Thursday, 29 October 2015

Aylesbury Property Market Crisis as New House Building drops by 10%

One of the key factors that determine the price of anything is the demand and supply of the item that is being bought and sold. When it comes to property, demand can change overnight, but it takes years to plan and ultimately build new properties, thus increasing the supply.

The Conservatives have pledged to build over 1 million homes by 2020. We have not built enough homes for decades, and if the gap between the number of households forming and the number of new homes being built continues to grow, we are in danger of not being able to house our children or grand children. It is past the time for another grand statement of ambition by another Housing Minister. Surely it is right to give normal Aylesbury families back the hope of a secure home, be that rented or owned? As a town, we need to exert pressure to ensure Westminster is held accountable, so we can have confidence there is a comprehensive plan, with enough investment, that can actually get these homes built.
To give you an idea of the sorts of numbers we are talking about, in the Aylesbury Vale District Council area in 2008, 670 properties were built and four years later in 2012, it peaked at 1100. By 2014, that figure had dropped by 10% to 990 properties built.
The outcome of too few homes being built in Aylesbury means the working people of the town are being priced out of buying their first home and renters are not getting the quality they deserve for their money. The local authority is not building estates like they were after the war and housing associations are having their budgets tightened year on year, meaning they have less money to spend on building new properties. I know of many Aylesbury youngsters, who are living with their parents for longer because they cannot afford to get onto the housing ladder and growing families are unable to buy the bigger homes they need.
I talk to many Aylesbury business people and they tell me they need a flexible and mobile workforce, but the high cost of moving home and lack of decent affordable housing are barriers to attracting and retaining employees. Furthermore, building new homes is a powerful source of growth, creating jobs across the county and supporting hundreds of Aylesbury businesses. It is true that landlords have taken up the mantle and over the last 15 years have bought a large number of properties. The Government need to be thankful to all those Aylesbury landlords, who own the 4,701 rental properties in the town. Most local landlords only have a handful of rented properties (to aid their retirement), and without them, I honestly don’t know who would house all the extra people in Aylesbury!
Moving forward, those Aylesbury landlords have many pitfalls, both in the short term and medium term. For instance the way income from rented property is taxed is likely to change soon, landlords now need to carry out Legionella Testing and the requirements for information that a landlord needs to supply a tenant have changed. All these changes cost time and money.  
The days of buying any property in Aylesbury and letting it out meaning you are set for life are gone.  There are more than ever a host of things to consider. It’s all about ensuring you stay the right side of the law, buy the right property (and that might mean even selling some to buy others), so you build the right portfolio for you as a landlord. Have a working knowledge of the tax implications in all you are doing is essential. If you are not using an agent to manage your property make sure you are able to stay up to date with legislation changes…if you are using an agent make sure they do!! One source of information on all of these issues, where you will find other articles on the Aylesbury property market, is the Aylesbury Property Blog
Or just pop in to my Temple Street office when you are next in town.
Nala helping me negotiate the Wendover Woods fitness trail.

Friday, 23 October 2015

Aylesbury home sellers desert the housing market.

Even though the housing market is in an upbeat state in many parts of the UK, getting on the property ladder is still challenging for many and regarded as unattainable by some.  However, that goal has become even worse recently in Aylesbury as the number of houses available to buy is at an 8 year all-time low.

Back in winter 2007, there were over 1,600 properties for sale in Aylesbury and since then this has steadily declined year on year, so now there are only around 350 for sale in the town.  This continuing diminishing supply of housing has been happening over those years for a while and there simply are not enough properties in Aylesbury to match demand.
A recent report by the National Association of Estate Agents said, “There are now 11 house hunters fighting after every available house which isn’t sustainable.   What that means is Aylesbury youngsters, who are looking to buy their first home, are finding themselves being squeezed out by the competition.  However, in the meantime, nobody wants to live with parents until they are in their 30’s, so that in turn creates demand for more rental properties. This means landlords have a greater demand for more rental properties and so are buying more. This is resulting in even fewer smaller properties for the youngsters to buy, it’s a vicious circle.   
Talking to fellow agents, mortgage arrangers, surveyors and solicitors in the town, all of whom have extensive dealings in the Aylesbury property market like myself, most of us agree the movement in the Aylesbury market is taking place in the middle to upper market, higher up the property ladder and it’s second and third steppers pushing through the properties that are being bought and sold.
That has meant as people tend to move less in the middle to upper market, the number of the properties actually selling has drastically reduced over the last couple of years.
When we look at the individual areas of the town, it paints an interesting picture.
  • HP 19 - Fairford Leys, Prebendal Farm, Quarrendon, Watermead 58 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Autumn  months of 2013, the number of properties selling in this postcode reached an average of 66  per month.
  • HP20 - Aylesbury Town Centre, Broughton, Elmhurst 17 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Spring months of 2014, the number of properties selling in this postcode reached into the late 20’s per month.
  • 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 Hill 34 properties sold in May 2015, whilst over the Summer months of 2014, the number of properties selling in this postcode was always in the late 50’s to early 60’s.
So what does this all mean for homeowners and landlords alike in Aylesbury?  Demand for Aylesbury property is strong, especially at the lower end of the market.  However, with fewer properties coming up for sale, it means property prices are proving very strong too.
But is that strength in prices supported by a high demand or by a lack of supply? I will leave you to debate this with those around you!!
A more stable, consistent Aylesbury property market that has a steady growth of property values  year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late 2000’s, might just be what the Aylesbury property market needs in the long term.
For more insights, comments and facts on the Aylesbury Property market please visit the Aylesbury Property Blog


Thursday, 15 October 2015

Could your Aylesbury property save you from Pension oblivion?

If you were born in the early 1970’s or late 1960’s, if you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year) and £231.90 a week for a couple (£12,118 a year) as long as your partner has paid their stamp (although there are certain get out of jail cards if they have not). 

As a household, could you live on just over £12k a year?
However, could the property you are living in in Aylesbury save you from a life of financial difficulty when you reach retirement? You see, a regular income is vital in retirement, and the bricks and mortar you own in Aylesbury could provide a way for you to finance life when you retire.
If you are in your 30’s, instead of saddling yourself with bigger and bigger mortgages, going from your first time buyer flat, to a terraced, to the semi and then the large detached house, you could instead keep your terraced or small semi, turning it into a buy to let property. Let the rent pay the mortgage and then rely on capital growth to provide you with a lump sum when you sell the property and retire.  One of the biggest plus points of buy to let is what is known as leverage. Let me explain ... say you have a deposit of 25% and the value of the property rises by 3% a year, your gains in fact multiply to 12%.  However, if property prices drop, 'leverage' can be catastrophic, as losses will also be multiplied. Property values have dropped a number of times in the last 50 years, but they always seem to bounce back ... property must be seen as a long term investment. Equally if prices did fall you would choose not to sell ( so would not make a loss ) and continue instead to benefit from the monthly gain made from rent.
Let me explain how leverage could work for you. If you had bought an Aylesbury house in Spring of 1983 for £75,000, using a 75% mortgage and 25% deposit, (meaning your deposit would be £18,750). Today, that Aylesbury property would have risen in value to £542,842, a rise of 623.8%. However, when you look at the growth on just your deposit, the rise is even better ... instead of 623.8%, we see a rise of 2795% (remembering that the mortgage would have been paid off).
However, buy to let is not all about capital growth and in retirement, income is more important than capital growth, as rent is the key to a steady income.
So surely the best strategy is to buy those Aylesbury properties with the high rents (when compared to the value of the property). These are called high yield properties in the buy to let world because the monthly return is so much greater. So surely they are the best in Aylesbury? Possibly, but the properties that offer these higher yields (in the order of 5% to 6% per year) tend to be in areas that are not particularly desirable to live in. Historically these areas have not offered such good capital growth when compared to the town average and have a higher tendency for void periods. 
Therefore, if a high maintenance rental portfolio wasn’t for you, another strategy could be buy a property with relatively smaller rental returns of 3% to 4% per year (i.e. lower yields), but in a more up desirable area. Properties such as these tend to suffer from fewer void periods (i.e. when there is no tenant in the property paying you rent) and they historically have had better long term capital growth when compared to the town average.
Every landlord is different and every property is different. All I suggest to you is do your homework. It is essential that you are buying property in areas that suit your needs, goals and desires. Talk to someone who knows the patch. This really is a key point…even as I am typing this I have broken off to speak to a local landlord who has been given advice by an agent who does not live locally and only recently has worked the Aylesbury market. Frankly the advice on achievable rents in certain locations he had been given were laughable!
As regular readers will know, I am happy to share my knowledge and experience of the Aylesbury property market, high yields, high capital growth, what to buy, what not to buy and where to buy. News and views on the Aylesbury Property market can always be found on the Aylesbury Property Blog or you can email
Nala had great fun on her first visit to the Wendover woods fitness trail this weekend

Friday, 9 October 2015

Aylesbury tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is the Aylesbury property. As a property agent I like to comment on the Aylesbury property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Aylesbury as more and more of their wages are being taken up by ever increasing rents.
The cost of renting a home in Aylesbury has nearly broken through the £750 a month barrier as the average rent for a property in the town, now stands at £749 per month, and whilst this was a drop of 0.6 % last month, rents for new lets are 7% higher than they were 12 months ago.
House price inflation has eased a little in Aylesbury from 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and the desire for good high quality rental properties continues to exceed the available rental stock.
I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increases in Aylesbury rents are a sign that the Aylesbury economy is picking up. 
This means Aylesbury landlords are continuing to benefit from the Aylesbury property market. The most recent Land Registry data suggests the annual property price rises in the town have eased over 2015, leaving property values 9.76% higher than 12 months ago. So as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.
You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates low and returns still very attractive, there has rarely been a better time to invest in rental properties.
However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the town, different types of properties are experiencing quite different changes.  For example, the average length of time on the market the 59 Aylesbury properties up for rent between £250 to £500 per month is 194 days, whilst the average length of time for the 108 properties at £500 to £1000 per month is 52 days and 22 properties that fall into the £1000 to £2000 per month price bracket is 47 days.
When you start comparing different parts of Aylesbury, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the Aylesbury Property Blog. In the Aylesbury Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.
Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Aylesbury Property Blog