some updating which may explain the recent sales price reduction but for the canny investor this would be the opportunity to add value.  Similar properties that have been updated have been marketed at prices in excess of £320,000.  Landlords would need to take into consideration the stamp duty on the asking price of this property would be £13,200 but these properties tend to generate long term tenancies. Five to seven year tenancies are not uncommon allowing plenty of time to recoup the additional stamp duty especially if you consider that average house prices have increased by 160% since the millenium.

3 Bedroom House For Sale

House Prices in Crawley rise by more than 19% in the last 18 months

Over the last month, the Crawley property market has seen some interesting movement in house prices, as property values in the Crawley Borough Council area rose by 0.5% in the last month, to leave annual price growth at 13.3%. These compare well to the national figures where property prices across the UK saw a monthly uplift of 0.42%, meaning the annual property values across the Country are 8.3% higher, this is all despite the constraining factors of Stamp Duty changes in the spring and more recently our friend Brexit.

Looking at the figures for the last 18 months makes even more fascinating reading, whereby house prices are 19.6% higher, again thought provoking when compared to the national average figure of 13.6% higher.

However, it gets more remarkable when we look at how the different sectors of the Crawley market are performing. Over the last 18 months, in the Crawley Borough Council area, the best performing type of property was the semi, which outperformed the area average by 1.43% whilst the worst performing type was the apartment, which under-performed the area average by 1.26%.

Now the difference doesn’t sound that much, but remember two things, this is only over eighteen months and the gap of 2.69% (the difference between the semi at +1.43 and apartments at -1.26%) converts into a few thousand pounds disparity, when you consider the average price paid for a semi-detached property in Crawley itself over the last 12 months was £322,700 and the average price paid for a Crawley apartment was £194,300 over the same time frame.

I know all the Crawley landlords and homeowners will want to know how each of the property types have performed, so this is what has happened to property prices over the last 18 months in the area...

·         Overall Average          +19.6%

·         Detached                     +19.4%

·         Semi Detached            +21.3%

·         Terraced                      +19.8%

·         Apartments                 +18.1%

 So what does all this mean to Crawley homeowners and Crawley landlords and what does the future hold? 

When I looked at the month-by-month figures for the area, you can quite clearly see there is a slight tempering of the Crawley property market over these last few months. I have mentioned in previous articles that the number of properties on the market in Crawley has increased this summer, something that hasn’t happened since 2008. Greater choice for buyers means, using simple supply and demand economics, that top prices won’t be achieved on every Crawley property. You see, some of that growth in Crawley property values throughout early 2016 may have come about because of a surge in house purchase activity, an indirect result of the increase in stamp duty on second homes from April, thus providing a temporary boost to prices.

However, it may be possible the recent pattern of robust employment growth, growing real earnings and low borrowing costs will tilt the demand/supply seesaw in favour of sellers and exert upward pressure on prices once again in the quarters ahead.

...And Crawley property values, assuming that everything goes well with Brexit, I believe in twelve months’ time we should see values in the order of 7% to 9% higher.