Average Rent Paid by Tenants in Aylesbury rises to £922 per month

Back in the Spring, there was a surge in Aylesbury landlords buying buy to let property in Aylesbury as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1^st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in HP20. 

Jan 2016 – 18 properties sold

Feb 2016 – 29 properties sold

March 2016 – 55 properties sold

April 2016 – 20 properties sold

May 2016 – 23 properties sold 

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction? 

However, there appears to be no apparent effect on the levels of rent being asked in Aylesbury - and more importantly achieved - and this direction of rents is not likely to reverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage. 

.. but it’s not all bad news for tenants. Whilst average rents in Aylesbury since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Aylesbury tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets) 

Year	Average Rent in Aylesbury per month
2005	752
2006	769
2007	786
2008	812
2009	825
2010	813
2011	833
2012	852
2013	864
2014	877
2015	897
2016	922

 I found it interesting looking at the rent rises over the last five years in Aylesbury, as it was five years ago we started to see the very early green shoots of growth of the Aylesbury economy.  As a whole, following the Credit crunch (2011), rents in Aylesbury have risen by an average of 2.4% a year.  

The view I am trying to portray is that while renting is often seen as the unfavorable alternative to home ownership, many young Aylesbury professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

 

 

Only 1.9% of Aylesbury Homes Are For Sale

The Aylesbury Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual after the summer break.  

The challenge every Aylesbury property buyer has faced over the last few years is a lack of choice – there simply has not been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Aylesbury, the market is likely to see upward pressure on property values continue. 

However, there may be hope for first time buyers, with homeowners looking to move upmarket and buy to let landlords looking for their next investment, the Aylesbury property supply just might be starting to ease, as the number of new properties coming onto the market in Aylesbury has increased.

For example, last month HP21 saw 89 new properties coming on to the market, for some months last year the average was in the low 40’s. With the average Aylesbury property value hitting a record high, reaching almost £359,300 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller' average property figure, but there is a glimmer of hope that  Aylesbury's supply may be starting to ease. 

As I write this article, 1.99% of Aylesbury properties are up for sale. That equates to 474 properties on the market in Aylesbury (within 2 miles of the centre of Aylesbury) – which, when compared to only a year ago when that figure stood at 306, is a serious increase in the number of properties available to buy. Split down into the type of property... 

·         Detached Properties in Aylesbury  - 60 on the market a year ago compared to 81 on the market now – an increase of 35%

·         Semi Detached Properties in Aylesbury - 81 on the market a year ago compared to 158 on the market now - an increase of 95%

·         Terraced Properties in Aylesbury - 61 on the market a year ago compared to 96 on the market now - an increase of 57%

·         Flats / Apartments Properties in Aylesbury  - 94 on the market a year ago compared to 114 on the market now - an increase of 21% 

With realistically priced properties flying off the shelves and this increase in new properties (especially semis), this is evidence of strength in the Aylesbury housing market that many did not expect. Many believed that the Aylesbury property market was not going to be strong enough post Brexit - as what was a sellers' market before the Brexit vote and Buyers' market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

 

However, all this will mean property values will not continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This will not be down to Brexit but a re-balancing of the Aylesbury Property Market – which is good news for everyone.

Private Renting set to grow by 2,000 Aylesbury households by 2025

I was having a chat with an Aylesbury landlord last week when we were looking at a property she was considering buying to let. (As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase for existing clients or those considering entering the market, you don’t need to be an existing client to take advantage of my time. If you prefer you can just email details and I can give you an honest view.) 

 We got talking about the Aylesbury Property Market and this landlord brought up the subject of a report she had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. She wanted to know what this meant for Aylesbury.

Well, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other landlords wanting to buy them! 

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Aylesbury? The fact is, as a country, we are facing a precarious rental shortage and need to get Aylesbury building in a way that benefits a cross-section of Aylesbury society, not just the fortunate few. This government should drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.  

Of the 28,900 households in Aylesbury, currently 11,200 tenants live in 4,700 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Aylesbury needs to rise by 2,000 (i.e. 42.8%) .. taking the total number of rented properties in the town to 6,700. 

That means Aylesbury landlords need to buy around 200 properties a year every year between now and 2025 to meet that demand – because , an additional 4,800 people will want to live in all those 'additional' Aylesbury rental properties – so why is the government penalising landlords? 

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Aylesbury house prices, the majority of new Aylesbury households will be relying on the rental sector in the future to house them. Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Aylesbury society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole. 

If you want to discuss your investment plans…where and what to buy for the best returns get in touch ian@mortimersaylesbury.co.uk

 

You coming for a swim dad?

 

THE POTENTIAL RETURNS FOR AYLESBURY LANDLORDS…THE JOHN AND ALICE STORY

John and Alice first contacted me at Mortimers in May 2012. They had already made the decision to buy property to let. Like you and me they had little faith in placing funds in a pension scheme and the returns to be had from the banks were derisory.

Initially we discussed the type of property to buy and had the whole apartment versus house discussion. I explained that we offered a full service helping landlords secure the right property for their needs as well as finding good quality tenants and managing the property ongoing. I suggested that they should also consider planning for Capital Gains Tax and Inheritance Tax at this early stage, there are several sensible things that can be done early in the buying process.

 Several houses were viewed before a purchase was agreed through Mortimers on a two bedroom house in Fairford Leys at £163,000. John attended one of our Landlord Drop in Sessions to ensure he could take advantage of the discounts offered.

Completion duly followed late in 2012. John and Alice with some help undertook various cosmetic works and a good tenant was secured, swiftly moving in during the December. Decision made, to first tenant moving in, in less than six months.

John and Alice took a few months to feel happy with the set up…as so often happens several maintenance issues had arisen as soon as the tenants moved in. But undeterred they secured a second property on Fairford Leys via Mortimers at £197,000, this time a town house, in the summer of 2013.

The original tenants are still in the first house although rent has gone up during the tenancy. The second house has just been let again at a higher rent. Both houses have seen significant capital growth totalling around £200,000 allowing John and Alice to purchase a third property on Fairford Leys which has just exchanged contracts. Two bedroom houses continue to let readily if presentation is good and the price is not over cooked.

John comments’ Mortimers have been great to deal with, helping us secure quality properties over the last few years. Their advice has undoubtedly helped me to build this portfolio of properties and their management of them has been efficient. It is great to see a company that gives great customer service thriving.’

If you are thinking of entering the buy to let market for the first time and want straight talking advice get in touch with ian@mortimersaylesbury.co.uk  

 

Is Aylesbury going to see more reluctant landlords?

I was helping out the sales team on Friday and ended up dealing with one of their vendors that had walked in to the office. They have had a fairly rough ride losing either buyers or sellers several times through no fault of theirs.
 Having just lost their most recent buyer they are keen to sell but cannot afford to take an offer below the price previously achieved. You see, despite what most agents are telling prospective vendors, the market is not as good as it was. Prices achieved are still strong but they are not rising and listening to an over confident estate agent will not get you a sale on your home. Insist that an agent provides you with clear evidence for the price they put forward, at least then you can make an informed decision on your marketing price. Put your property in the market for strong money if you like but a least know that is what you are doing!
 For the vendors I met on Friday to continue with their purchase whilst the property market slows down for the year end renting offers a very positive alternative.
Most vendors have experienced substantial equity growth over the last couple of years making this an affordable option. They will need to raise a deposit of at least 25% of their purchase price from their existing house equity. Then raise a mortgage on the new house using this 25% as their deposit. Additionally most landlords using this route would ensure the revised mortgage on the existing house was interest only to keep costs down. In this fashion, if the numbers work for you, rent should in many cases cover the increased cost of the mortgages. It goes without saying that you should consult a qualified financial advisor before embarking on this route...my comments are for general discussion relating to the lettings market only.
By taking this route you get to move, you become a proceedable buyer and are welcomed with open arms by your seller. You get the opportunity to sell your home at a higher price at some time in the future when the market has returned to strength. Equally if the market rises you get the benefit of an increase in the value of two homes instead of one. If prices falter a little you just retain the rented home until the situation changes, you only crystallise a loss in value if you sell.
 If the rent is covering your costs there is probably not an issue if this situation continues for some time. Many landlords that entered the market previously are still landlords today despite them seeing substantial price rises allowing them to sell for much more and the initial view that it was to be a short lived fix to their situation. Further than this with the rental market continuing to be so strong many landlords in this situation have seen the returns increase as rental prices have gone up.
So I think we are likely to see more landlords reluctantly entering the market to resolve their current fix. They will be most welcome as stock levels remain low and applicant levels remain high.
If you want to discuss this route in more detail please drop in to my office when you are passing or email me at ian@mortimersaylesbury.co.uk

If I smile really nicely can I get another treat?

Excellent one bedroom terraced house in Aylesbury, 4.6% gross return.

For those looking to start off at the lower end of prices or add to an existing portfolio this is a great property. One bedroom, terraced house in Sharp Close £194,950.

Sharp Close Aylesbury HP21 8RR

This is what the Mortimer's sales team say
 'Mortimer's are pleased to offer for sale this one bedroom property which is considered to be an ideal opportunity for first time buyers or investors.  The property benefits from lounge, kitchen, good sized bedroom, bathroom, enclosed rear garden, allocated parking for one vehicle and views of a green to the front aspect.'
If you need to discuss your requirements or are interested in this property please get in touch ian@mortimersaylesbury.co.uk

House Prices in Aylesbury rise by more than 22% in the last 18 months

Over the last month, the Aylesbury property market has seen some interesting movement in house prices, as property values in the Aylesbury Vale District Council area rose by 1.7% in the last month, to leave annual price growth at 16.9%. This compares well to the national figures where property prices across the UK saw a monthly uplift of 0.42%, meaning the annual property values across the Country are 8.3% higher. This is all despite the constraining factors of Stamp Duty changes in the Spring and more recently the impact of our friend Brexit. 

The figures for the last 18 months are 22.1% higher, again thought provoking when compared to the national average figure of 13.6% higher (figures from Land Registry). 

It gets more interesting still when we look at how the different sectors of the Aylesbury market are performing. Over the last 18 months, in the Aylesbury Vale District Council area, the best performing type of property was the semi, which outperformed the area average by 0.64% whilst the worst performing type was the apartment, which under-performed the area average by 1.61%.

Many of you are used to me bleating on to buy houses over apartments!

 

Now the difference does not sound that much, but remember two things, this is only over eighteen months and the gap of 2.2% (the difference between the semi at +0.64% and apartments at -1.61%) converts into a few thousand pounds disparity, when you consider the average price paid for a semi-detached property in Aylesbury itself over the last 12 months was £308,800 and the average price paid for an Aylesbury apartment was £170,500 over the same time frame.

 

I know all the Aylesbury landlords and homeowners will want to know how each of the property types have performed, so this is what has happened to property prices over the last 18 months in the area...

·         Overall Average          +22.1%

·         Detached                     +22.2%

·         Semi Detached            +22.9%

·         Terraced                      +22.4%

·         Apartments                 +20.2% 

 

 

 

So what does all this mean to Aylesbury homeowners and Aylesbury landlords and what does the future hold?   

When I looked at the month-by-month figures for the area, you can quite clearly see there is a tempering of the Aylesbury property market over these last few months. I have mentioned in previous articles that the number of properties on the market in Aylesbury has increased this summer, something that hasn’t happened since 2008. Greater choice for buyers means, using simple supply and demand economics, that top prices will not be achieved on every Aylesbury property. Some of that growth in Aylesbury property values throughout early 2016 may have come about because of a surge in house purchase activity as an indirect result of the increase in stamp duty on second homes from April, thus providing a temporary boost to prices.  

Much of the current pause in the market has been caused by agents and sellers pricing property too high anticipating that the rising market will continue forever. Those same agents are proving slow to react to the changing market. 

However, it may be possible the recent pattern of robust employment growth, growing real earnings and low borrowing costs will tilt the demand/supply seesaw in favour of sellers and exert upward pressure on prices once again in the quarters ahead.

As always if you are looking to buy and need sensible advice on the price you need to pay or the best achievable rent please get in touch ian@mortimersaylesbury.co.uk

 

942% - Rise in Aylesbury Property Prices since 1981

Roll the clock back 35 years to 1981, and Mrs. T was in power, we had a Royal Wedding, Britain won the Ashes and Bucks Fizz won Eurovision with ‘Making your Mind up’. Things have changed.  Homeowners and property investors say they wish they had hindsight and bought up every house in Aylesbury all those years ago, especially when you consider what has happened to Aylesbury property values, as…  

Aylesbury Property Values since 1981 have risen by 942%. 

Not bad when you consider inflation over the same time period has been 271.9%, meaning in real terms (i.e. after inflation), property values in Aylesbury are 670.1% higher.   It is no wonder people cannot afford to buy property anymore and landlords are attracted by bricks and mortar. Yet the changes to the Aylesbury Property market run much deeper than property value changes, as no one could have predicted how the property market has changed in Aylesbury over the last 30 years. 

Looking at the Local Authority data for Aylesbury Vale District Council in 1981, 28.5% of Aylesbury people lived in a Council House, whilst today its 12.9% ... a massive drop which can mostly be attributed to Maggie allowing Council tenants the right to buy their Council House.  The private rental sector since 1981 has, as one would have expected, also changed.  

Nationally they have almost doubled, however, the proportion of properties privately rented in the Aylesbury area (i.e. through a private landlord or a letting agency) may not have doubled, but they have increased, rising from 11.6% to 13.3% of property. 

So, let us consider those people who own their own home, surely that has had a massive drop?  In 1981, the proportion of people who lived in the Aylesbury Vale District Council area who owned their own home was 59.7% … and today it is … 71.6%. Not the seismic change most of us would expect. 

Homeownership in the 1980’s and 1990’s in Aylesbury did in fact rise, but as I have discussed in previous articles that was because so many Council tenants were buying their council house. Now there are hardly any Council houses for the younger generation to move into (because of the right to buy scheme) so they have no choice but to privately rent. 

 

This is why the buy to let market in Aylesbury is an investment sector that will continue to grow as councils are not building council houses in their thousands each year (like they were in the 1950’s,60’s and 70’s).  The Aylesbury property market is constantly changing and buy to let for too long has been heavily dependent on house price growth, where yield has been almost forgotten.  I see the changes in tax and landlord and tenant law in a different perspective to the sooth-sayers and see it as bringing many opportunities where yield will become more important.  You might need to change your buy to let targets, your methodology to financing or even consider places other than Aylesbury in which to invest your money, but this will shine a light on investing in properties with healthier yields and create more realistic long term buy to let opportunities. 

 

The advice I give to my landlords is this; these changes will make some landlords panic, meaning competition for good Aylesbury buy to let bargains will reduce. These opportunities will provide a more stable platform for knowledgeable Aylesbury buy to let landlords to thrive in.  If you want to discuss the Aylesbury Property Market, feel free to pop in for a coffee at our office for a chat.

ian@mortimersaylesbury.co.uk

 

 

Chasing flies is a serious business requiring utmost concentration.

 

Aylesbury Property Market in 2017

As the trees turn from green to hues of red and brown, the Aylesbury property market has a confident feel to it. With the underlying fundamentals of a continued lack of properties being built, a shortage of properties (both in terms of quantity and quality) coming to the market and the continued low mortgage rate environment, buyer enquiries from first time buyers and buy to let landlords is strong and motivation is even stronger, given those inexpensive lending rates and general demand caused by under supply.

Now of course, there are a few potential hurdles coming towards us in the coming months that could affect the Aylesbury (and UK) property market. Mrs. May has yet to get her teeth into Brexit negotiations and we do not know what the US Presidential elections might do to the money markets around the world, meaning that on the run up to Christmas, some savvy buyers may take advantage of the lack of certainty, but I do not believe these will have a huge impact on property values (like the 2008 Credit Crunch).

 

Property ownership, whether it is for yourself as a homeowner or buy to let landlord, is a long term investment. In fact, focusing on buy to let, a number of landlords who own property in Aylesbury have made contact with me recently asking for my thoughts on the future of the buy to let market in Aylesbury.  Well, as the Politician Edmund Burke said in the 18^th century, "Those who don't know history are destined to repeat it." … in other words, to see the future you must look into the past.

Since the Millennium, the housing market has had everything thrown at it. The recent Brexit, last year’s General Election, the near melt down of the World Economy with the Credit Crunch, The Dot Com boom and bust, the housing market crisis in 2008, the housing boom of 2001 to 2004 .. the list goes on. In fact here is a graph (courtesy of the Land Registry) of average Property values since the Millennium in the Aylesbury Vale District Council area.

 

Even though we had the Dot Com bubble burst in 2000, two years later in January 2002, property values in the Aylesbury Vale District Council area have risen from £109,700 (in Jan 2000)  to £143,700 ... and kept rising to November 2007, when they peaked at £242,400. Then we had the Credit Crunch and property prices continued to fall until May 2009, where they averaged £194,900 … but look where they are now…  £316,100. 

The point is, long term future property values are more helpful to landlord investors than the month by month headline grabbing micro movements in the property market.  Look at the graph and you will see the growth in property values is an upward trend BUT, the average darts about as each month goes by.  So don’t watch the property indexes and panic if values drop next month or the month afterwards, because even in the glory days of 2001 to 2004 and 2012 to 2014, without fail, values always dropped slightly around the festive season, but people will always need a roof over their heads, and if they cannot buy and the council are not building anymore  ... only buy to let landlords can meet that demand. 

Life can be hard sometimes.

Aylesbury landlords are being hit in the pocket with the new up and coming taxation rules and yes we might have a bumpy ride on the run up to the end of the year. Brexit or no Brexit, the trend will be a slow and steady upward momentum of property values, demand for rental properties and increasing yields in the Aylesbury property market into 2017 and beyond.

Want a second opinion on your investment plans, not sure what the future holds? Give me a call or pop in when you are passing. 01296 398555 ian@mortimersaylesbury.co.uk

One bedroom Dalesford Road, Aylesbury maisonette with 4.5% potential yield.

An excellent first floor maisonette in Dalesford Road available via the Mortimers sales team.

'This one bedroomed apartment is situated on the popular Stoke Grange development and would make an ideal first time buy or buy-to-let investment. With the benefit of being offered with no upper chain the property is ready to move in to. The accommodation includes lounge, kitchen, bathroom and a double bedroom. Outside there are communal gardens and reserved parking.'

 

This really is a good property, ready to go, likely need some new carpet in the bedroom but that is all. Should let readily at £625.00 pcm giving a gross yield of 4.5% from an asking price of £164,950. Great location for tenants and not much this side of town that is affordable at the lower one bedroom end of the market.

If you could get a little off the sale price and push the rent to £650pcm yield soon goes up to 4.75%.

 

The rental market continues to be strong, if you are just starting to build a portfolio this is a good entry level property to get you started or a good one to add to an existing portfolio.

For more information give me a call or email ian@mortimersaylesbury.co.uk