Friday, 13 May 2016

£7,300 boost to Aylesbury First time buyers

There is a whole legion of wannabe Aylesbury first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Aylesbury landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Aylesbury buy to let landlords has dropped away it offers Aylesbury first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker. 

Looking at the average value of a terraced house in Aylesbury currently standing at £244,900, that means if our Aylesbury FTB went up against an Aylesbury landlord, the landlord would have to pay an additional £7,347 in stamp duty. Early evidence from fellow property professionals in the town is suggesting landlords are being a bit more selective with Aylesbury properties reflecting the extra stamp duty costs.    

Since 2011/12, the Aylesbury property market has performed very well indeed. Over the last 12 months, £716,981,760 has been spent buying 2,376 Aylesbury properties.  Figures from the Land Registry have just been released and month on month in our council area, property values are 0.8% higher, yet 11.4% higher year on year. These figures are nowhere near the heady days of 2000 (August to be exact), when Aylesbury property prices rose by 22.2% in 12 months.

So as property values in Aylesbury (and the UK as whole) start to stablise and come back to some kind of balance, I am beginning to see informed landlords view the Aylesbury property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the Aylesbury Property Market Blog  take advice on what or not to buy and what to pay, meaning Aylesbury landlords are being more calculated with their Aylesbury BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Aylesbury. This in part reflects amplified uncertainty about the short term economic outlook (e.g. Brexit, Issues in the Far East etc.).   

Now I know a lot of Aylesbury landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Aylesbury investors will return for the right Aylesbury property later in the year, especially if it is at the right price and offers a sensible yield. However, in the meantime, Aylesbury FTB’s could and should, in the short term, make hay whilst the sun shines.

I love a mud bath in the sunshine.

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