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.

Crawley Property Market in 2017 and Beyond

As the trees turn from green to hues of red and brown, the Crawley property market has a confident feel to it. With the underlying fundamentals of a continued lack of properties being built, a shortage of properties (both in terms of quantity and quality) coming to the market and the continued low mortgage rate environment, buyer enquiries from first time buyers and buy to landlords is strong and motivation is even stronger, given those inexpensive lending rates and general demand caused by under supply.

Now of course, there are a few potential hurdles coming towards us in the coming months that could affect the Crawley (and UK) property market. Mrs. May has yet to get her teeth into Brexit negotiations and we don’t know what the US Presidential elections might do to the money markets around the world, meaning that on the run up to Christmas, some savvy buyers may take advantage of the lack of certainty by making cheeky offers, but I don’t believe these will have a huge impact on property values (like the 2008 Credit Crunch).

You see, property ownership, whether it’s for yourself as a homeowner or buy to let landlord, is a long term investment. In fact, focusing on buy to let, a number of landlords who own property in Crawley have made contact with me recently asking for my thoughts on the future of the buy to let market in Crawley.  Well, as the Politician Edmund Burke said in the 18^th century, "Those who don't know history are destined to repeat it." .. in other words, to see the future you must look into the past.

Since the Millennium, the housing market has had everything thrown at it. The recent Brexit, last year’s General Election, the near melt down of the World Economy with the Credit Crunch, The Dot Com boom and bust, the housing market crisis in 2008, the housing boom of 2001 to 2004 .. the list goes on. In fact here is a graph (courtesy of the Land Registry) of average Property values since the Millennium in the Crawley Borough Council area.

 

Even though we had the Dot Com bubble burst in 2000, two years later in January 2002, property values in the Crawley Borough Council area have risen from £89,600 (in Jan 2000) to £114,800 .. and kept rising to November 2007, when they peaked at £202,600. Then we had the Credit Crunch and property prices continued to fall until April 2009, where they averaged £156,900 .. but look where they are now…  £275,000

The point I am trying to get across is long term future property values are more helpful to landlord investors than the month by month headline grabbing micro movements in the property market.  Look at the graph and you will see the growth in property values is an upward trend BUT, the average darts about as each month goes by.  So don’t watch the property indexes and panic if values drop next month or the month afterwards, because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail, values always dropped slightly around Christmas, but people will always need a roof over their heads, and if they can’t buy and the council aren’t building anymore  .. only buy to let landlords can meet that demand.

Crawley landlords are being hit in the pocket with the new up and coming taxation rules and yes we might have a bumpy ride on the run up to Christmas (because of the points raised earlier), Brexit or no Brexit, but the trend will be a slow and steady upward momentum of property values, demand for rental properties and yields in the Crawley property market into 2017 and beyond.