Date Published 08 October 2018
The Worthing housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/09 and subsequent property market crash. There is currently some talk of a ‘property bubble' nationally as Brexit seems to be the ‘go-to' excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Worthing, the market has certainly changed for both buyers and sellers alike.
WORTHING HOUSE VALUES ARE 0.38% LOWER THAN A YEAR AGO, AND THE RENTS WORTHING TENANTS HAVE TO PAY ARE 1.5% HIGHER THAN A YEAR AGO
When we compare little old Worthing to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, because nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).
However, if we look further back...
SINCE 2006, WORTHING HOUSE VALUES ARE 58.72% HIGHER, YET THE RENTS
TENANTS IN WORTHING HAVE HAD TO PAY ARE 26.4% HIGHER
...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Worthing tenants are 15.6% better off in ‘real spending power terms'.
Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Worthing house values (in red) in the years of 2008 and 2009. However, as Worthing property values started to rise after the summer of 2009, see how Worthing rents dipped 6/12 months later (the yellow bars) - Fascinating!
So, we have a win for tenants and a win for the homeowners, because they are also happy due to the increase in the value of their Worthing property.
However, maybe an even more interesting point is for the long-term Worthing buy to let landlord. The performance of Worthing rental income vs Worthing house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).
Whilst it's true Worthing landlords have benefited from decent capital growth over the last decade, with the new tax rules for landlords, now more than ever it's so important to maximise your yields to ensure the long-term health of your buy to let portfolio. More and more I am sitting down with both landlords of mine, and of other agents (who might not be trained in these skills) to carry out an MOT style check on their portfolio to ensure their investment will meet their future needs of capital growth and income. If you don't want to miss out on an MOT check-up, drop me a line – what have you got to lose?
All the best