Tuesday, 19 June 2018

42% Drop in Properties For Sale Today in Aylesbury Compared to 10 Years Ago


There is good news for Aylesbury buy to let landlords as ‘top of the range’ well-presented properties are getting really decent rents compared to a year ago however, this rise in rents is thwarting many potential first time buyers from saving for both a deposit and money for a rainy day. On top of this, there is also a shortage of Aylesbury homes coming on the market thus adding fuel to the slowdown and affecting not just Aylesbury first time buyers but also those going up the housing ladder.

Whilst it is true that the Government’s initiatives, targeted at improving the supply of homes built and helping first time buyers obtaining necessary funding, are starting to work (albeit slowly), I also believe that to boost more existing home-owners and their properties onto the market, we as a Country, need to see a better focus placed on those looking to downsize (i.e. the mature generation).

If we took away some hurdles to home owners downsizing, such as removing stamp duty for those downsizers (as was done for first time buyers last year), together with encouraging even more first-time buyers with 100% mortgages to buy the smaller properties, this would in turn release more mid-range properties onto the market, which subsequently would encourage more mature homeowners to downsize from their bigger properties to buy those mid-range properties - thus completing the circle.

Looking at the most recent set of data from the Land Registry for Aylesbury (the HP20 postcode in particular), the figures show the indifferent nature of the current Aylesbury property market.

Only 136 Aylesbury (HP20) Homes changed hands in the last 6 months

Aylesbury property values and transactions continue to be sluggish, and the monthly peaks and troughs of house prices and properties changing hands doesn’t mask the deficiency of suitable realistically priced property coming onto the Aylesbury property market, meaning the housing market is slowly becoming inaccessible to some would-be home owners.

Looking at what each property type is selling for in HP20 (note the data from the Land Registry is always 4/5 months behind) makes interesting reading ….






We must remember these are the average prices paid, so it only takes a run of a few expensive or cheaper property types (as can be seen with the variance in the Apartments and Semi-Detached in the table) to affect the figures..

Looking at the numbers of properties for sale … I looked at my research for early Summer 2008, and at that time, 1,343 properties were on the market for sale in Aylesbury.. and when I did my research on this article today, just 781 properties for sale.. a drop of 42%.

The Government needs to seriously consider the supply and demand of the UK property market as a whole to ensure it doesn’t seize up. It needs to do that with bold and forward-thinking plans but, in the meantime, people still need a roof over their head, so as local authorities don’t have the cash to build new houses anymore, it’s the job of Aylesbury landlords to take up the slack. 

I must stress though, I have noticed a distinct ‘flight to quality’ by Aylesbury tenants, who are prepared to pay a little more for an exceptional home to rent.  If you want to know what tenants are looking for and what type of things you as an Aylesbury landlord need to do to maximise your rental returns – drop me a line.

Tuesday, 12 June 2018

Aylesbury Property Values 0.2% lower than year ago – What’s the PLAN to fix the Aylesbury Property Market?


It’s been nearly 18 months since Sajid Javid, the Tory Government’s Housing Minister published the White Paper “Fixing the Broken UK Housing Market”, meanwhile Aylesbury property values continue to drop at 0.2% (year on year for the council area) and the number of new homes being constructed locally bumps along at a snail’s pace, creating a potential perfect storm for those looking to buy and sell.

The White Paper is important for the UK and Aylesbury people, as it will ensure we have long-term stability and longevity in property market as whole. Aylesbury home-owners and Aylesbury landlords need to be aware of these issues in the report to ensure they don’t lose out and ensure the local housing market is fit for purpose. The White Paper wanted more homes to be built in the next couple of decades, so it might seem counter-intuitive for existing home-owners and landlords to encourage more homes to be built and a change in the direction of housing provision – as this would appear to have a negative effect on their own property.

Yet the country needs a diversified and fluid property market to allow the economy as whole to grow and flourish ... which in turn will be a greater influence on whether prices go up or down in the long term. I am sure every homeowner or landlord in Aylesbury doesn’t want another housing crisis like we had in 1974, 1988 and most recently in 2008.

Now, as Sajid Javid has moved on to the Home Secretary role, the 17th Housing Minister in 20 years (poisoned chalice or journeyman’s cabinet post) James Brokenshire has been given the task of making this White Paper come alive. The White Paper had a well-defined notion of what the issues were.

The first of the four points brought up was to give local authorities powers to speed up house building and ensure developers complete new homes on time. Secondly, statutory methods demanding local authorities and builders build at higher densities (i.e. more houses per hectare) where appropriate. The other two points were incentives for smaller builders to take a larger share of the new homes market and help for people renting.

However, lets go back to the two initial points of planning and density.

(1) Planning

For planning to work, we need a robust Planning Dept. Looking at data from the Local Government’s Association, in Aylesbury Vale, the council is below the regional average, only spending £26.88 per person for the Planning Authority, compared the regional average of £38.14 per head – which will mean the planning department will be hard pressed to meet those targets.





Also, 66% of planning applications are decided within the statutory 8-week initial period, below the regional average of 81% (see the graph below).  I am slightly disappointed with the numbers for our local authority when it comes to the planning and the budget allowed to this vital service.


(2) Density of Population


1.9 people live in every hectare (or 2.471 acres) in Aylesbury Vale

It won’t surprise you that 87,638 of 174,137 Aylesbury Vale residents live in the urban conurbations of the authority, giving a density of 14.6 people per hectare (again – much lower than I initially thought), whilst the villages have a density of 1.0 people per hectare.

I would agree with the Governments’ ambition to make more efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing needs, ensuring that the density and form of development reflect the character, accessibility and infrastructure.

It’s all very good building lots of houses – but we need the infrastructure to go with it.

Talking to a lot of Aylesbury people, their biggest fear of all this building is a lack of infrastructure for those extra houses (the extra roads, doctors surgeries, schools etc.). I know most Aylesbury homeowners and landlords want more houses to be built to house their family and friends ... but irrespective of the density ... it’s the infrastructure that goes with the housing that is just as important ... and this is where I think the White Paper failed to go as far as I feel it should have done.

Interesting times ahead I believe!



Monday, 4 June 2018

More Than Two Babies Born for Every New Home Built in the Past Five Years in Aylesbury Vale


More than 2 babies have been born for every new home that has been built in Aylesbury Vale since 2012, deepening the Aylesbury housing shortage.

This discovery is an important foundation for my concerns about the future of the Aylesbury property market - when you consider the battle that todays twenty and thirty somethings face in order to buy their first home and get on the Aylesbury property ladder. This is particularly ironic as these Aylesbury youngsters’ are being born in an age when the number of new babies born to new homes was far lower.

This will mean the babies being born now, who will become the next generation’s first-time buyers will come up against even bigger competition from a greater number of their peers unless we move to long term fixes to the housing market, instead of the short term fixes that successive Governments have done since the 1980’s.

Looking at the most up to date data for the area covered by Aylesbury Vale Council, the numbers of properties-built versus the number of babies born together with the corresponding ratio of the two metrics …





It can be seen that in 2016, 1.97 babies had been born in Aylesbury Vale for every home that had been built in the five years to the end of 2016 (the most up to date data). Interestingly, that ratio nationally was 2.9 babies to every home built in the ‘50s and 2.4 in the ‘70s. I have seen the unaudited 2017 statistics and the picture isn’t any better! (I will share those when they are released later in the year).

Our children, and their children, will be placed in an unprecedented and unbelievably difficult position when wanting to buy their first home unless decisive action is taken. You see it doesn’t help that with life expectancy growing year on year, this too is also placing excessive pressure on homes to live in availability, with normal population growth nationally (the number of babies born less the number of people passing away) accumulative by two people for every one home that was built since the start of this decade.

Owning a home is a measure many Brits to aspire to. The only long-term measure that will help is the building of more new homes on a scale not seen since the 50’s and 60’s, which means we would need to aim to at least double the number of homes we build annually.

In the meantime, what does this mean for Aylesbury landlords and homeowners? Well the demand for rental properties in Aylesbury in the short term will remain high and until the rate of building grows substantially, this means rents will remain strong and correspondingly, property values will remain robust.


Wednesday, 30 May 2018

How Affordable is Property for Aylesbury’s Average Working Families?


The simple fact is we are not building enough properties. If the supply of new properties is limited and demand continues to soar with heightened divorce rates, i.e. one household becoming two, people living longer and continued immigration, this means the values of those existing properties continues to remain high and out of reach for a lot of people, especially the blue collar working families of Aylesbury.

Looking at some recent statistics released by the Government, the ratio of the lower quartile house prices to lower quartile gross annual salaries in Aylesbury Vale District Council has hit 11.96 to 1.

What does that mean exactly and why does it matter to Aylesbury landlords and homeowners?
If we ordered every property in the Aylesbury Vale District Council area by the value of those properties, the average value of the lower quartile properties (i.e. lowest 25%) would be £250,000. If we then did the same, and ordered everyone’s salary in the same council area, the average of the lowest quartile (lowest 25%), the average salary of the lowest 25% is £20,901 pa, dividing one with the other, we get the ratio of 11.96 to 1.

Assuming there is one wage earner in the house, the chances of a Aylesbury working family being able to afford to buy their own home, when it’s just under twelve times their annual salary, is very slim indeed. The existing affordability crisis of people wanting to buy their own home is the unavoidable outcome of the decade on decade failure to build enough homes to keep up with demand. Nevertheless, improving affordability is not a case of just constructing more homes. 

Aylesbury Vale District Council needs to ensure more properties are not only built, but built in the right locations and of the right type and at the right price to ensure the needs of these lower income working families are met, because at the moment, they presently have few options apart from the private rental sector.

Looking at the historic nature of the ratio, it can clearly be seen in the graph below that this has been an issue since the early to mid 2000’s.



However, if we look at the historic data, those on the bottom rung of the ladder (those in the lower quartile of wage earners) used to be housed by the local authority instead of buying. However, the vast majority of council houses were sold off in the 1980’s, meaning there are much fewer council houses today to house this generation.

Many of the lower quartile working class families were given a lifeline to buy their own homes in middle 2000’s, with 100% mortgages, but the with the credit crunch in 2009, that rug (of 100% mortgages) was rudely pulled from under their feet. You see it is cheaper to buy than rent ... it’s the finding of the 5% deposit that is the challenging issue for these Aylesbury working class families. So unless the Government allow 100% mortgages back, the fact is, demand for rental properties will outstrip supply.

In the long term, to alleviate that, I would suggest the Aylesbury community hold their local politicians and Aylesbury Vale District Council to account for the actions they could take to ensure the affordability of housing and the extent to which they work with private developers and housing associations and aggressively use the planning tools at their disposal to safeguard the local community getting the new households we need. Aylesbury Vale District Council could make certain parcels of residential building land for private rented development only, eliminating the opportunity of the land being bought to develop large executive homes, which do not solve the current problem.

Yet in the short term, all this means is demand for rental properties will continue to grow, keeping Aylesbury house prices high and Aylesbury rents high.

Monday, 21 May 2018

754 Aylesbury Landlords Plan to Expand Their Buy To Let Portfolios


A noteworthy number of buy to let landlords in Britain plan to buy more properties over the next year notwithstanding the frustrations, challenges and seismic changes in the private rented sector. 

According to Aldermore, the specialist Buy To Let lender, their research shows around 41% of portfolio buy to let landlord’s objective is to grow their buy to let portfolio (i.e. Portfolio landlords are landlords that own more than one property).
So, I thought, “Are Aylesbury landlords feeling the same?” If so, if these numbers were applied to the Aylesbury private rental market, what sort effect would it have on the Aylesbury property market as whole?

Talking to the landlords I deal with, most are feeling quite optimistic about the future of the Aylesbury rental market and the prospect it presents notwithstanding the doom and gloom prophecies that the property market will shrink. Many of those Aylesbury landlords who are looking to enlarge their portfolio are doing so because they still see the Aylesbury rental market as a decent investment opportunity.

With top of the range Bank and Building Society Savings Accounts only reaching 1.5% a year, the rollercoaster ride of Crypto currency and the yo-yoing of the Stock Market, the simple fact is, with rental yields in Aylesbury far outstripping current savings rates, the short term prospect of a minor drop in property prices isn’t putting off Aylesbury landlords.

The art to buying a Aylesbury buy to let investment is to buy the profit on the purchase price, not the anticipation of the future sale price.

No matter what the historical economy has thrown at us, with the global meltdown in 2008/9, dotcom crash of 2000, ERM in 1992, the three day week, oil crisis and hyperinflation in the 1970’s (the list goes on) ... the housing market has always bounced back stronger in the long term. That’s the point ... long term. Investing in buy to let is a long-term strategy. The simple fact is, over the long term with the increasing demand for rental properties, predominantly among Millennials as many cannot afford to get on the property ladder, and with councils not building enough properties of any kind, many youngsters are having to resort the private rental market for their accommodation needs.

So, what of the numbers involved in Aylesbury?

There are 844 landlords that own just one buy to let (BTL) property in Aylesbury and 1,838 Aylesbury landlords, who are portfolio landlords (i.e. they own one or more buy to let properties). Between those 1,838 Aylesbury portfolio BTL landlords, they own a total of 3,858 Aylesbury BTL properties and they can be split down into the size of landlord portfolio in the graph below….




If I apply the Aldermore figures that means 754 Aylesbury landlords have plans to expand their BTL portfolio in the coming year or so.

However, the Aldermore Research also showed that 8% of private landlords intended to reduce the number of properties they own. They put this down to continuing Government intervention in the housing market (as many landlords mentioned too many limitations and higher taxation) while some believed that tenants are excessively protected to the disadvantage of the landlord.

I would say there is no repudiating that the buy to let market has taken a bit of a beating, thanks to a plethora of Government regulation, new mortgage underwriting rules in 2014 and George Osborne’s tax changes. Yet there still remains an overall consciousness of optimism among the vast majority of Aylesbury buy to let landlords. Despite these latest changes, many landlords still view buy to let as a good investment, as long as you buy right and expand your portfolio taking into account the second rule of buy to let … assess your position on the ‘buy to let seesaw’ of capital growth and yield.

If you want to buy right and assess your own portfolio on the yield/capital growth seesaw ... drop me a note. Whether you are landlord of mine or not as the case may be, advice is given freely, without obligation or cost.  

Thank you for reading this article. 

Monday, 14 May 2018

Extra Funding Is Required for Affordable Homes in Aylesbury


In my blog about the Aylesbury Property Market I mostly only talk about two of the three main sectors of the local property market, the ‘private rented sector’ and the ‘owner occupier sector’. However, as I often stress when talking to my clients, one cannot forget the third sector, that being the ‘social housing sector’ (or council housing as some people call it).

In previous articles, I have spoken at length about the crisis in supply of property in Aylesbury (i.e. not enough property is being built), but in this article I want to talk about the other crisis – that of affordability. It is not just about the pure number of houses being built but also the equilibrium of tenure (ownership vs rented) and therein, the affordability of housing, which needs to be considered carefully for an efficient and effectual housing market.

An efficient and effectual housing market is in everyone’s interests, including Aylesbury homeowners and Aylesbury landlords, so let me explain ..

An average of only 359 Affordable Homes per year have been built by Aylesbury Vale District Council in the last 9 years
The requirement for the provision of subsidised housing has been recognised since Victorian times. Even though private rents have not kept up with inflation since 2005 (meaning tenants are better off) it’s still a fact there are substantial numbers of low-income households in Aylesbury devoid of the money to allow them a decent standard of housing.
Usually, property in the social housing sector has had rents set at around half the going market rate and affordable shared home ownership has been the main source of new affordable housing yet, irrespective of the tenure, the local authority is simply not coming up with the numbers required. If the local authority isn’t building or finding these affordable homes, these Aylesbury tenants still need housing, and some tenants at the lower end of the market are falling foul of rogue landlords. Not good news for tenants and the vast majority of law abiding and decent Aylesbury landlords who are tarnished by the actions of those few rogue landlords, especially as I believe everyone has the right to a safe and decent home.
Be it Tory’s, Labour, SNP, Lib Dems, Greens etc, everyone needs to put party politics aside and start building enough homes and ensure that housing is affordable. Even though 2017 was one of the best years for new home building in the last decade (217,000 home built in 2017) overall new home building has been in decline for many years from the heady days of the early 1970s, when an average of 350,000 new homes were being built a year.  As you can see from the graph, we simply aren’t building enough ‘affordable’ homes in the area.



The blame cannot all be placed at the feet of the local authority as Council budgets nationally, according to Full-Fact, are 26% lower than they have been since 2010. 
So, what does this mean for Aylesbury homeowners? Well, an undersupply of affordable homes will artificially keep rents and property prices high. That might sound good in the short term, but a large proportion of my Aylesbury landlords find their children are also priced out of the housing market. Also, whilst your Aylesbury home might be slightly higher in value, due to this lack of supply of homes at the bottom end of the market, as most people move up the market when they do move, the one you want to buy will be priced even higher.
Problems at the lower end of the property market will affect the middle and upper parts. There is no getting away from the fact that the Aylesbury housing market is all interlinked .. it’s not called the Property ‘Ladder’ for nothing!

Tuesday, 8 May 2018

Aylesbury Property Market – Asking Prices Up 1.5% in the Last 12 Months


The average asking price of property in Aylesbury increased by 1.5% or £4,422 compared to a year ago, with particularly good demand from landlords and home-movers in the first few months of the year. This takes the current average asking price to £302,133, compared with £297,711 this time last year.

The rise in asking prices is being aggravated by buyers jumping into action looking to benefit from potential stamp duty savings (especially first-time buyers) or beat impending mortgage interest rate rises later in 2018. Of the numerous Aylesbury buyers starting their property hunting in the usually active spring market this year, many face paying even more than ever for the property of their dreams, although as I mentioned a few weeks ago, there are more properties for sale in Aylesbury compared to 12 months ago.

Looking at the different sectors of the Aylesbury property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts …




Interestingly, when one looks at the percentages, the most upward average asking price pressure is in the semi-detached property type sector.




Now, I must stress this growth in the asking prices of Aylesbury property doesn’t mean the value of Aylesbury property is going up by the same amount ... nothing could be further from the truth.  Only time will tell if the current levels of Aylesbury asking prices is a catch-up abnormality after a couple of months of restrained asking price rises in the first few months of 2018, or is it an initial sign that we are in for a better 2018 Aylesbury Property market than all of us were expecting at the start of the year? 

I believe these asking prices must be viewed with a pinch of salt, as it will be fascinating to see whether Aylesbury properties actually sell at these higher asking prices. Just because house sellers (be they owner-occupiers or landlords liquidating their assets) are asking for more money it doesn’t mean buyers will be enthusiastic to part with their hard earned cash. Like my Mum used to say to me years ago, “You can ask ... but you might not get”.

Also, Aylesbury homeowners and landlords wanting to sell their property need to be aware of progressively strained buyer mortgage affordability and the more those sellers increase asking prices, the more buyers will hit their maximum on the amount they are able borrow on a mortgage.

However, those Aylesbury buyers who need a mortgage (be they owner-occupier or landlord), will paradoxically benefit from lower mortgage payments before interest rates rise … maybe another reason for the uplift in the number first time buyers and landlords buying? Only time will tell!