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.

A stunning house on Wendover Road, Weston Turville.

Being in the property business every now and again you see a house that ticks all your boxes. This house does that for me. A stunning large kitchen open to dining room, great for entertaining. Generous bedrooms and enough of them to use one as a study. Big enclosed garden for Nala the Husky to run around in. Good parking area for multiple vehicles, good location.






Full details are available on Rightmove
http://www.rightmove.co.uk/property-for-sale/property-57077465.html
If it ticks your boxes you will need to contact the selling agents at Fine & Country not me.

Aylesbury Landlords could be fined £291,000 per year

“Who would want to move to Aylesbury in weather like this?” was what one landlord said to me as we shook hands outside his property, the other afternoon. It was windy, cold, dark, it had been raining most of the day and it was the last appointment of the day at 5.45pm. I will admit, as I had been out of the office all day, I was looking forward to getting home, putting the fire on, and watching telly with a big mug of tea… but this landlord lived in neighbouring Tring and this was the earliest he could do. 

It turned out he had been self-managing the property over the last few years, but was concerned with all the new legislation that had been introduced recently and that there was more to come. He was particularly concerned about the up and coming ‘Right to Rent’ legislation, so as his tenant had handed in their notice recently, on this new tenancy he called us for our opinion.

For those Aylesbury landlords that don’t know, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the 'Right to Rent' rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.

Our landlord from Tring wanted to know how much of a real issue was ‘Right to Rent’ in Aylesbury. I was able to tell him, the last available figures (from a couple of years ago) show that 97 people (whom were registered as Non-UK Born Short-term Residents) moved into private rented accommodation in the Aylesbury Vale District Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £291,000 to the landlords of the town.

It doesn’t sound a lot when you think there are 71,977 residents in Aylesbury, and of those, 60,744 people (or 84.39%) were born in the UK. But Aylesbury is a cosmopolitan town as the country of birth of the residents in Aylesbury can be split down as follows:

·         UK                                                                          84.39%

·         Ireland                                                                     0.87%

·         Europe                                                                     4.50%

·         Africa                                                                       2.81%

·         Middle East and Asia                                            6.08%

·         Americas and Caribbean                                      1.10%

·         Australia and Pacific region                                 0.27%   

However, it must also be recognised that landlords, by checking up on tenants, could potentially be accused of discrimination under the Equality Act. This is a real minefield for landlords, especially when you consider that not all of the 3,239 Europeans in the area necessarily have the right to live in the UK either. 

In a nutshell, Aylesbury landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include ...

·         UK Passport

·         EEA Passport/Identity card

·         Travel document or Permanent Residence Card showing indefinite leave to remain

·         Paperwork from Home Office stating their Immigration status

·         Certificate of registration or naturalisation as a British citizen. 

The new law will target dishonest landlords who repeatedly fail to carry out Right to Rent checks by making it a criminal offence. This means they could face imprisonment for failing to check on their tenants. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.

So what did our landlord do?

Well after our chat, he asked us to find a tenant and manage the property for him - he had been reading the Aylesbury Property Blog for a while and because of the knowledge we impart to the landlords of Aylesbury, we obviously know what we are talking about.  Even better news for him, though this would cost him agency fees, we were able to get him a higher rent per month for his property.

To keep in touch with the Aylesbury property market sign up to this blog and stay informed at http://theaylesburypropertyblog.blogspot.co.uk/ .

 

Nala enjoying the sights from Coombe Hill

 

Will the young people of Aylesbury ever own their own home?

I had the most interesting chat with a couple from Bedgrove the other day, whilst viewing one of our rental properties. The property was not for them, but their son, who wanted a second viewing with his parents to get the parental blessing. Now I know that is not the norm, but in this case the parents were going to act as guarantor. We got to discussing the Aylesbury property market and how they had bought their first property in the town just after they got married in the late 1980’s when they were in their early/mid 20’s. Anyway, we got chatting about how the youngsters of the UK seem to rent more than buy nowadays and from that the conversation covered a number of similar topics. I want to share the main thread of that conversation with you today.

Their son, like many 20 to 30 year olds in Aylesbury, desperately wants to own his own property and the parents said he had read in the Telegraph recently, when you compare house prices to earnings, the current 20 to 30 something’s generation have to spend more of their salary in mortgage payments than any previous generation. The demand for private rental sector accommodation in Aylesbury is huge. There are in fact 4701 private rental properties in Aylesbury at the last count, impressive when you consider there are 1,254 council houses in the town. However, let us not forget 19,022 properties are owner occupied (11,918 with a mortgage).

Let us all be honest, private renting doesn’t have the stigma it had a few decades ago and it might surprise people that even though us Brit’s class ourselves as a nation of homeowners, roll the clock back 100 years and over 75% of people rented their own home (and it was all from private landlords as council housing only started to come in with the ‘homes for hero’s’ after the first World War). It might also surprise you to learn that at the time of the 1971 census, still more people rented than owned their own home.

Looking at the affordability issue, it is in fact cheaper to buy a property than rent, when one looks at starter homes for first time buyers. 95% mortgages have been available to first time buyers for over four years and whilst you could certainly find better properties in better condition in better areas, terraced houses can be bought for as little as the mid £130,000’s (meaning a modest deposit of £6,500 would be required).

When it came to affordability, I was able to tell them that when they bought their first house in Aylesbury in 1988, the ratio of house prices to salary was 7.54 to 1 in Aylesbury ... and here was the surprise for both of us, today’s ratio is only 6.53 to 1!

I said I believed there had been a cultural attitude change towards renting property in Britain and that this quiet revolution was likely to be permanent. In the 60’s, 70’s and 80’s, saving for the deposit was everything and buying a house was everything. I am sure many of you like me can remember the sacrifices made to ensure I saved a deposit as quickly as possible. Youngsters today have far much more disposable income than people had in the Callaghan and Thatcher years. But choose to spend it upgrading their mobile phones every 12 months, treating themselves to the newest tablet or PC, a new 50” plasma LCD TV and two sun drenched holidays a year, rather than go without and save for a deposit. It is just not as important now as it was then, attitudes to renting have changed.

Yes, there are horror stories of tenants living in rat infested properties with landlords who charge massive rents and don’t repair their properties. But that is very much the exception as most tenants rent homes of a quality they could not ever to afford to buy. Twenty years ago, if you said you rented a property, you were considered the lowest of the low ... but now it is the new normal.

So with mortgage affordability being well within the bounds of most first time buyers, the level of deposit required for a 95% being surprisingly modest (starting off at c.£6,500 in Aylesbury as mentioned above) until we change our attitudes, the UK housing market is slowly but surely turning into a more European model, where people rent for long periods of their life, then eventually inherit their parents properties and subsequently become homeowners themselves, albeit later in life.

I cannot see the demand for good, high quality rental properties dropping in the next 10 to 20 years, but only ever increasing as the population continues to soar. Just make sure if you are becoming a landlord for the first time that you buy the right property, at the right price, in the right location. One source of information on such matters would be the Aylesbury Property Blog http://theaylesburypropertyblog.blogspot.co.uk/ or pop in and have a chat with me when you are passing my office in Temple Street. ian@mortimersaylesbury.co.uk

 

Nala and the Mortimers team wish you a Happy and Prosperous 2016

Has 2015 been a good year for Aylesbury landlords?

This is a question I have been asked often over the last few weeks by landlords.

I think most of you will give a resounding yes to this question!

Substantial property value increases have given good capital growth to most landlords, by tens of thousands of pounds in many cases.

 Improved income through increased rents and reduced void periods has benefitted most.

Further, many landlords have been able to reduce costs by re mortgaging and taking advantage of the many low fixed rates available in the mortgage market, protecting their cost base for the future against an impending rate rise.

Some landlords have taken advantage of the above positive factors and added to their portfolio through 2015.

However there are a few clouds on the horizon. Extra Stamp Duty for second home purchases, changes to tax relief for buy to let landlords, extra costs for landlords to meet the raft of new and pending legislation.

Many of these factors are not news… we are all aware and they have been much reported in the media. But what we are not sure of is the impact they will have on the market.

Miles Shipside Rightmove Director ‘this is December’s best post-financial crash performance, signalling another round of price rises in 2016. Despite the shortage of suitable stock in many parts of the market, demand for housing is on the up. Although the average price of property coming to the market is already up by a hefty 7.4% compared to a year ago, Rightmove forecasts that prices will reach and breach new records next year’.

Rightmove’s 2016 forecast is for new seller prices to rise by 6%.

Will there be an assault on the market from landlords trying to buy before the new Stamp Duty regime applies in April?

Will first time buyers hold back from buying until after April in the hope prices will reduce once the new Stamp Duty puts landlords at a financial disadvantage and the competition for stock is reduced?

Will there be a rush of landlords through 2016 trying to sell and reduce their gearing in light of pending tax changes? Will this new stock be in sufficient volume to drive down prices as supply outstrips demand?

Will America put up interest rates and will we follow? Or will Janet Yellen back off at the last minute as previously?

I imagine we each have our own views. What we do about it will depend on our own prevailing circumstances and financial situation…I would love to hear from you with your opinions.

Some landlords I have spoken to recently have some interesting thoughts. One landlord intends to invest money into his existing portfolio by moving kitchens into the lounge and where possible turn the kitchen in to a bedroom making one bedroom units into two bedroom units and enhancing the rent (reflecting many of the new builds/conversions that have a similar layout).

Another is remortgaging his whole portfolio to fixed rate schemes with a view to driving his expenses down to offset any increase in his tax bill.

Interestingly I have not spoken to any landlord that intends to sell his portfolio, after all most of us bought a buy to let for the long haul…either to help our retirement income in years to come or in many cases to help  our children when the time comes.

Whatever your view as always it is essential to buy right. There are very few bargains to be had but buying a property that will let well and have a good chance of sensible value growth is essential. There are many new flats on the market and many more waiting to come to market, all at high prices. Whilst these will let well I struggle to see the option for capital growth being as good as a freehold house where supply is much more limited.

As always the Aylesbury Property Blog will keep you touch with market trends, http://theaylesburypropertyblog.blogspot.co.uk/   or pop in to see me in my Temple Street office when you are passing. Enjoy the festive season.

Please feel free to comment below.

 

The Aylesbury Property Market and £1,300,000,000,000,000,000 in loose change

The 5^th of March 2009 was the date Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8^th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Now as we deck the halls with bows of holly nobody expected that, over six years later, rates would still be at that low level.

In the summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Aylesbury, so I cannot profess to know what will happen to interest rates. However, what I do know, speaking to my Aylesbury friends and Aylesbury landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Aylesbury landlords have been investing some of that cash into Aylesbury bricks and mortar, as they search for a low risk investment opportunity.

Buying an Aylesbury buy to let property is not risk free, but there are certainly things you can do to mitigate and lower exposure to risk. Buying a rental property potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, Aylesbury house prices have been extraordinarily robust, increasing by over 2148% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

... and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (apart from some faceless whizzkids in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

...  but before you go out and buy any old Aylesbury property, plenty of landlords still get it wrong. You have to be aware of your legal responsibilities when it comes to tenant safety, tenants deposits, energy certificates and in the new year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that is why many agents use a letting agent to manage their property for them. Even then you need to be careful with your choice of agent!

Next, you have to buy the right property at the right price. Recently I have seen some situations in Aylesbury and the immediate area, where people pay way too much for a property, only to lose out when they come to sell.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Aylesbury Property Blog where I have similar articles to this about the Aylesbury property market. If you have not visited and you are interested in the local property market in Aylesbury ... you are missing out! .. http://theaylesburypropertyblog.blogspot.co.uk/

Nala waiting for dad to come home and play with her new toy.

The Aylesbury market in 2015

Many landlords have been asking me my thoughts on the Aylesbury property market recently, and in particular, what is happening to property values. Property values in Aylesbury grew in the month of September by 0.4%. When one looks at the annual growth, Aylesbury values are 8.4% higher (when comparing Sept 14 to Sept 15).  However, there are signs that the fundamental growth of property values in Aylesbury has now peaked, despite those average property values being above levels recorded in 2007 (just before the 2008 crash).

Even though prices are higher this month, this impressive rise of Aylesbury property values masks the underlying truth in what is really happening to local property values in the town. Throughout 2015, property values have been yo-yo like on a month by month basis, being quite volatile in nature.  For example,

·         September 2015               0.4% rise

·         August 2015                       1.4% rise

·         July 2015                              1.3% rise

·         June 2015                            0.9% rise

·         May 2015                             0.2% rise

This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by over 15% in August, according to the Council of Mortgage Lenders (CML).

The outlook for the Aylesbury property market remains positive against the foundations of low mortgage rates and growing consumer confidence. Aylesbury property values are still running ahead of salaries and average property values are 13.2% above the levels recorded in 2007.

Talking to fellow property professionals in the town, demand for property has been showing signs of moderating in the final few months of 2015, which in turn will lead to a slight slowdown in the pace of house price growth in the run up to the festive season. You see, it is really important not to read too much into one month’s (September’s) headline figures.

Readers might be interested to note that before the 2008 property crash, all the UK region’s housing markets tended to move up and down in tandem like the Aylesbury Synchronised Swimming team.  Since then though, the Greater London property market took off like a rocket in 2009/10, whilst the rest of the UK only really started to grow in 2012/13, and even then that growth was a lot more modest than the Capital’s.

Looking closer to home, it can even be different in neighbouring towns, areas and cities, so whilst Aylesbury property values are 8.4% higher than a year ago (as mentioned above), Milton Keynes property values are 9.1% higher than a year ago.

If you are considering buying to let in the area I cannot stress enough the importance of doing your homework.  One source of information and advice is the Aylesbury Property Blog where I have similar articles to this about the Aylesbury property market and what I consider.  If you have not visited and you are interested in the local property market in Aylesbury….. you are missing out! http://theaylesburypropertyblog.blogspot.co.uk/

The Buy to Let market continues to grow!

The Council of Mortgage Lenders (CML) latest snapshot of the buy to let mortgage market shows us that buy to let landlords haven’t been put off by the Chancellors announcements on the way buy to let properties are taxed.

Last month, the CML stated £1.4 billion was borrowed by UK landlords to purchase 10,500 buy to let properties, up 26.5% from the same month in 2014, when only 8,300 properties were bought with a buy to let mortgage. Go back two years and the number of buy to let mortgages used for purchasing (again not re-mortgaging) is 36.4% higher! Even more interesting has been the fact that the average amount borrowed has risen as well. The average buy to let mortgage last month was £133,330, up from £128,480 a year ago.

In Aylesbury, I am speaking to more and more landlords, be they seasoned professional landlords or first time landlords, as they read reports that the Aylesbury rental market is doing well, with rents and property values rising.  Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).

However, the first thing you have to decide is whether you want great capital growth or great rental yield, as every landlord knows, you cannot have both. Over the last twenty years, property values in Aylesbury have risen by 256.69%, compared to Greater London’s 436.2%. This has proved that capital growth increases faster in the more expensive Capital, but your investment money does not go very far, meaning there will not be as much rental yield from a one bed flat in Chelsea (2% per year at best) as there would be with a two bed semi in Aylesbury. However, whilst the figure of 256.69% is an average for the area, certain areas of Aylesbury have seen capital growth much higher than that and others areas not so well (we have talked about those in previous articles).

Clearly there are still many landlords coming into the market, regardless of potential tax changes in the future. There are various ways in which you can mitigate the potential tax changes and I would be happy to discuss some of these if you have any questions.

In the meantime if you are looking to buy, I will keep you in touch via this blog with the changes to the Aylesbury market place. As always consider very carefully your objective and whether or not the property and location you are buying meets the criteria needed to achieve your goals.

If you would like to discuss your investment plans or a proposed purchase, please don’t hesitate to get in touch. Pop into my office in Temple Street or email me at Ian@mortimersaylesbury.co.uk

You can find similar articles and information at http://theaylesburypropertyblog.blogspot.co.uk/

Aylesbury Buy To let –Freehold House or Leasehold Flat?

I wish to answer a question emailed into me from a potential Aylesbury landlord last week. Nice chap ... lives in Broughton, and it turns out, after having a coffee with him, he works in IT, has some available capital (now the kids have flown the nest) and wants to buy his first buy to let property.

His main question was ... Do I buy a freehold house or a leasehold flat in Aylesbury?

This is the most frequently asked question from those landlords and potential landlords I talk to. Most people will say freehold every time, because you own the land. However, it is not as simple as that. The definitive answer though is to research what Aylesbury tenants want in the area of Aylesbury they want to live in! The tenant is ultimately your customer, if they don't want to rent what you decide is best to buy, then you are not going to have a successful Buy to Let investment. So start with the tenant in mind and work backwards from there, you won’t go far wrong. In short, find the demand before you think about creating the supply.

Leasehold flats and apartments in Aylesbury are excellent in some respects as they offer the landlord certain advantages, including the fact a flat will generally be less expensive to buy. Yields can be good, offering sensible cash flow. The building will already be insured and yes there is a service charge, but it is for a service at the end of the day and that cost is spread between many others (i.e. when your freehold house roof goes, its falls 100% on your shoulders) and one of my favourites - there is often no garden to maintain or blown down fences to replace!

However, some Aylesbury leasehold flats can suffer from poor capital growth particularly if they are affected by any of the below mentioned points; Some leasehold properties, in particular the more modern developments will have higher levels of service charges while they are building up a ‘sinking fund’. The length of the lease will significantly affect value if not renewed before it gets too short. Thankfully there are not many, but some Aylesbury apartments have burdensome clauses. Finally, with leases, there can be sub-letting issues – which means you can’t let them out. You need to research your potential purchase thoroughly!

So what do the numbers look like? Since 2003, the average freehold property in Aylesbury (detached, semis and terraced) has risen from £180,346 to £297,342 in value, a rise of 65% whilst the average Aylesbury leasehold property (flats and apartments) has gone up in value from £91,735 to £148,044, a similar rise of 61%. 

It may be interesting to note that of the 8,096 rental properties in the Aylesbury District Council area that the Office of National Statistics state that 32.9% (2,662) of all rental properties are apartments. However, there are only 8,098 apartments in the whole council area (be they owned, council rented or privately rented), which represents 11.7% of the whole housing stock in the area. There is a high proportion of Aylesbury’s leasehold apartments rented to tenants compared to freehold detached, semi’s or terraced.  

My advice to any prospective landlord as it is to you is to do your homework.  I am pleased to say that the potential landlord from Broughton has now agreed a purchase for a freehold property and is very happy with the advice and support he has received. If you would like to discuss your investment plans or a proposed purchase, please don’t hesitate to get in touch. Pop into my office in Temple Street or email me at Ian@mortimersaylesbury.co.uk

You can find similar articles and information at http://theaylesburypropertyblog.blogspot.co.uk/

 

Aylesbury Tenants Pay 34.6% of their Salary in rent

I had an interesting chat with a local Aylesbury landlord yesterday about my thoughts on the Aylesbury property market. The subject of the affordability of renting in Aylesbury came up in conversation (there’s a surprise) and how that would affect tenant demand. Everyone wants a roof over their head, and since the 1940s, owning your own home has been an aspiration of many of us.  However, with rents at record highs, many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first time buyers deposit.

I thought I would do some research into the Aylesbury property market and share with you my findings.  Aylesbury tenants spend on average just over a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Aylesbury is £763 per month.  When the average annual salary of an Aylesbury worker stands at £26,466 per year, that means the average Aylesbury tenant is paying 34.6% of their salary in rent.  I doubt there is much left to save for a deposit towards a house after that, and that my Aylesbury Property Blog reading friends is such a shame for the youngsters of Aylesbury.

You see one of the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a lack of new properties being built   It’s the classic demand vs supply scenario, where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also, Aylesbury people aren’t moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, a few weeks ago I said back in Winter 2007, there were over 1,600 properties for sale in Aylesbury and since then this has steadily declined year on year, so now there are only 354 for sale in the town.

So, the planners in Aylesbury haven’t allowed enough properties to be built in the town and existing Aylesbury homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Aylesbury to match demand. These are the reasons houses prices in Aylesbury have remained quite buoyant, even though economically, over the last 5 years, it was one of the worst on record for the country and the South East region as a whole.

However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey  (their Generation Rent 2015 Survey) suggested  more and more people may be long term, if not lifelong tenants. In fact there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45.  It seems from this survey that the state of the UK economy has shifted priorities quite significantly in quite a short space of time.  With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people are seeking rental properties.

 It is often said that more people in central Europe rent for longer or never own their own property. The last two census in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and, as a country, we are becoming more and more like Germany.   That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays, often quoted,  is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that, they have a higher personal income than in the UK.

Therefore, if we are turning into a more European model and the youngsters of Aylesbury and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Aylesbury tenants as wages will start to rise and good news for Aylesbury landlords, especially as property values in Aylesbury are now 8.8% higher than a year ago!

To discuss this or any other article in my blog please email  ian@mortimersaylesbury.co.,uk or pop in to my Temple Street office when you are passing.

How EU Migration has changed the Aylesbury Property market

The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years. In this article I talk about what it has done for the Aylesbury Property market.

Before we look at Aylesbury though, let us look at some interesting figures for the country as a whole. Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home. It might surprise people that only 5.07% of EU migrants managed to secure a council house. However, 676,091 (69.62%) of them went into the private rental sector.  This increase in population from the EU has, no doubt, added great stress to the UK housing market.

Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that is affected the most.  Indeed, I have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants. In 2001, 3.68 million rented a property from a landlord in the UK.  Ten years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a landlord, there were actually an additional 4.14 million people who became tenants and were not EU migrants, but predominately British!

As a landlord, it is really important to gauge the potential demand for your rental property, especially if you are a landlord who buys property in areas popular with Eastern European EU migrants.  To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number (which EU members are able to obtain).

In Aylesbury Vale, migration has risen over the last few years. For example, in 2007 there were 1,237 migrant national Insurance cards (NIC) issued and the year after in 2008, 1,094 NIC cards were issued. However, in 2014, this increased slightly to 1,423 NIC’s. However, if the pattern of other migrations since WW2 continues, over time there will be an increasing demand for owner occupied property, which may affect the market in certain areas of high migrant concentration. On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.

In essence, migration has affected the Aylesbury property market; it couldn’t fail to because of the additional 9,353 working age migrants that have moved into the Aylesbury area since 2005. However, it has not been the main influence on the market. Property values in Aylesbury today are 34.49% higher than they were in 2005. According to the Office of National Statistics, rents for tenants in the South East have only grown on average by 0.95% a year since 2005 .... I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the Aylesbury property market. This was backed up by the then Home Secretary Theresa May back in 2012 - more than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20 year period. 

If you want to know more about the Aylesbury property market, then for more articles like this, please visit the Aylesbury Property Blog http://theaylesburypropertyblog.blogspot.co.uk/ or pop in to my Temple Street office when you are passing.