I was having lunch the other day at the Chequers Inn , Weston Turville, with a local Aylesbury solicitor friend of mine, when the subject of
property inevitablity came up. He asked me my thoughts on the Aylesbury
property market for the next five years. Property prices are both a British national
obsession and a key driver of the British consumer economy. So what will happen next in the property
market? Here is what I told him, and now share with you.
Before I can predict what will happen over the next five
years to Aylesbury house prices, firstly I need to look at what has happened
over the last five years. One of the key
drivers of the housing market and property values is unemployment (or lack of
it). That drives confidence and wage growth – key factors to whether people buy
their first house, existing homeowners move up the property ladder and even
dictates whether buy to let landlords have an appetite to continue purchasing
buy to let property.
When the Tory’s came to power in May 2010, the total number
of people who were unemployed in town stood at 1,489 (or 2.6% of the working
age population in Aylesbury parliamentary constituency). Last month, this had
dropped to 610 people (or 1.0% of the working age population).
As the Aylesbury job market has improved with better job
prospects, salaries are rising too, growing at their highest level since 2009,
at 3.4% per year in the private sector (as recently reported by the ONS). That is why, even with the turbulence of the
last few years, property values in the Aylesbury area are 25.62% higher today
than they were five years ago.
Many home occupiers have held back moving house over the
past seven to eight years following the Credit Crunch but with the outlook more
optimistic, I expect at least some to seize the opportunity to move home,
releasing pent up demand as well as putting more stock onto the market. With a
more stable economy in the town, this will, I believe, drive a slow but clearly
defined five year wave of activity in home sales and continued house price
growth in Aylesbury.
I forecast that the value of the average home in Aylesbury
will increase by 22.2% by 2021.
22.2% might sound optimistic to some, but according to Land
Registry, values are currently rising in Aylesbury at 8.1% year on year, I
believe my forecast to be fair, reasonable and a reflection of both positive
(and negative) aspects of the local property market and wider UK economy as
whole.
However, it would not do not to mention those potential
negative issues as I do have some slight concerns about the future of Aylesbury
housing market. The number of properties
for sale in Aylesbury is lower than it was five years ago, restricting choice
for buyers (yet the other side of the coin is that that keeps prices higher).
Interest rates were being predicted to rise around Easter 2016, but now I think
it will be nearer Christmas 2016 and finally the new buy to let taxation rules which
are being introduced between 2017 and 2021 (although choosing the right sort of
property / portfolio mix in Aylesbury will, I believe, mitigate those issues
with the next taxation rules).
I am telling the landlords I speak to, that with interest
rates at their current level 0.5%, the cash in your Building Society Passbook
is going to grow so slowly that it might as well be kept under their bed.
Property prices, by contrast, have rocketed over the years, even after the
property crashes, far outstripping bank accounts and inflation.
So my final thought ...
property is a long term investment, it has its’ up and downs, but it has
always outperformed, in the long term, most investments. Those in their 40’s and
50’s in Aylesbury would be mad
not to include property in their long term financial calculations. Just make
sure you buy the right property, at the price in the right location. One source
of information on such matters would be the Aylesbury Property Blog ... http://theaylesburypropertyblog.blogspot.co.uk/
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| I think I have her attention |
Very good thanks for sharing.
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