474 Properties For Sale in Crawley ... Is this an issue?

2017 has started with some positive interest in the Crawley property market.  Taking a snap shot of the Crawley property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Type of Crawley Property	Number of Properties on the Market 12 months ago	Number of Properties on the Market now	% change
Detached	94	104	+11%
Semi	68	113	+66%
Terraced	59	111	+88%
Apartment	91	101	+11%

So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 474 properties for sale today compared with 337 a year ago, a rise of 41%.

Next, Crawley asking prices, compared

to the same as a year ago, are 5% lower.

With that in mind, I wanted to look at what property was actually selling for in Crawley. Taking my information from the Land Registry, the last available six months property transactions for RH10 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

	Jun-16	Jul-16	Aug-16	Sep-16	Oct-16	Nov-16
Detached	£477,098 (32)	£469,781 (27)	£510,269 (21)	£480,618 (17)	£495,556 (17)	£606,909 (11)
Semi Detached	£347,988 (17)	£350,118 (17)	£336,844 (17)	£349,883 (24)	£332,992 (16)	£340,630 (15)
Terraced	£293,091 (29)	£301,784 (32)	£290,288 (38)	£299,280 (31)	£283,902 (26)	£294,765 (17)
Flat	£233,163 (37)	£215,631 (18)	£208,517 (23)	£203,729 (25)	£214,840 (16)	£200,503 (15)
All	£333,126 (115)	£342,282 (94)	£325,947 (99)	£318,954 (97)	£327,616 (75)	£341,448 (58)

 

So what does all this mean for the property owning folk of Crawley?

Well, with more property on the market than a year ago and asking prices 5% lower, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Crawley property ladder, have much more price information about the Crawley property market at their fingertips than ever before.

Those Crawley people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed some homeowners getting too excitable about their property and requesting an inflated asking price. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Crawley property-market has an unassailable demand for property – there is one saying that always rings true - as long as the property is being marketed at the right price it will sell.

Crawley’s housing affordability hits a ratio of 8.78 to 1

A Crawley homeowner emailed me last week, following my article posted in the Crawley Property Blog about the change in attitude to renting by the youngsters of Crawley and how they thought it was too expensive for first time buyers to buy in Crawley.  There can be no doubt that buy to let landlords have played their part in driving up property values in Crawley (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Crawley.

They asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Crawley is?  The best measure of the affordability of housing is the ratio of Crawley Property Prices to Crawley Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Crawley property was 7.26 times higher than the average annual wage in Crawley).

 

1998	2000	2002	2004	2006	2008	2010	2012	2014	2016 (EST)
4.09	4.57	5.84	7.00	7.00	7.52	6.17	6.39	7.26	8.78

As a graph it looks even more startling....

 

This deterioration in affordability of property in Crawley over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house.  

... but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).  

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 1 bed apartment in Crawley for around £170,000 and only need to find £8,500 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  

I think we as a Country have changed ... renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation ... because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.