Date Published 21 August 2018
WORTHING PROPERTY MARKET
HOW DOES IT COMPARE HISTORICALLY TO THE SOUTH EAST AND NATIONAL PROPERTY MARKETS?
Living in our own homes or owning buy to let property in Worthing and the surrounding areas, it's often easy to ignore the regional and national picture when it comes to property. As a homeowner or landlord in Worthing, consideration must be given to these markets because directly and indirectly, they do have a bearing on us in Worthing.
Locally, the value of property in Worthing and the number of people moving remain largely steady overall, although looking across the country there are certainly regional variations. Talking to fellow property professionals in the posh upmarket central London areas of Mayfair and Kensington, the number of people looking to buy and registering interest with agents is continuing to climb after 18 months in the doldrums, whilst in other parts of the UK there is restraint amongst both buyers and sellers. So looking at the numbers in greater detail, let's see what type of new homes people have been buying in the Worthing area.
The things that affect the national property market are the big economic numbers. Nationally, over the last few months, thankfully, the economic forecast and predictions have improved, notwithstanding the Brexit uncertainties. Inflation has mercifully throttled back its high growth seen in 2016 to the current level of 2.1% (from 2.7% average last year), coupled with marginally stronger wage growth at 2.5%. Unemployment is at a 42-year low at 4.2% and UK consumer spending power rose to an all-time high last month to £331.04bn – all positives for consumer sentiment.
Look further afield, a resilient property market depends on the UKs economic health with the outside world, so if Sterling weakens imports become more expensive, meaning inflation increases, which is something I talked about a few weeks ago. Earlier this month, to bring inflation under control, The Bank of England chose to raise interest rates for only the second time in a decade which could seriously affect the property market. On the assumption Brexit negotiations are successful, economic growth should continue to be upward and positive, meaning confidence would increase, which is the vital element to a good housing market.
Looking closer to home now, Worthing landlords and Worthing homeowners might be interested in the how the regional and Worthing markets have performed over the last 20 years (compared to the National picture). Let's look at the regional picture first,
WORTHING HAS OUTPERFORMED THE SOUTH EAST HOUSING MARKET BY 12.38%, WHILST NATIONALLY, WORTHING HAS OUTPERFORMED THE COUNTRY BY 31.9%
That means a Worthing homeowner has profited by an additional £102,559 over the last 20 years compared to the average homeowners across the country.
I found it interesting to see the ups and downs of the Worthing, South East and National markets in this graph. The correlation between the three markets is fascinating - Worthing follows the regional trend more closely than the national trend (as one would expect), however the 2007/08 property crash timings and effects were slightly different, as were how the markets performed in the post-crash years of 2011 to 2014.
So, what does this all mean for Worthing homeowners and Worthing landlords?
Well, house prices going up or down are only an issue when you buy or sell. In the last 12 months, only 1,076,288 (let's call it's a straight million between friends!) properties changed hands out of 27.2 million households in the UK in 2017, meaning only 3.7% would have been affected if property values had dropped in the last year.
PROPERTY VALUES IN WORTHING ARE 351.85% HIGHER THAN THE SUMMER OF 1998
This has been a long-term gain. The number one lesson in property is that it is a long-term game. The biggest issue in property isn't house values or prices ... it's the number of homes built, because the number of households nationally has only increased by 6% since 2007, whilst the population has grown by 7.6%. That doesn't sound a lot, until you express it another way…
IF THE UK POPULATION HAD HAD ONLY GROWN BY THE SAME PERCENTAGE AS THE PERCENTAGE GROWTH IN UK HOUSEHOLDS IN THE LAST DECADE, THERE WOULD BE 1,000,000 LESS PEOPLE LIVING IN THE UK TODAY
The final thought for this article is this, apart from central London, over the last 20 years it hasn't mattered what part of the UK you were in with regards to the property market. Be you a landlord or homeowner, property is a long game, so look long term and you will win because until they start to build more homes, from the current levels of 180,000 new homes built per year to at least 250,000 households built per year, demand will, over the long term, outstrip supply for owning and renting!
All the best