Tuesday, 29 September 2015

Another great Fairford Leys investment just available.

This modern two bedroom Denbigh style property is situated in a quiet location on the outskirts of the popular Fairford Leys development.  On the ground floor the entrance hall leads to a modern kitchen and good sized lounge/dining room with a patio door leading into the garden.  Upstairs there are two  bedrooms and a refitted bathroom.  Outside the property benefits from an enclosed  garden and there is allocated parking situated to the rear.  All-in-all this property would make an ideal  buy-to-let investment.

Sandhill Way Fairford Leys HP19 8GU

Just turn up on the day, no appointment needed
For full details see Rightmove via this link...http://www.rightmove.co.uk/property-for-sale/property-51744211.html

This is a great buy to let and should rent readily around £850/£875 giving a gross yield of 4.6% to 4.7% along with great potential capital growth.

If you need more facts and figures just give me a call 01296 398555 or email ian@mortimersaylesbury.co.uk 

Aylesbury Property Market - Asking Prices Drop but Values rise

Those of you who regularly read my articles in the Aylesbury Property Blog will know I like to keep abreast of the Aylesbury property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.

 What is going on? Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the town have dropped, yet property values have increased.  The average asking price of an Aylesbury property, according to Rightmove, fell 1.2% this month yet the average value of an Aylesbury property rose by 1.1%.
So how does this relate in monetary terms?  This anomaly has driven the average asking price of an Aylesbury property down slightly to £265,300 whilst the average value is now £330,500.
So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without sufficient research or rely on inflated valuations. This can result in overpriced properties that don't sell. As the summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property.
On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, Aylesbury property values are continuing to rise and those homeowners in Aylesbury who have had properties on the market for a while reduced their asking prices ... great news for property owners and buyers alike.
In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Aylesbury home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate. Nobody wanting to sell means nobody putting their property on the market with a view to buying.
Most homeowners don’t want to sell without some idea of what they are going to buy.
But that’s the beauty of the much maligned English and Welsh house buying process. You can find a purchaser for your property, then ask them to wait. By agreeing a sale (subject to contract) before you try to buy sounds concerning to many, but with fewer properties for sale you need to have a buyer for your property or you will be treated as a less serious buyer yourself. If you cannot find the right home for you, you can slow the pace with your purchaser until it comes along. If nothing suitable does comes along and you lose your buyer then the worst outcome is that you have to find another purchaser or take your property off the market and stay put for now. As long as you mention this at the start they can choose not to commit to any costs until you have agreed your onward purchase.
However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 130 flats for sale, 96 terraced houses and over 59 semis for sale in Aylesbury.  Landlord/Buy to let investors can normally pick up some bargains in the autumn months, as sellers who are selling their homes often have a pressing need and desire to sell before the year end fast approaches.
The types of houses an Aylesbury landlord typically buys, are not the same types as the homeowners wanting to move to a posher area of the town as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones).
If you are a landlord or thinking of becoming one for the first time and want to keep in touch with what is going on in the Aylesbury marketplace sign up for regular posts from http://theaylesburypropertyblog.blogspot.co.uk/ or drop in and see me at 5 Temple Street Aylesbury. ian@mortimersaylesbury.co.uk

Nala was off for a snooze, howling at the moon all night had not been a good idea.

Aylesbury’s £1.7 billion Mortgage Powder Keg

Eight years ago, in the summer of 2007, hardly anyone had heard of the term ‘credit crunch’, but now the expression has entered our daily language and even the Oxford Dictionary.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Aylesbury Property market, but in November / December 2007, and for the following seventeen months, Aylesbury property values dropped each and every month like the proverbial stone. The Bank of England soon realised in the late summer of 2008 that the British economy was stalling under the continued pressure of the Credit Crunch. Therefore, between October 2008 and March 2009, interest rates dropped six times in six months from 5% to 0.5% to try and stimulate the British economy. 

Thankfully, after a period of stagnation, the Aylesbury property market started to recover slowly in 2010, but really took off strongly in late 2013 / early 2014 as property prices started to rocket. However, the heat was taken out of the market in late 2014/early 2015, with the new mortgage lending rules and some uncertainty, when some people had a dose of pre–election nerves.  
With the Conservatives having been re-elected in May, the Aylesbury property market regained its composure and in fact, there has been some ferocious competition among mortgage lenders, which has driven mortgage rates to record lows. Whilst I have no actual figures to back this up, I know an awful lot of long serving bank managers, mortgage arrangers and people in the finance industry, all of whom have told me on previous occasions when interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise that was the catalyst for many homeowners and landlords to remortgage but the second or third increase.  The reason being that it was only by the time of the third rate rise that it started to hit the wallet.  However by the time of the second or third rate rise the best fixed rates, were in all instances, no longer available as they had been pulled by the banks months before.
But here is the good news for Aylesbury homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  I read that the well respected UK financial website Moneyfacts said only a couple of weeks ago, the average two year fixed rate mortgage has fallen from 3.6% twelve months ago to just under 2.8%.

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK.  So what about Aylesbury?  In Aylesbury, if you added up everyone’s mortgage, it would total £1.7 billion.  Even more interesting is when we look at Aylesbury and split it down into the individual areas of the town,
  • HP17  -  Aston Sandford, Bishopstone, Butler's Cross, Dinton, Dorton, Ellesborough, Ford, The Kimbles, Kingsey, Haddenham, Meadle, Nash Lee, Stone, Upton, Westlington £254.7m
  • HP18 - Ashendon, Boarstall, Brill, Chearsley, Chilton, Cuddington, Dorton, Easington, Edgcott, Grendon Underwood, Ickford, Kingswood, Long Crendon, Lower Winchendon, Ludgershall, Oakley, Shabbington, Upper Winchendon, Waddesdon, Westcott, Worminghall, Wotton Underwood £401.7m
  • HP 19 - Fairford Leys, Prebendal Farm, Quarrendon, Watermead £456.3m
  • HP20 - Aylesbury Town Centre, Broughton, Elmhurst £205.7m
  • HP21 - Bedgrove, Elm Farm, Queens Park, Southcourt, Walton, Walton Court £540.6m
  • HP22  - Aston Abbotts, Aston Clinton, Bierton, Buckland, Drayton Beauchamp, Dunsmore, Halton, Hardwick, Hulcott, North Lee, Nup End, Oving, Pitchcott, Quainton, Rowsham, Stoke Mandeville, Weedon, Wendover, Weston Turville, Whitchurch, Wingrave £585.4m
Since 1971, the average interest rate has been 7.93%, making the current 0.5% very low.  So, if interest rates were to rise by only 2%, according to my research, the 6,793 Aylesbury homeowners, who have a variable rate mortgage will on average have to pay an additional £238 a month in interest payments.
I know over the last couple of posts, I have talked about mortgages a lot however, I am not a mortgage arranger but a letting agent and as regular readers know, I always talk about what I consider to be the most important issues when it comes to the Aylesbury Property market and at the moment, in my humble opinion, this is the most important thing!

Buy to let is all about maximising your investment, increasing income and reducing costs.  I give advice, opinions, thoughts, concerns, worries, expectations and fears about the Aylesbury Property market in my blog on the Aylesbury Property Blog.  If you are interested in the Aylesbury Property Market you could do worse than read my Blog to keep informed of market trends. http://theaylesburypropertyblog.blogspot.co.uk/ Or you could drop in and see me when you are next passing 5 Temple Street Aylesbury

Friday, 18 September 2015

Interest rates set to rise? – How will that affect the Aylesbury property market?

A couple of weeks ago, I mentioned in this blog about how the Bank of England has been indicating recently that UK interest rates will be going up in the not too distant future. Therefore, if you are one of the 11,918 homeowners in Aylesbury, who own your own home with a mortgage, then you need to consider your options and start to budget for an interest rate rise. However, if you are a landlord, who owns one of the 4,291 rental properties in the town, whilst your exposure to interest rate rises is lower, it is most certainly something you should be aware of.

Since the spring of 2009, British interest rates have been at a record low of 0.5%. It’s not a case of if, but when, they will rise. Some people think it will be before Christmas, although I am of the opinion, it will be early in the New Year around Easter time, when they do rise. The Americans have just held their rates despite it being widely forecast that they would put an increase in place. I also expect any rises will be slow, steady and limited. It depends on what happens to UK wage rises, UK inflation and the general state of the British economy. Nevertheless, as much as most of us in Aylesbury would love to pull the shutters down and ignore the rest of the world, we have to recognise we are part of a global economy and global economic worries still exist to prevent an abrupt and instantaneous rate rise.

Nala has no intention of worrying about interest rates any time soon.
Those Aylesbury landlords, who do have a mortgage, need to realise that as interest rates rise, their monthly mortgage costs rise. It’s easy to say you will look at your mortgage next month, then before you know it, Christmas will be here!  Don’t forget, mortgage lenders have always removed the juicy low rate mortgage deals a few months before interest rate rise. Speak to a qualified mortgage broker, there are lots of them in Aylesbury, and seriously consider fixing your mortgage rate now.  You didn’t buy your Aylesbury buy to let property for it to become a millstone around your neck. It’s all about mitigating your costs and maximising your income to make your Aylesbury buy to let property the investment you want it to be.

However, on the other side of the coin, two in three landlords who have bought property since 2007, have done so without a mortgage. A rise in interest rates might be a good thing. Let me give you some background first, then I’ll explain why. Aylesbury landlords have seen their return on investment for their Aylesbury buy to let property, over the last couple of years, perform very well indeed with Aylesbury property values rising by 36.58% since the Spring of 2009. However, when rates do rise, whilst more expensive mortgage rates will ease the demand for borrowing, on the other hand, it may temper house price growth, making the property market more competitive... and therefore, we should see the return of some bargain property buys in Aylesbury!

Finally though, can I ask that all Aylesbury homeowners and landlords, who have a mortgage that isn’t fixed seriously consider securing a fixed rate now. Recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels.  I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage broker and, if appropriate, fix your mortgage before interest rates rise.

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.

Friday, 11 September 2015

Crisis in the Aylesbury Property Market ?

I don’t know about you, but if you watch Sky News every waking hour or read the newspapers, it always seems we as a Country, Europe or the World seem to lurch from one crisis to another. Another week, another crisis averted. It was only last summer the soothsayers were predicting the end of the world over the supposed house price bubble that many believed was developing in the South. Property prices were rising at 20%+ per annum in London, only for things to ease as the property market in the Capital showed a controlled slowdown and cooling in activity with price growth easing to a more realistic 8% to 9% per annum. Interestingly, there was no panic when some modest price drops were seen in some of London’s highest priced suburbs.

However, this month’s crisis is the buy to let boom and as George Osborne always likes to be topical, in the July emergency budget, he declared that he will start to scale back, from 2017, the tax relief that those high income tax rate landlords with a mortgage have benefited from. The Daily Mail ran headlines stating it was the end of the private landlord; predicting many landlords will give up on buy to let altogether and we will be inundated with rental properties up for sale as landlords feel squeezed from the market.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy to let property market could destabilise the whole UK property market. He was concerned landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

End of the world then? This week, yes probably, but next week ... that’s another story!  Before we all go and live like a hermit in the Scottish highlands, let me explain to you my perspective on the whole subject. As I mentioned a few weeks ago, two thirds of buy to let properties bought in the last eight years have been bought mortgage free – so they won’t be affected by the Chancellors’ tax changes.  Also, something I feel is often overlooked but very important, is the fact that landlords historically have only been able to normally borrow up to 75% of the value of the rental property.  In the last property crash of 2008, property values dropped by the not so insignificant figure of 17.61% in Aylesbury, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no landlord would have been in negative equity in Aylesbury.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy to let, and the property market as a whole, will carry on relatively intact. It’s true reducing tax relief will hit landlords who pay the higher rate of income tax and this may slightly diminish buy to let as an investment vehicle, but I doubt people will sell. Many landlords have been lazy with their investments, buying with their heart, not their head. You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Aylesbury property market as a buy to let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Aylesbury buy to let market still offers good investment opportunities to new and old alike. Those who have bought in the last twelve to eighteen months have reaped the benefit from buying in Aylesbury, because the town offered a combination of reasonable house prices with subsequently increasing rents.  Property values have risen by 13.74% in the last eighteen months in Aylesbury, whilst looking at rents, in Q2 2015, average rental values for new tenancies were 11% higher than Q2 2014, which is particularly interesting as they only rose by 4.5% between Q2 2013 and Q2 2014.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Aylesbury Property Blog where I have similar articles to this about the Aylesbury property market. If you haven’t visited and you are interested in the local property market in Aylesbury ... you are missing out! Or you could just stroll in to my office in Temple Street when you are passing.
Nala doesn't much care for a crisis

Friday, 4 September 2015

My concerns about the Aylesbury Property market

I am  concerned about the Aylesbury property market, but in a way that might surprise you.  Rightmove announced that average ‘asking prices’ fell slightly in July by 0.4% in the South East, leaving them 5.8% higher than a year ago.  Whilst it could be said that monthly change is very modest, in the same period a year ago, we saw a monthly fall of 0.6% in the South East, which is more the norm given the onset of  schools breaking up and everyone going on holiday.
Looking at all the data on the Aylesbury property market; putting aside the need for more houses to be built in the next decade to balance out the increase in population (helped in part by inward European migration) but not matched by a similar increase in housing being built. My research shows there is a widening gap between what property buyers want and what is available to buy.  In a nutshell, many more buyers are looking for the smaller one and two bed properties (the typical terraced and smaller semi-detached houses/apartments), whilst there are a larger proportion of the four and five properties, which are the typical detached properties available.
Demand for smaller properties comes from both first time buyers and the growing number of buy to let landlords, for whom it is more cost effective and efficient to buy smaller properties to let out compared to larger properties which tend to offer poorer returns.  Also, landlords with larger loans (on those larger more expensive properties) will also be hit harder with the changes in the way tax is paid on buy to let investments, which starts in 2017.
If you recall, a few weeks ago I did some research on how different types of properties had performed in Aylesbury since the year 2000.  I revisited those calculations and it hit me how different types of properties had performed over the last 15 years. This mismatch of demand and supply isn’t a new phenomenon, it’s been happening under our noses for years. 
In the last 15 years, the average terraced house in Aylesbury has risen in value from £86,303 to £218,941 whilst the detached house has risen in value from £185,751 to £337,438.  Nothing seems amiss until you look at the percentage growth.  The terraced has grown in value by 154% whilst the detached by only 82% meaning the gap between the inexpensive terrace’s and expensive detached properties has in percentage terms narrowed enormously (this isn’t just an Aylesbury thing, it has happened all across the Country).

More houses need to be built, not only in Aylesbury, but in the South East and the UK as a whole.  In particular, there is specific need for more affordable starter homes for the growing demand from both tenants (and the landlords that will buy them) and first time buyers.  The Tories need to face up to the fact that unless they can get the builders, the planners (to release more building land), the banks (to finance it) and themselves together, to ensure long term plans can be made, and implemented, this issue will continue to worsen.

The country needs 200,000 houses a year to be built to keep up with demand, let alone reverse the imbalance between demand and supply.  Last year, only 141,040 properties were built, the year before 135,510 and 146,850 in the year before that.  This means only one thing for Aylesbury landlords.  Unless David Cameron starts to rip up huge swathes of the British countryside and build on acres and acres of green belt, demand will always exceed supply when it comes to property for the foreseeable future.

Therefore, investment in the local Aylesbury property market could be the best move to make. Stock market investments have their place for the well informed but have been akin to a white knuckle ride at a theme park in recent weeks.  Everyone is different and trust me, there are many pitfalls in buy to let. But buy to let still ,despite recent selling price growth, offers long term capital growth with a sensible yield (around 4/5 % locally) while you wait!  You must of course take lots of advice and seek out the best opinion.  One source of opinion, specific to the Aylesbury property market is the Aylesbury Property Blog  http://theaylesburypropertyblog.blogspot.co.uk/