Property price hike! Cost of Chichester houses increasing by staggering £463 a week

House Price Rise

Average property prices in Chichester have risen from £346,357 to £370,452 over the past 12 months; an increase of £24,095, which is £463 per week!

That is greater than the UK’s average property price increase (up £189 per week) as well as other parts of West Sussex and Hampshire, including Bognor Regis (up £273 per week), Portsmouth (up £269 per week) and Worthing (up £171 per week).

Rather significantly, it is also more than the average salary local to Chichester (£30,443) when you factor tax into the equation!

The greatest percentage increase by property type in Chichester came from semi-detached houses (up 7.3%). Meanwhile, the lowest gain came from terraced houses, albeit they still managed to rise a healthy 6.3% on average. Due to their higher value though, it was detached houses that produced the greatest monetary gain for their owners; increasing by an average of £37,939, or £730 per week.

It was a similar story in Bognor Regis, albeit the gap between the best and worst performer was wider. Bognor Regis’ semi-detached houses have increased in price by an average of 6.3%, whilst their terraced homes have increased by ‘just’ 4.5%. That means Bognor Regis’ best performing property type can only match the percentage gain shown by Chichester’s worst performing property type. This again shows that property in Chichester typically outperforms Bognor Regis in regards to capital growth.

This is an important distinction when investing in property in Chichester or Bognor Regis, and is something I often discuss with new landlords. The current rental yields available in Bognor Regis are, on average, greater than they are in Chichester.

Historically though this has been more than offset by the greater capital gain Chichester has seen in property prices compared to Bognor Regis. It is, however, important to determine what is most important to you (rental income or capital growth) as the two gains are both distributed and taxed differently.

Similarly it is important to consider what strategy is best if you are investing a lump sum; buying one larger property or two (or more) smaller, cheaper, properties. Typically, the more expensive the property the lower the rental return will be. Conversely though, it is the more valuable properties that generally outperform the cheaper ones in regards to increasing in value.

There is also something to be said of having fewer tenants, rental payments and boilers to keep on top of, particularly for those with a busy schedule. You do, however, run the risk of putting “all your eggs in one basket” should you encounter a void period or a problematic tenant; whereas having several smaller units helps spread this risk.

One thing that is certain is that house price increases across the board has led to greater demand for rental property from good-quality tenants who want the benefits of living in Chichester but have been priced out of the local market.

About the Author

Clive Janes
Clive Janes is the author of the Chichester Property News and owner of CRJ Lettings.