The most recent set of data from the Land Registry has
stated that property values in Aylesbury and the surrounding area were 7.98%
higher than 12 months ago and 26.46% higher than January 2015.
Despite the uncertainty over Brexit as Aylesbury (and
most of the UK’s) property values continue their medium and long-term upward
trajectory. As economics is about supply and demand, the story behind the Aylesbury
property market can also be seen from those two sides of the story.
Looking at the supply issues of the Aylesbury property
market, putting aside the short-term dearth of property on the market, one of the
main reasons of this sustained house price growth has been down to of the lack
of building new homes.
The
draconian planning laws, that over the last 70 years (starting with The Town and Country
Planning Act 1947) has meant the amount of land built on in the UK today, only
stands at 1.8% (no, that’s not a typo – its one point eight percent) and that
is made up of 1.1% with residential
property and 0.7% for commercial property. Now I am not advocating building modern
ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with
the building of massive out of place ugly 1,000 home housing estates around the
beautiful countryside of such villages as Quainton, Whitchurch and Aston
Abbotts.
The
facts are, with the restrictions on building homes for people to live in, because
of these 70-year-old restrictive planning regulations, homes that the youngsters
of Aylesbury badly need, aren’t being built. Adding fuel to that fire, there
has been a large amount of landowners deliberately sitting on land, which has
kept land values high and from that keeping house prices high.
Looking at the demand side of the equation, one might
have thought property values would drop because of Brexit and buyers
uncertainty. However, certain commenters now believe property values might rise
because of Brexit. Many people are risk adverse, especially with their
hard-earned savings. The stock market is at an all-time high (ready to pop
again?) and many people don’t trust the money markets. The thing about property
is its tangible, bricks and mortar, you can touch it and you can easily
understand it.
The Brits have historically put their faith in bricks and
mortar, which they expect to rise in value, in numerical terms, at least. Nationally,
the value of property has risen by 635.4% since 1984 whilst the stock market
has risen by a very similar 593.1%. However, the stock market has had a roller
coaster of a ride to get to those figures. For example, in the dot com bubble
of the early 2000’s, the FTSE100 dropped 126.3% in two years and it
dropped again by 44.6% in 9 months in 2007… the worst drop Aylesbury
saw in property values was just 19.6% in the 2008/9 credit crunch.
Despite the slowdown in the rate of annual property value
growth in Aylesbury to the current 7.98%, from the heady days of 12.71% annual
increases seen in early 2010, it can be argued the headline rate of Aylesbury
property price inflation is holding up well, especially with the squeeze on
real incomes, new taxation rules for landlords and the slight ambiguity around
Brexit. With mortgage rates at an all-time low and tumbling unemployment, all
these factors are largely continuing to help support property values in Aylesbury
(and the UK).
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