Tuesday, 12 January 2016

What does 2016 have in store for the Aylesbury Property Market?

Aylesbury house prices up or Aylesbury house prices up a lot? ... and by how much? Those of you who read the Aylesbury Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 19,022 Aylesbury homeowners and landlords.

The average Aylesbury property is 8.1% higher today than it was a year ago, but when you consider inflation is currently running at -0.1% (i.e. consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers. Property affordability continues to decrease (although I read in The Times that wage inflation (i.e. salary growth) is showing signs of weakening). I think highly paid high ranking civil servants and bankers are doing their level best to increase this average.
Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook for UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Aylesbury landlords in my blog, but I believe the real issue in the Aylesbury property market is the shortage of property to buy. People either worry there will be no suitable house to move to, or at least not one they can afford to upgrade to. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is ... good luck George hitting those numbers!
Why? Because houses take years to build ... not months ... so George and his fabled house building aside, where does that leave us in Aylesbury in 2016?
Well, talking of supply ... whilst Mr Osborne builds his properties (a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in July 2011, 1,006 properties were for sale in Aylesbury ... today that figure is 235. On the face of it, this means there is considerably less choice for Aylesbury buyers – but it also means a restricted supply of properties for sale and it keeps property prices high for Aylesbury house sellers.
Back in July 2011, the average property in Aylesbury took 92 days to find a buyer ... latest figures state this has dropped to 53 days, a drop of 43% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Aylesbury is the 3 bed, which only takes 45 days to find a buyer (on average) compared to the 4 bed, which takes 94 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!
However it is worth noting that these are average timescales and in our recent experience much of what is selling is doing so in just a few days…and often in excess of the original asking price.
What about all the tax regime and Stamp Duty changes? Well it seems to me that there is no agreement on the impact this will have on the market, ask ten pundits their opinion and guess what you get ten different opinions. Some will buy/sell now some will wait and see what happens…net result?...no impact.
So, back to the question everyone is asking...What will happen to property values in Aylesbury in 2016?  I suggest they will rise between 6.5% and 7.5% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! The property market pricing will be driven by a lack of supply rather than an increase in demand. The demand has remained fairly constant relative to supply over the last few years it is the lack of supply that has driven prices upward.
A pensive Nala before walking.
For more thoughts, opinions and views on the Aylesbury property market ... visit the Aylesbury Property Blog  http://theaylesburypropertyblog.blogspot.co.uk/  Or pop in and see me when you are passing our Temple Street office.