Property prices in Chichester are up 30 per cent in the past five years, which means most property sales now go through at a higher price than the previous owner paid.
In some cases, properties are being sold for far more than they were just a few years ago, tempting some people into “flipping” the property they bought during the credit crunch.
A good example of this is a four-bedroom house in Graydon Avenue that sold for £510,000 in October. That’s 75 per cent more than the £292,000 it sold for in September 2008, which was when the credit crunch was just about kicking into top gear. When you consider the price had only risen 12 per cent in the six years prior to this sale (when it had sold for £260,000 in December 2002) the increase in the past nine years is even more astounding.
All time high house prices are also allowing the “accidental landlords”, who decided to rent out their former homes rather than sell them at a price they didn’t deem acceptable, to now offload their old property. This is adding fuel to the noticeable drop in the number of rental properties that are available in Chichester.
Even though property prices have recovered, it is rare in Chichester for investors to buy, refurbish and flip properties like they used to in the former “property ladder” days.
Extra stamp duty to second home buyers and greater competition from first-time buyers benefitting from low interest rates has meant the margin to do this has largely dried up here in Chichester, where properties also don’t tend to fall into disrepair as often as in other less affluent areas.
Most professional landlords instead adopt a ‘buy and hold’ approach to property investment so as to benefit from the long-term capital growth houses have historically offered.
Recent sales data demonstrates how long-term investment in property can reap big rewards, as a three-bedroom house in Kensington Road recently sold for £350,000. This is 415 per cent higher than when it was bought for £68,000 in 1996, which is an annualised increase of 8.1%.
Even with such strong house price rises in recent years though, property isn’t always a one-way bet. An apartment was sold in Chichester in July this year for £149,950…some £81,000 less than when it sold for £230,950 in May 2009! In this example however, the apartment in question is in a retirement complex — a type of property that is notorious for being difficult to sell and generally offering a poor financial return.
If you’re looking at buying a property in Chichester and would like a free background check on its previous sale prices and how that compares to the wider market, please get in touch.