Aylesbury Property Values 10.4% higher than a year ago

 

Aylesbury property values rose by 0.6% last month, meaning they are 10.4% higher than 12 months ago. Expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the town, mortgage brokers and solicitors (all of whom have their finger on the pulse of the Aylesbury property market), the steady long term growth in Aylesbury property prices is not about to change. It is tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment. This means the steady upward momentum of the Aylesbury property market is likely to continue throughout the second half of 2015.

However, there are a couple points I wish to highlight as I like to give a balanced opinion of what is happening in the Aylesbury property market.  The two main points being low interest rates and a lack of supply of property.

Interest rates first - Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and could result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than seven out of 10 people (73% to be exact) in the Summer of 2012. Now I am not a mortgage broker and cannot give advice, but rates are only going in one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to obtain larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, the affect on home movers sentiment , given the shortage of supply, could result in a marked slowdown in the rate of house price growth. I am not suggesting prices will fall, just the rate of increase will slow.

Shortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Aylesbury is at an all time low. My sales colleagues are suffering from a lack of stock, increased price expectations as well as a downward pressure on fees…because of course selling houses is easy in this climate! One reason for this is the large number of buy to let landlords who have bought Aylesbury property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are fewer properties coming onto the market from first time sellers ... thus restricting supply and sales. In fact over the last four months, only 2,443 properties in the Buckinghamshire area have changed hands and sold, compared to 2,839 in the same time frame in 2014, a not insignificant drop of 13.95%. 

If you are planning on investing in the Aylesbury property market, or just want to know what to consider for a successful buy to let investment email any questions to me ian@mortimersaylesbury.co.uk or pop in to our office when you are next in town.