Wednesday, 25 November 2015

The Buy to Let market continues to grow!

The Council of Mortgage Lenders (CML) latest snapshot of the buy to let mortgage market shows us that buy to let landlords haven’t been put off by the Chancellors announcements on the way buy to let properties are taxed.

Last month, the CML stated £1.4 billion was borrowed by UK landlords to purchase 10,500 buy to let properties, up 26.5% from the same month in 2014, when only 8,300 properties were bought with a buy to let mortgage. Go back two years and the number of buy to let mortgages used for purchasing (again not re-mortgaging) is 36.4% higher! Even more interesting has been the fact that the average amount borrowed has risen as well. The average buy to let mortgage last month was £133,330, up from £128,480 a year ago.

In Aylesbury, I am speaking to more and more landlords, be they seasoned professional landlords or first time landlords, as they read reports that the Aylesbury rental market is doing well, with rents and property values rising.  Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).

However, the first thing you have to decide is whether you want great capital growth or great rental yield, as every landlord knows, you cannot have both. Over the last twenty years, property values in Aylesbury have risen by 256.69%, compared to Greater London’s 436.2%. This has proved that capital growth increases faster in the more expensive Capital, but your investment money does not go very far, meaning there will not be as much rental yield from a one bed flat in Chelsea (2% per year at best) as there would be with a two bed semi in Aylesbury. However, whilst the figure of 256.69% is an average for the area, certain areas of Aylesbury have seen capital growth much higher than that and others areas not so well (we have talked about those in previous articles).

Clearly there are still many landlords coming into the market, regardless of potential tax changes in the future. There are various ways in which you can mitigate the potential tax changes and I would be happy to discuss some of these if you have any questions.

In the meantime if you are looking to buy, I will keep you in touch via this blog with the changes to the Aylesbury market place. As always consider very carefully your objective and whether or not the property and location you are buying meets the criteria needed to achieve your goals.

If you would like to discuss your investment plans or a proposed purchase, please don’t hesitate to get in touch. Pop into my office in Temple Street or email me at

You can find similar articles and information at

Friday, 20 November 2015

Aylesbury Buy To let –Freehold House or Leasehold Flat?

I wish to answer a question emailed into me from a potential Aylesbury landlord last week. Nice chap ... lives in Broughton, and it turns out, after having a coffee with him, he works in IT, has some available capital (now the kids have flown the nest) and wants to buy his first buy to let property.

His main question was ... Do I buy a freehold house or a leasehold flat in Aylesbury?
This is the most frequently asked question from those landlords and potential landlords I talk to. Most people will say freehold every time, because you own the land. However, it is not as simple as that. The definitive answer though is to research what Aylesbury tenants want in the area of Aylesbury they want to live in! The tenant is ultimately your customer, if they don't want to rent what you decide is best to buy, then you are not going to have a successful Buy to Let investment. So start with the tenant in mind and work backwards from there, you won’t go far wrong. In short, find the demand before you think about creating the supply.

Leasehold flats and apartments in Aylesbury are excellent in some respects as they offer the landlord certain advantages, including the fact a flat will generally be less expensive to buy. Yields can be good, offering sensible cash flow. The building will already be insured and yes there is a service charge, but it is for a service at the end of the day and that cost is spread between many others (i.e. when your freehold house roof goes, its falls 100% on your shoulders) and one of my favourites - there is often no garden to maintain or blown down fences to replace!

However, some Aylesbury leasehold flats can suffer from poor capital growth particularly if they are affected by any of the below mentioned points; Some leasehold properties, in particular the more modern developments will have higher levels of service charges while they are building up a ‘sinking fund’. The length of the lease will significantly affect value if not renewed before it gets too short. Thankfully there are not many, but some Aylesbury apartments have burdensome clauses. Finally, with leases, there can be sub-letting issues – which means you can’t let them out. You need to research your potential purchase thoroughly!
So what do the numbers look like? Since 2003, the average freehold property in Aylesbury (detached, semis and terraced) has risen from £180,346 to £297,342 in value, a rise of 65% whilst the average Aylesbury leasehold property (flats and apartments) has gone up in value from £91,735 to £148,044, a similar rise of 61%. 

It may be interesting to note that of the 8,096 rental properties in the Aylesbury District Council area that the Office of National Statistics state that 32.9% (2,662) of all rental properties are apartments. However, there are only 8,098 apartments in the whole council area (be they owned, council rented or privately rented), which represents 11.7% of the whole housing stock in the area. There is a high proportion of Aylesbury’s leasehold apartments rented to tenants compared to freehold detached, semi’s or terraced.  
My advice to any prospective landlord as it is to you is to do your homework.  I am pleased to say that the potential landlord from Broughton has now agreed a purchase for a freehold property and is very happy with the advice and support he has received. If you would like to discuss your investment plans or a proposed purchase, please don’t hesitate to get in touch. Pop into my office in Temple Street or email me at

You can find similar articles and information at

Thursday, 12 November 2015

Aylesbury Tenants Pay 34.6% of their Salary in rent

I had an interesting chat with a local Aylesbury landlord yesterday about my thoughts on the Aylesbury property market. The subject of the affordability of renting in Aylesbury came up in conversation (there’s a surprise) and how that would affect tenant demand. Everyone wants a roof over their head, and since the 1940s, owning your own home has been an aspiration of many of us.  However, with rents at record highs, many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first time buyers deposit.
I thought I would do some research into the Aylesbury property market and share with you my findings.  Aylesbury tenants spend on average just over a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Aylesbury is £763 per month.  When the average annual salary of an Aylesbury worker stands at £26,466 per year, that means the average Aylesbury tenant is paying 34.6% of their salary in rent.  I doubt there is much left to save for a deposit towards a house after that, and that my Aylesbury Property Blog reading friends is such a shame for the youngsters of Aylesbury.
You see one of the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a lack of new properties being built   It’s the classic demand vs supply scenario, where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also, Aylesbury people aren’t moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, a few weeks ago I said 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 354 for sale in the town.
So, the planners in Aylesbury haven’t allowed enough properties to be built in the town and existing Aylesbury homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Aylesbury to match demand. These are the reasons houses prices in Aylesbury have remained quite buoyant, even though economically, over the last 5 years, it was one of the worst on record for the country and the South East region as a whole.
However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey  (their Generation Rent 2015 Survey) suggested  more and more people may be long term, if not lifelong tenants. In fact there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45.  It seems from this survey that the state of the UK economy has shifted priorities quite significantly in quite a short space of time.  With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people are seeking rental properties.
 It is often said that more people in central Europe rent for longer or never own their own property. The last two census in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and, as a country, we are becoming more and more like Germany.   That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays, often quoted,  is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that, they have a higher personal income than in the UK.
Therefore, if we are turning into a more European model and the youngsters of Aylesbury and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Aylesbury tenants as wages will start to rise and good news for Aylesbury landlords, especially as property values in Aylesbury are now 8.8% higher than a year ago!
To discuss this or any other article in my blog please email,uk or pop in to my Temple Street office when you are passing.

Saturday, 7 November 2015

How EU Migration has changed the Aylesbury Property market

The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years. In this article I talk about what it has done for the Aylesbury Property market.

Before we look at Aylesbury though, let us look at some interesting figures for the country as a whole. Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home. It might surprise people that only 5.07% of EU migrants managed to secure a council house. However, 676,091 (69.62%) of them went into the private rental sector.  This increase in population from the EU has, no doubt, added great stress to the UK housing market.
Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that is affected the most.  Indeed, I have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants. In 2001, 3.68 million rented a property from a landlord in the UK.  Ten years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a landlord, there were actually an additional 4.14 million people who became tenants and were not EU migrants, but predominately British!
As a landlord, it is really important to gauge the potential demand for your rental property, especially if you are a landlord who buys property in areas popular with Eastern European EU migrants.  To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number (which EU members are able to obtain).
In Aylesbury Vale, migration has risen over the last few years. For example, in 2007 there were 1,237 migrant national Insurance cards (NIC) issued and the year after in 2008, 1,094 NIC cards were issued. However, in 2014, this increased slightly to 1,423 NIC’s. However, if the pattern of other migrations since WW2 continues, over time there will be an increasing demand for owner occupied property, which may affect the market in certain areas of high migrant concentration. On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.
In essence, migration has affected the Aylesbury property market; it couldn’t fail to because of the additional 9,353 working age migrants that have moved into the Aylesbury area since 2005. However, it has not been the main influence on the market. Property values in Aylesbury today are 34.49% higher than they were in 2005. According to the Office of National Statistics, rents for tenants in the South East have only grown on average by 0.95% a year since 2005 .... I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the Aylesbury property market. This was backed up by the then Home Secretary Theresa May back in 2012 - more than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20 year period. 
If you want to know more about the Aylesbury property market, then for more articles like this, please visit the Aylesbury Property Blog or pop in to my Temple Street office when you are passing.