Tuesday, 30 May 2017

35 miles – The average distance people go to escape living in Aylesbury

“How far do Aylesbury people go to move to a new house?” This was an intriguing question asked by one of my clients a few weeks ago. Readers of my property blog will know I love a challenge, especially when it comes to talking about the Aylesbury Property Market!  

For the majority, the response is not very far. It is much more common for homeowners and tenants in Great Britain to move across town than to the next town or county. Until now, it’s been hard to say how many homeowners and tenants moved from (and to) relatively far away to buy or rent their new home. However, I carried out some research and requested some statistics from the Royal Mail. What came back was interesting! 

Using statistics for the 12 months up to the middle of Autumn 2016, 478 households moved out of Aylesbury (HP21), moving an average distance of 35.06 miles - the equivalent of moving from Aylesbury to Daventry (as the crow flies).  The greatest distance travelled was 432 miles – that’s more than 16.5 marathons (when someone moved to Alness in Scotland). 

Considering there were 412 property sales in HP21 in the year and countless tenant moves, the numbers seem consistent – once you find a town you like, you tend to want to settle down and if you do move, you might only move to a different neighbour-hood, or for better transport links or, to be closer to the school you want to get your children into, but the likelihood is you won’t travel far.

 I then turned my attention to people moving into Aylesbury. Using the same statistics for the 12 months up to the middle of Autumn 2016, 403 households moved into Aylesbury (HP21), moving an average distance of 26.47 miles - the equivalent of moving from Welwyn Garden City to Aylesbury (again as the crow flies). The greatest distance travelled was 330 miles – that’s more than 12.5 marathons (when someone moved from Dunblane in Scotland to Aylesbury).

I have looked at the data of every person moving into Aylesbury and these have been plotted on a map of the UK. Looking at the map below, it shows exactly where most people come from, when moving into Aylesbury. As you can see, there are a high proportion of people moving from London and the South.

So, what does all this mean for the landlords and homeowners of Aylesbury? 

When an agent markets a property for rent or let, it is vital to know the tenant or property buyer well, that the properties they are letting/selling fit those tenants/buyers, so they almost sell themselves. These days that means not only knowing how many bedrooms, reception rooms etc., a property offers but the budget buyers and tenants want to spend on a property in that area as well as where they come from.  

The estate and lettings industry loves the mantra “location, location, location”. I say it might be helpful to factor in where (and how) far people are moving from, so the property can be sold or let more easily. Many say knowledge is power and whilst I do enjoy writing my blog on the Aylesbury property market, I also use the information to help my clients buy, let and sell well. So for example, the information gained for this article, will enable my team and I to be more efficient in where to direct our marketing resources to ensure we maximise our clients’ properties sale-ability or rent-ability.



Friday, 26 May 2017

Aylesbury property professionals give their view on the Aylesbury buy to let market

Aylesbury property professionals give their view on the Aylesbury buy to let market.

I get the chance to quiz some local property people on their views in the current market. I have asked the questions that I get asked most frequently so hope this is useful. Enjoy the sunny Bank Holiday weekend!
Keith Witchell of KRW Accountants

Eleanor King of Parrott and Coales
Robert Smith financial adviser
As always get in touch for more information or help with your buy to let plans. ian@mortimersaylesbury.co.uk

Tuesday, 23 May 2017

A Brief Guide to Buying to Let in Aylesbury

What are you trying to achieve?

If you are considering buying a property to let out there are many things to consider. The first and most important is to establish clearly what it is that are you trying to achieve.
It may be income, capital growth, an investment that can be passed to children or a combination of all of these.
Not all properties meet each of these criteria to the same degree. As a general rule property with a high yield is more likely to suffer low capital growth and the reverse is also true.
Most landlords try to buy a property that has a sensible growth potential with a yield that will at least cover costs. A property of this type by virtue of its location and quality is likely to be suitable to pass on to children in later years.
Average yield in Aylesbury? 4% to 6%
What and where should you buy?
This is often driven by the landlords own experience and knowledge…we like to do what we are comfortable with! Nothing wrong with that.
Generally a two bedroom modern house in good location is the best buy. Not Victorian (too much maintenance), not a flat (lower capital growth due to strong supply), not a three bedroom house (lower capital growth and more wear from family occupation).
In a location that is generally well regarded locally (Fairford Leys, Watermead, Lavender Grange etc. the good modern estates). Pylons, main roads, train lines etc. do not have the same impact for tenants that may only be there a short time, if you are able to buy at the right price not an issue.
When should you buy?

Well this is always a tough one, a little like choosing the best time to have kids. Unless you commit it will never happen! When I bought my first buy to let after hesitating for several years I watched the market fall for the following two years. But right now having seen the growth of recent years it was the best thing I ever did. Remember you will only make a loss if you sell, just keep holding the property…buying a buy to let is a long term plan, you won’t get rich quickly unless you are very fortunate.
Will I have to pay Stamp Duty?
Yes…the rates payable for second home purchases changed in April 2016. Details here
Should I set up a company to purchase the property?
There are some advantages but they are limited unless you are buying several properties.
Will I need to pay tax on the income?

Almost certainly yes but you should take advice from an accountant and will need to complete tax returns annually.
What about Capital Gains Tax?
Yes you will need to pay CGT when you sell assuming the profit exceeds your annual allowance and purchasing costs. There are things you can do to mitigate this cost.
The future?
Many landlords have been successful in buying numerous properties using the equity gained in existing property. This is a great way to expand a portfolio over time.
This is a very brief guide only. The Aylesbury Property Blog contains much more detail and includes the journey of landlords that we have secured property for.
You can contact Keith Witchell of KRW Accountants here or call 01327 810373.
Contact me, Ian Davies on 01296 398555 ian@mortimersaylesbury.co.uk to discuss your plans in more detail.
Lazy afternoons

Tuesday, 16 May 2017

What is happening in the Aylesbury property market?

Up to date comment and views from the team at Mortimers. Are prices to let too high, are they holding back the market and putting off new tenants? Should you be buying to let in the current climate?

When you are passing our office in Temple Street please drop in to discuss your purchase/investment needs. If you are not getting the service you want from your current agent I am sure we have an incentive package that you would find interesting...we would love to help you

What will the General Election do to 19,022 Aylesbury Homeowners?

In Aylesbury, of the 28,877 households, 7,104 homes are owned without a mortgage and 11,918 homes are owned with a mortgage. Whether I am out walking with Nala or out with friends the one question I will be asked above all others is what the General Election will do the Aylesbury property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. This gives us some very interesting information.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 ... in terms of the number of houses sold and the prices achieved. 

Look at the first graph below comparing the number of properties sold and the dates of the general elections.

It is clear, looking at the number of monthly transactions (the blue line), that there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has not changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season - i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year). 

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was a significant uplift in number of households sold, whilst in 2010 and 2015, there was a slight drop in house transactions (i.e. number of properties sold).

I also wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market. 

So finally, what does this mean for the landlords of the 4,701 private rented properties in Aylesbury? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Aylesbury will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been an overheating of rental property prices in Aylesbury, making it imperative that Aylesbury landlords are realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy ... the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.

To read more about the Aylesbury property market –visit the Aylesbury Property Market Blog for more information http://theaylesburypropertyblog.blogspot.co.uk/

Thursday, 11 May 2017

Aylesbury Flats Out Perform Property Market Average by 10%

According to the Land Registry's latest House Price Index for Aylesbury and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property. 

Values of apartments in Aylesbury have increased by 12.84% over the past year, which is proportionally 10% more than the Aylesbury average rise of 11.63%. The last time flats/apartments in Aylesbury out performed all the other types of property, by such a gulf, was back in the spring of 2005. For comparison, the other property types performed as follows ..

·         Detached homes rose by 11.78%
·         Semi-detached homes rose by 11.15%
·         Terraced/Town-Houses rose by 11.30% 

This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Aylesbury property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Aylesbury on a number of occasions in my Aylesbury Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers. 

The average property value in Aylesbury
now stands at £380,700. 

When split down into property types .. 

·         Aylesbury Apartments at £201,600
·         Aylesbury Detached at £608,800
·         Aylesbury Semi-Detached at £342,000
·         Aylesbury Terraced/Town-House at £287,800 

So why have Aylesbury apartments performed so well, and is it just an Aylesbury thing? Well in part the apartments have been pulled along by the lack of two bedroom houses. But when I scrutinised the figures for the rest of the UK, it appears that apartments are currently leading the pace in a clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.

So, should Aylesbury apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Aylesbury house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.

Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016. 

So, what next for the Aylesbury Property market? I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely. 

I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all.

Monday, 8 May 2017

You can still buy good affordable two bedroom houses in Aylesbury

I had a lengthy and very interesting conversation with an existing landlord today. We have known each other for about 10 years and talk the same language. He has several properties locally which I helped him to source and now manage for him together with others outside of the Aylesbury area. We were discussing the merits of buying an Aylesbury property in the current climate where purchase prices are so strong and stock (choice) is limited.
He is looking to buy another two bedroom house and prefers to buy on the modern estates (Fairford Leys, Watermead etc.) which are out of reach presently as his current budget is limited to £230,000.
I suggested he look at cluster houses like those on the Willows but he was not keen, does not feel the returns are as good in that location or with that property type.
I suggested we did some research together at my desk.
Rightmove shows a selection of the mentioned cluster houses available right now (shown here) . Prices range from £220,000 to £230,000 so are in the right price range for him. But what about rental values, yield, capital growth?
Rent ranges are £850 to £900. So depending on the price you have to pay and the rent you achieve a yield of 4.4% to 4.9% gross is readily available...compares well with Aylesbury averages.
Capital growth? Well this is the icing on the cake! Go back 5 years to 2012 and these properties were selling for around £130,000...these unassuming ordinary properties have made their owners £100,000 in just 5 years, £20,000 per annum... that's more than £1500 each and every month!
We discussed the potential future market and what returns could be seen in the future. Rents are growing and there is increasing demand ahead of us...this government nor the next are likely to be brave enough to address the lack of housing adequately. So continued capital growth and rent increases will prevail.
My landlord booked two appointments to view before he left my office. I should have another two bedroom cluster house to rent in around two months time!

If you are thinking of investing for the first time or want to add to your portfolio I am always available for a chat. I talk to dozens of landlords every week so I get to hear who is making it work and how. ian@mortimersaylesbury.co.uk

Nala thinks she would make a great secretary.

2.26 Babies Born for Each New Home Built in the aylesbury Area

As more babies are being born to Aylesbury mothers, this increase will continue to add pressure to the over stretched Aylesbury property market and materially affect the local property market in the years to come. 

On the back of eight years of ever incremental increasing birth rates, a significant 2.26 babies were born for every new home that was built in the Aylesbury council area in 2016.  I believe this has and will continue to exacerbate the Aylesbury housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Aylesbury rents and Aylesbury property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

 This ratio of births to new homes has reached one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Aylesbury council area had an average of 66.2 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region it’s also 61.7 births per 1,000 women aged 15 to 44.

 The number of births from Aylesbury women between the ages of 20 to 29 are closer to the national average, but those between 35 and 44 were higher.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Aylesbury area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing ... a huge increase in the need for housing in Aylesbury.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Aylesbury people. 

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) ... demand for property is simply outstripping supply.

 Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of the Cotswolds, but the obsession of not building on any green belt land should be carefully re-considered.  

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Aylesbury, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.  

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!
For more thoughts on the Aylesbury Property market – visit the Aylesbury Property Blog

Relaxation Husky style.

Thursday, 4 May 2017

Hard Brexit could cause 1,900 properties to be dumped onto the Aylesbury Property market

So all cards up in the air! A general election will be on the books, but one thing is for sure ... whoever gets the job to deal with Brexit has a hard job on their hands (I'm just glad its not me!) As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Aylesbury (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU. 

Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Aylesbury ... but nothing could be further from the truth. 

Of the 170,651 people who are resident in the Aylesbury Vale District Council area, 152,496 were born in the UK, 3,962 were born in EU countries from West Europe and 1,742 were born in EU countries from the former Soviet States in East Europe (the rest coming from other countries around the world).
The rights of these EU citizens living in the Aylesbury area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Aylesbury will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years. 

So, what would a hard Brexit do to the Aylesbury property market?
Well a hard Brexit could mean the nuclear option when it came to the Aylesbury housing market. It could mean that every EU citizen would have to leave the UK.  

In the Aylesbury Vale District area, 2,713 of 3,926 Western European EU citizens own their own home and (so they would all need to be sold) and 1,131 of 1,742 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time. 

Hard Brexit and mass EU Migration would mean c. 1,900 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Aylesbury property values and rents, causing negative equity for thousands of Aylesbury homeowners and many buy-to-let landlords would be out of pocket. 

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation. 

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Aylesbury (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Aylesbury (and the surrounding area) to get work and provide for their families. Many Aylesbury people have invested their life savings into buying a buy to let property. 

Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK ... politics aside - a hard Brexit is in no one’s interests.

Tuesday, 2 May 2017

Should some of the 6,614 home owning OAP’s of Aylesbury be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Aylesbury society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Aylesbury home owning mature members of our society, ‘Generation Trapped’). 

So, should we force OAP Aylesbury homeowners to downsize? 

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s? Well, one of the biggest reasons OAP’s move home is health (or lack of it). 

Looking at the statistics for Aylesbury, of the 6,614 Homeowners who are 65 years and older, whilst 3,678 of them described themselves in good or very good health, a sizeable 2,261 home owning OAPs described themselves as in fair health and 675 in bad or very bad health. 

10.21% of Aylesbury home owning OAP’s are in poor health 

But if you look at the figures for the whole of Aylesbury Vale District Council (not just Aylesbury), there are only 266 specialist retirement homes that one could buy (if they were in fact for sale) and 826 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives. 

My intuition tells me the majority ‘would be’ Aylesbury downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Aylesbury population and specialist retirement properties for the ones who aren’t in such good health ... we need to build more appropriate houses in Aylesbury.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems within the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use carrot tactics and offer tax breaks for downsizers. Who knows – but something has to happen? 

... and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Aylesbury is ... more houses and apartments need to be built in the Aylesbury area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.