Only 2,333 Council Houses in Aylesbury Vale left – opportunity or problem?

The ‘Right to Buy’ scheme was a policy introduced by Maggie Thatcher in 1980 which gave secure council tenants the legal right to buy the Council home they were living in with huge discounts. The heyday of Council ‘Right To Buys’ was in the 80’s and 90’s, when 1,719,368 homes in the country were sold in this manner between October 1980 and April 1998. However, in 1997, Tony Blair reduced the discount available to tenants of council houses and the numbers of properties being bought under the Right to Buy declined.
 

So what does this mean for Aylesbury homeowners and landlords?  

Looking at the figures for our local authority, whilst the number of ‘Right to Buys’ have dwindled over the last few years to an average of only 124 ‘Right to Buy’ sales per year, one must look further back in time. Looking at the overall figures, 5,760 Council properties were bought by council tenants in the Aylesbury Vale District Council area between 1980 and 1998. Big numbers by any measure and even more important to the whole Aylesbury property market (i.e. every Aylesbury homeowner, Aylesbury landlord and even Aylesbury aspiring first time buyers) when you consider these 5,760 properties make up a colossal 11.5% of all the privately owned properties in our area (because in our local authority area, there are only 49,702 privately owned properties). 

Aylesbury first time buyers and landlords can now buy these ex-council properties second hand as those original 80’s and 90’s tenants (now homeowners) have more than passed the time of any claw back of the discount they received (council discount was repayable if the first owner sold within a stipulated time period - usually 5 years).

Yes, the modern stuff being built in Aylesbury is lovely, but some landlords purchase buy to let property solely based on where they would choose to live themselves, instead of choosing with a business head and choosing where a tenant would want to live ... because remember the first rule of buy to let property … you aren’t going to live in the property yourself. What an ex-council property may lack in kerb appeal can be more than made up for in other ways.  Tenants are often more worried about how close the property is to a particular school or family member for child care.  

Whilst ex-council properties tend to increase in value at a slower rate than more modern properties, that is made up for by the higher yields – and those built between the wars or just after are really well built. Tenant demand for such properties is good since Aylesbury property values are so expensive, a lot of people can’t get mortgages to buy, so they will reconcile themselves to renting, meaning there is a good demand for that sort of property to rent. The very fact the council were forced to sell these Aylesbury properties in the 80’s and 90’s, means that today’s younger generation who would have normally got a council house to live in themselves, now cannot as many were sold ten or twenty years ago. 

So, Aylesbury landlords - don’t dismiss ex-council houses and apartments – but remember the first rule of buy to let (as above). However, those very same Aylesbury landlords should go in with their eyes open and take lots of advice. Not all ex-council properties are the same and even though they have good demand and high yields, they can also give you other headaches and issues when it comes to the running of the rental property. One source of advice as ever is the Aylesbury Property Blog

www.theaylesburypropertyblog.blogspot.co.uk/  or call me, Ian Davies, on 01296 398555

Where did that squirrel go dad?

Has owning a home become an unattainable dream for the 919 Aylesbury 28 year olds?

My parents bought their first house in the 1960’s, they were in their early 20’s. Interestingly, looking at some research by the Post Office from a few years ago, in the 1960’s the average age people bought their first house was 23. By the early 1970s, it had reached 27, rising to 28 in the early 1980’s. 

This year alone, 919 people in Aylesbury will turn 28 and 847 in 2017 ... and 807 in 2018 ... year in year out the conveyor belt carries on ... where are the Aylesbury youngsters going to live? 

Ask an Aylesbury ‘twenty something’ and they will say they do not expect to buy until they are in their mid thirties - seven years later than the 1980’s. Some people even say they will never be able to buy a property and the newspapers have labelled them ‘Generation Rent’ as they are people born in the 1980s who have no hope of getting on the property ladder. One of the major problems facing young Aylesbury people is the large deposit needed to get a mortgage ... or is it? 

The average price paid for an apartment in Aylesbury over the last 12 months has been £158,000 meaning our first time buyer would need to save £7,900 as a deposit (as 95% mortgages have been available to first time buyers since 2010) plus a couple of thousand for solicitors and survey costs. A lot of money, but people don’t think anything today of spending a couple of thousand pounds to go on holiday; buy the latest iPhone upgrade or the latest 4K HD television. That amount could soon be saved if these ‘luxuries’ were avoided over a couple of years, but attitudes have changed. 

Official figures, from the Office for National Statistics, show the average male in Aylesbury Vale with a full-time job earns £670.80 per week whilst the average female salary is £441.20 a week, meaning, even if one of them worked part time, they would still comfortably be able to get a mortgage for an apartment. 

I was reading a report/survey commissioned by Paragon Mortgages from the autumn of last year. The thing that struck me was that when tenants were asked about their long term housing plans, some 35% of participating tenants intend to remain within the rental sector and 24% intended to buy a house in the future, with the proportion of respondents citing the “unaffordability” of housing as the reason for renting privately increasing from 69% to 74%. 

However, in the starter home category of property (i.e. apartments), nine times out of ten the mortgage payments to buy an Aylesbury property are cheaper than having to rent in Aylesbury. It is the tenant’s perception that they believe they can’t buy, so choose not to. Renting is now a choice. Tenants can upgrade to bigger and better properties and move up the property ladder quicker than their parents or grand parents (albeit they don’t own the property). Over the last decade, culturally in the UK, there has been a change in the attitude to renting so, unless that attitude changes, I expect that the private rental sector in Aylesbury (and the UK as a whole) is likely to remain a popular choice . With demand for Aylesbury rental property unlikely to slow and newly formed households continuing to choose the rental market instead of purchasing a property. I also forecast that renting will continue to offer good value for money for tenants and recommend landlords pursue professional advice and adopt a realistic approach to rental increases to ensure that they are in line with inflation and any void periods are curtailed.

Local landlords read the Aylesbury Property Blog to make sure they are able to make the most of their investments.

 

 

Nala enjoying walks in the sunshine.

 

 

Aylesbury landlords drop in to see us

As readers will be aware Saturday 19th of March was the day of our landlord drop in session. This event had been heavily promoted and offered Aylesbury landlords the chance to meet a tax advisor/accountant, a financial advisor, an inventory expert and the Mortimers team at the same time enjoying drinks and nibbles.
There was a healthy turnout and we met several new landlords and others venturing in to the market for the first time. We were able to assist new landlords with information and reassure a couple of them that moving from one agent to another was an easy thing to do, much of the paperwork would fall to us not them.
It was interesting to meet new landlords who were venturing in to the market for the first time. They were not fazed by the fullness of market prices and were not put off by the new Stamp Duty rates, understanding that these costs could be claimed back from any Capital Gains Tax bill when they sold the property. Primarily they were looking to buy for the long term and therefore these factors did not feature greatly in their thinking.
Worth sharing with you three situations in particular where we were able to assist landlords...

Landlord 1.
This landlord has just had an offer accepted on a local property. Although he lives locally he does not know the area well having moved here from London. When it comes to property he is not experienced but does want to get on to the buy to let ladder. The area he has found a property in is primarily Local Authority stock, the agent he is buying from had assured him the area was sought after and a fine location to buy a property for investment. Further the property is three bedrooms. not in great condition and he has agreed a rather full price whilst not being able to benefit from beating the Stamp Duty changes. I believe he is reconsidering his purchase.

Landlord 2.
These are experienced landlords owning two local properties and hoping to acquire a third. They use  a local agent to manage their property, have done for years, but were not aware how competitive the market has become amongst agents. If they were to switch agents to us they would save almost £1000pa just on management fees and possibly more after all the add-ons are considered.

Landlord 3.
This first time landlord is also a first time buyer. He wanted to consider buying a property via a company to potentially benefit from the different tax breaks. We were able to demonstrate that initially this would not be the right method of purchase. As a company the pool of lenders is reduced but it is reduced still further to a first time landlord. The costs of setting up and maintaining a company outweigh the costs benefits in this case.

Buying to let is not just about choosing a property that feels right, instructing the agent you buy from because you like them and sitting back. There are many aspects that can make a difference.
The advice I give to landlords can have a real impact, you can reach me by phone 01296 398555 or email ian@mortimersaylesbury.co.uk



A big thanks to our invited professionals for their help on the day

AYLESBURY LANDLORDS…THE TOM AND JANET STORY

Tom and Janet are just like you, me and many other people in Aylesbury. A hardworking couple who have strived to bring up a family and do the best with what life throws at them. They eventually reached the time in life when they could afford to make an investment in the property market.

Their aim? Well just like you and me, when they retire they do not wish to rely on the vagaries of the stock market. They have no desire to rely on a pension pot that will not be the size it was meant to be. They do not have enough capital to live off the miserly bank interest that could be accrued. They do not want to sell the family home and downsize to an area they are unfamiliar with. Their aim is to use the limited capital available to generate a monthly return and if the market is kind to them they will benefit from some capital growth through property value increases. In short they want to protect themselves financially for the future and enjoy their later years.

So in 2013 with these thoughts in mind they visited me at a Landlord Drop in Session.

They were able to discuss their financial situation, start to understand CGT (Capital Gains Tax), IHT (Inheritance Tax) and the benefits of buying a property to let as well as the most common pitfalls that face first time landlords. We discussed the most suitable locations and types or property to buy, the likely tenants for these properties and the factors that influence the monthly rent/return.

As a landlord you have a choice of chasing yield or capital growth depending on your needs. Many landlords opt for an element of each.  It is important to understand how different locations, property types and other factors effect these criteria.

After the Landlord Drop in Session Tom and Janet took a period of time to reflect upon the information they had gained and proceeded to purchase their first buy to let property in The Furlongs, Aylesbury. I was able to reassure them regarding the market, achievable rent and suitability of the property they had chosen. In late 2013 the property was readily let to a good tenant.

Having got the bit between their teeth and had the success of their first purchase, with our help and advice, another property has since been secured and subsequently let to good tenants.

Tom and Janet commented ‘Having toyed for years with the idea of buying a property to let we first met with Ian at one of Mortimers free advice sessions, and literally, it all went from there. We left feeling confident and fully informed about how to go ahead with this new venture. We have no doubt in the expertise and integrity of all members of the team, and they have made, and continue to make, the whole process very straightforward. We consider our buy to let venture a complete success, and we give the credit for this to the team at Mortimers.’

This week on Saturday 19^th March we are holding the latest Landlord Drop in Session. It is in our Temple Street office in Aylesbury 10.00am to 2.00pm. No appointment required. There will be experts on hand you can talk to if you wish, there will not be any presentations or boring stuff, no obligation to buy any product or service.

 

New landlords with property to let can get access to our experts for free and be able to take advantage of discounts on our services by attending on the day. Discounts will be valid for three months after the event so if you have yet to complete on a buy to let purchase don’t worry the discounts can still be agreed on Saturday and applied later.

 

Aylesbury’s ‘Generation Rent’ to grow by 1,118 households by 2021

Some commentators are saying buy to let is about to die, with the new stamp duty changes and how mortgage tax relief will be calculated. Some say 500,000 rental properties will flood the market nationally in the next 12 months as landlords leave the rental market. Have you heard the phrase ‘Bad news sells newspapers’? Let me explain why buy to let in Aylesbury is only going in one direction – and not the direction the papers say they are going.  

According to Sheffield University, buy to let landlords will continue fuelling the growth of the private rented sector in the coming decades. By their estimates (and they are considered a centre of excellence on the topic), the rate of homeownership nationally will fall to 50% (today it is 67% in Aylesbury) by 2032, while the rate of private sector renting will increase to 35% (interestingly, in Aylesbury it stands at 16.3% today).  

Therefore, the demand for rental accommodation in Aylesbury will grow by 964 households in the next five years ... and these are the reasons why, irrespective of the distractions set out in the newspapers.         

Aylesbury property values over the last six years have risen a lot more than average wages/salaries, meaning as homeownership and mortgage availability is dependent on your ability to pay has served to push home ownership further out of reach for many, at a time when the stock of council houses has actually withered. (Nationally, the number of council houses in the last ten years has dropped from 3.16m to 2.18m households - a drop of 31.1%).  

Now it’s true the Tory’s efforts to fix the deficiency of affordable housing have focused on those who want to buy a home, ranging from Help to Buy and their much vaunted Help to Buy Isa, and Starter Homes Scheme, an initiative offering a 20% discount for first time buyers … but if you are unable to save for the deposit ... none of this means anything to the ‘20 something’s’ of Aylesbury ... and they still need a roof over their heads!  

Currently, 11,162 people live in private rented accommodation in Aylesbury.

These are big numbers and a sizeable chunk of the electorate. So whilst it appears Aylesbury “Generation Rent” youngsters will continue to rent and to not to buy for the reasons set out above, Aylesbury buy-to-let landlords will be lifted by the projections of greater rental demand. Aylesbury and the area around it still offers the prospect of strong economic growth forecasts and has a reputation as a lively and desirable place to live. You see, with the new rules on tax, more and more landlords will be looking to move away from the previous honeypot of central London, because its higher prices meant lower rental yields. With the new tax rules and central London’s cooling of house price inflation, more and more landlords will look further afield, including Aylesbury (interestingly, I have already been chatting to a few central London landlords after they read the Aylesbury Property Blog). So, by 2021, the number of rental properties in Aylesbury will rise to 6,628

 This prediction in growth of the Aylesbury rental market is even on the back of the government clamping down on tax reliefs for landlords. The point is this, gone are the days of making guaranteed returns on BTL property. For the last 20 to 30 years, irrespective of which property you bought, making decent money on buy to let property was like shooting fish in a barrel – anyone could do it - but not now. You must take a more considered approach to your existing and future portfolio, especially in Aylesbury. The balance of capital growth and yield, especially in this low interest rate world we live in, means Aylesbury landlords need to do more homework to ensure the investment in property gives the desired returns. One place for Aylesbury landlords and homeowners to visit for such information is the Aylesbury Property Market Blog. http://theaylesburypropertyblog.blogspot.co.uk/

 

The proposed path of the HS2, all these trees will go.

9.6% rise in Aylesbury Property Values adds weight to the town’s Housing Crisis

Aylesbury’s continuing housing shortage is putting the town’s (and the Country’s) reputation as a nation of homeowners ‘under threat’, as the number of houses being built continues to be woefully inadequate in meeting the ever demanding needs of the growing population in the town.   In fact, I was talking to my neighbour the other day and the subject of the Aylesbury Property market came up in the conversation (as it always does) after the weather and politics. My neighbour said it used to be that if you went out to work and did the right thing, you would expect that relatively quickly over the course of your career you would be buying a house, you would go on holiday every year, and you would save for a pension. But now things seem to have changed? 

Back in the Autumn, George Osborne, used the Autumn Statement to double the housing budget to £2bn a year from April 2018 in an attempt to increase supply and deliver 100,000 new homes each year until 2020.  The Chancellor also introduced a series of initiatives to help get first time buyers on the housing ladder, including the contentious Help to Buy Scheme and extending Right to Buy from not just Council tenants, but to Housing Association tenants as well. 

Now that does all sound rather good, but the Country is only building 137,490 properties a year (split down 114,250 built by private builders, 21,560 built by Housing Associations and and a paltry 1,680 council houses).    If you look at the graph (courtesy of ONS), you will see nationally, the last time the country was building 230,000 houses a year was decades ago.



Information from Office of National Statisatics for Building Numbers and House price growth from Land Registry, number of properties marketed from THE HOME WEBSITE

 

How George is going to almost double house building overnight, I don’t know, because using the analogy of a greengrocers; if people want to buy more apples (i.e. houses) in a greengrocers’ shop, giving them more money (i.e. with the Help to Buy scheme) when there are not enough apples in the first place does not really help. 

Looking at the Aylesbury house building figures, in the local authority area as a whole, only 1,100 properties were built in the last 12 months, split down into 730 privately built properties and 370 housing association with not one council house being built.   This is simply not enough and the shortage of supply has meant Aylesbury property values have continued to rise, meaning they are 9.6% higher than 12 months ago, rising 0.7% in the last month alone.  

I was taught at school (all those years ago!), that it is all about supply and demand, this economics stuff.   The demand for Aylesbury property has been particularly strong for properties in the good areas of the town and that it is likely to continue this year, driven by growing demand among buyers. You see Aylesbury’s economy is quite varied, meaning activity is expected to remain relatively strong into the early Summer of 2016.

Supply? Well we have spoken about the lack of new building in the town holding things back, but there is another issue relating to supply…the number of properties on the market for sale.   The number of properties for sale last month in Aylesbury was 252, whilst 12 months ago, that figure was 389, whilst four years ago it stood at 847… a massive drop! 

With demand for Aylesbury property rising, minimal new homes being built and fewer properties coming onto the market, that can only mean one thing ... now is a good time to be a homeowner or landlord in Aylesbury.   

 

Aylesbury landlords pause for thought

I have spoken to many landlords and would be landlords so far this year, many of them regular readers of this blog. I have spent much of this week catching up with many of them and there seems to be a change in the Aylesbury market.
Some of these landlords have bought and completed already this year but are finding that the high rents indicated as achievable by the selling agents have failed to attract any tenants. Some of those landlords need to let swiftly from a financial perspective so are reducing the advertised rent...in turn for some this has made their monthly returns very marginal.
 Further the number of investors registering to buy has fallen dramatically. The chances of buying and completing before the Stamp Duty changes apply are ebbing away fast. If you buy today you need to have a proactive solicitor, a chain free property and if using finance a very good lender to stand a chance of beating the deadline.
We are again seeing some price reductions creep on to Rightmove (Rightmove indicates there have been more than 40 price reductions in the month of February, about 10% of what is available), primarily from those agents that are over ambitious with their pricing in an effort to attract new business.
So if the heat is coming out of over ambitious rental and sale prices where are prices going to go. The Brexit referendum looms large in June, elections always have a dampening effect on the property market and I expect the referendum to have a similar effect. Uncertainty is always bad news for the property market. We are all still a little uncertain of what impact the 2017 proposed tax changes are going to have...are we really going to see thousands of landlords off loading their portfolios as the media suggest? I think not or at least not locally.
The demand for good quality rental property remains and is not going to go away, but tenants like the rest of us do not have ever deepening pockets, so I think we will see rents stabilise at their current (still high) levels. However if you are needing to achieve speculative high rents for your new shiny buy to let you may want to double check your figures, in particular if you are paying a high price. Remember the rules of supply and demand. Flat sale prices have been driven up by the lack of supply of houses NOT the strong demand for flats!
As always if you are investing in property in Aylesbury seek out sound advice, many landlords discuss their purchase with me before proceeding. What is really the achievable rent? What work will I really need to do to maximise my return? Is this the right price to be paying? Will this location let readily? Whoever you turn to make sure they know the area and the lettings market.
Have a great weekend!

PS I am hosting a drop in session for landlords on Saturday 19th March 10.00am to 2.00pm at my Temple Street office. Keith Witchell of KRW Accountants will be on hand to answer tax questions along with a range of other property professionals.
 http://theaylesburypropertyblog.blogspot.co.uk/ to read further articles from my blog.

Is this the longest Husky tongue in the world?
(I know this has appeared here before but it is one of my favourite pictures!)

Inheritance - Is buying Aylesbury Property still the best place for my windfall?

I had an interesting email from someone in Aylesbury a few days ago that I want to share with you. In a nutshell, the gentleman lives in Bedgrove, he is in his mid 60’s and still working. He has a good pension, so that when he does retire in a couple of years’ time, it will give him a comfortable lifestyle. He has recently inherited £250,000. One option he told me was to put the money into a savings account. The best he could find was a 2 year bond with the Post Office which paid 1.9%; meaning he would get £4,750 in interest a year. One of his other options was to buy a property in Aylesbury to rent out and he wanted to know my thoughts on what he should buy, but he had concerns as he did not want to take a mortgage out at his time of life. He was also worried about all the tax changes he had read about in the papers for landlords. 

Notwithstanding the war on Aylesbury landlords currently being waged by George Osborne, the attraction of bricks and mortar endures for many. As our man is a cash buyer, he would not have to concern himself with the cut to mortgage interest tax relief that will diminish, or even eradicate, the profits of many Aylesbury landlords. It is true he would face the extra 3% in stamp duty to buy a second property, but with some good negotiation techniques, that could soon be mitigated.  

I told him that buying an Aylesbury buy to let property is all about the total return on investment. True, he could put the money in the Post Office bond and receive his interest of £4,750 a year or, as he rightly suggested, invest in property in Aylesbury. The average yield at the moment in Aylesbury is 3.28% per annum, meaning our potential First Time Landlord should be able to, depending on what he bought in the town, earn before costs £8,199 a year. (However, I told him there are plenty of landlords in Aylesbury earning more if he was willing to consider more specialist investment types of properties – again, if you want to know where – look at my blog or drop me an email).

 

The bottom line is that the success of investing in Aylesbury buy to let property versus a savings account with the Post Office (or whatever Bank or Building Society is offering the best rate) will depend on the performance of those assets. Unlike a savings account, with property the capital you invested can also go up (yes, it can go down as well – more of that in second). Property values in Aylesbury have risen in the last twelve months by 9.6% meaning, that if our chap had bought a year ago, not only would he have received the £8,199 in rent, but also seen an uplift of £24,000 in the value of his asset…meaning his overall return for the year would have been £32,199 (not bad when compared to the Post Office!). 

… but the doom mongers among you will say, property values can go down, as they did in 2008, and in 1988 and 1979. Yes, but after 1979 prices had bounced back to their ’79 levels by 1984 and went on to grow an additional 58% in the following four years. Then again, they dropped in 1988 and did take 13 years to reach back to those ’88 figures, but the following six years (between 2001 and 2007) they then increased by an additional 66%. Now, according to the Land Registry, average property values in Buckinghamshire currently stand 19.33% above the January 2008 level, and anecdotal evidence suggests that in the better parts of Aylesbury, we are well above these levels.  

… and what would that £250,000 buy you in Aylesbury? A smart 2 bedroom terrace close to town , a great 2 bedroom house on Fairford Leys or Watermead ... in fact, the world is your oyster. But then you need to decide what is the right property to maximize your returns. As ever the blog has articles that cover that point but for more detailed current discussion email me or pop in when you are passing.

http://theaylesburypropertyblog.blogspot.co.uk/  

NOTE

Landlord drop in session Saturday 19^th March 10.00am – 2.00pm, more details to follow

3,637 Aylesbury homes bought by private landlords in the last 20 years

I was out walking Nala the husky at the weekend in the fields that run alongside the golf course on Fairford Leys daydreaming of less muddy warmer days to come! I have only just started walking her off lead as Huskies are notoriously difficult to train to come back and she had approached a man some distance in front with his dog. Once I had caught them up I realized I knew the other dog owner from my days as a publican locally. Many years since we had bumped in to each other but we used to enjoy telling each other tall stories and sharing a pint or two. I did not realise but he is a regular reader of this blog so it was not long before we were discussing property and the current market. 

He wanted to know my thoughts particularly on the future of the Aylesbury property market. He was of the opinion that the Buy To Let market was becoming saturated and that tenants were going to be spoilt for choice. But people are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the town have a choice of what type of roof they have ... they can rent from the Council, they can rent from a private landlord, they can live with mum and dad or finally they can get a mortgage and buy a property. In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting an inexpensive two up two down, then buy your first house. However, more recently fewer Aylesbury youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering ... and I want to share them with you. 

Roll the clock back 20 years and Aylesbury was a very different place. There were 23,261 households in Aylesbury and 15,581 of those were owner occupied. Move to the present, and with all the building in the town, the total number of households has increased by 24.1% to 28,877 and quite surprising, the number of owner-occupiers has increased to 19,022 (although as a proportion, it is only 65.8% compared to 66.9% twenty years ago).

However, it is the rented sector that is truly fascinating … twenty years ago, only 1,064 properties were privately rented in Aylesbury ... and now its 4,701, a rise of 3,637. 

The twentysomethings of Aylesbury have not been helped by the local authority selling off council housing, with the number of council houses dropping from 5,030 to 1,254 over the same twenty-year period. Demand for good quality rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to higher rate tax paying landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Aylesbury and those who treat it as a business will survive and prosper. 

The best way Aylesbury landlords can protect their income from property, (and mitigate the affects of the tax rises) is to keep the homes they let out in good condition. I have found, especially over the last three or four years, that Aylesbury tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet those high expectations. You must not forget, letting property in Aylesbury (in fact anywhere) is a business, so all landlords should seek the advice, opinion and commentary of property professionals. I have spoken to several landlords recently persuaded to purchase property on the basis of inflated rental figures or outlandish expectations of capital growth. Do your research carefully, understand the location you are buying in and make sure that what you buy suits your portfolio requirements.

When researching you could do worse than look for more in-depth articles on the Aylesbury Property Market blog, which has a library of similar articles to this. Alternatively you could give me a call 01296 398555, drop in to my Temple Street office or email me ian@mortimersaylesbury.co.uk  

 

 

Just chilling in my favourite spot.

Private Renting in Aylesbury increases by 484.23% in 20 years

What is the future for investing in property to let in Aylesbury? The truth is that many investors have become lethargic, with many having mistaken the ever rising Aylesbury (and in fact the whole of the UK) property market since the 1960’s as the eternal gift that keeps giving as property prices constantly rise and double every five to seven years. The days of making money from property as easy as falling off a log, are over . 

Whilst our dear friend George Osborne has decided now is the time to milk UK’s private landlords, with changes in taxation for buy to let property, many pundits are predicting the end of buy to let as we know it. However, it is still possible to make a reasonable, profitable and safe return on property when these changes commence. I have always seen investing in the Aylesbury buy to let market (as I would anywhere in the UK), as I might see Mother Nature, creating some truly wonderful stunning warm weather but at the same time, she will bite, creating catastrophic situations such as snowstorms and hurricanes.  You need to study the market, take advice and opinions from many people and then decide what the property weather will be … remember, tenants will always want a roof over their head and I don’t see the Government building the millions of houses required to house them.

 

Nobody knows the future, and yes people can predict but I would not be afraid of this change... because as a famous French proverb says, ‘the more things change, the more they stay the same’.  No one could have predicted how the property market has changed in Aylesbury over the last couple of decades? Looking specifically at the Aylesbury Parliamentary Constituency, twenty years ago, 27,875 households (meaning 69% of property) was owned and only 1,049 households were privately rented (meaning 2.6% of property was rented out by private landlords). Roll the clocks on twenty years and the change has been substantial … Now 29,915 of properties in the Constituency are home-owners (69.15% being owner occupied) but the jump in private renting has been out of this world, as 6,538 properties are now privately rented (proportionally 15.19%). Neighboring Constituencies show similar changes as well. 

Who would have predicted in 1995 that the private rental sector in Aylesbury would have grown by 484.23% in the proceeding 20 years?

 

Also, if you had asked someone in 1995 to predict what would happen to property values over the proceeding 20 years (i.e. between 1995 and 2015), they might have predicted similar growth to the growth experienced over the previous 20 years (i.e. between 1975 and 1995), which was a very impressive 351.55%. Yes, property values in Aylesbury have increased over the last 20 years (between 1995 and 2015), but by a more modest 267.39% (and most of that can be attributed to house price growth between 2000 and 2006.)

The property market is constantly changing and buy to let has often been heavily dependent solely on house price growth, where yield has taken a back seat.  I see the changes in tax and landlord/tenant law in a different perspective to the doom-mongers and see it as bringing many opportunities. You might need to change your buy to let outlook, your approach to financing, but this will shine a light on investing in properties with healthier yields and create realistic long term buy to let opportunities, instead of short term growth bets and wagers.

The advice I give to my landlords… these changes will make some landlords panic, meaning competition for attractive Aylesbury buy to let bargains will reduce as fear of change kicks in and uninformed investors flee the market. These opportunities will provide a more stable platform for knowledgeable Aylesbury buy to let landlords to thrive in.

 

 If you want to learn more about the Aylesbury Property Market pop in to my office in Temple Street for a coffee and a chat or failing that, visit the Aylesbury Property Blog, where you will find many more articles like this ...solely on the topic of the Property Market in Aylesbury  http://theaylesburypropertyblog.blogspot.co.uk/

 

 

Sunny afternoon walks on Fairford Leys

Aylesbury Buy to Let sees returns of 13.03% in 2015

As the New Year celebrations fade as a distant memory and we all struggle to stay on track with those resolutions made it is  frightening to realise that we are already well in to February. Scary! At the weekend I met up with an old school friend I had not seen for 30 years. We both still live in Aylesbury but our paths have not crossed until recently. Turns out he has built a small property portfolio locally and is considering another purchase so it was not long before we found ourselves discussing the local market. His goals are similar to myself and most of my landlords…enhance retirement income, hope to have a strong enough portfolio to help the children get on the ladder when the time comes and see a small monthly return in the meantime.

 Before I could advise him, I reminded him that the most important thing when considering investing in property is finding Aylesbury property with good rental yields for income return, yet at the same time, it must have the potential for capital growth from rising house prices over time. Going further into 2016, Aylesbury landlords will be under more pressure to find the best combination of yields and capital growth, as extra stamp duty charges for buying properties and a squeeze on mortgage interest relief will raise their costs.

Before we look at yield and capital growth, one important consideration that landlords tend to overlook, is the possibility of future rent increases. Interestingly, the average rent of an Aylesbury property currently stands at £919 per month, which is a rise of 6.0% compared to twelve months ago (although it must be noted this rise in rents is for new tenancies and not existing tenants).

Anyway, back to yield and capital growth, the average value of an Aylesbury property currently stands at £305,100, meaning the average yield stands at 3.15% per annum, which on the face of it, many landlords would find disappointing.  That is the problem with averages. If I were to look at say 2 bed houses in Aylesbury which are the sort of properties a lot of landlords buy, in Aylesbury, the average value of a 2 bed house is £239,700. The average rent for a 2 bed house is £865 per month, giving a yield of 4.33%. However, if that is not high enough for you, there are landlords in Aylesbury who own some specialist properties with specialist tenancies, that are achieving nearly double that yield – again it comes down to your attitude to risk and reward (give me a tinkle if you wanted a chat about those sorts of properties – although they can be fun and games!).

Ultimately most investors want to be making gains from both rent and house price growth. When combined, the rental yield and capital growth gives you the return on investment, and that is what I told my old school friend. Return on investment is everything (ROI). Property values in Aylesbury have risen in the last year by 8.7% …. which means the current annual ROI in Aylesbury for a typical 2 bed house is 13.03% a year .... not bad.

Whether you are a soon to be new landlord or existing seasoned landlord in Aylesbury, you might be interested in a blog about the Aylesbury Property market, where you will find similar articles to this one about what is happening in the Aylesbury Property market http://theaylesburypropertyblog.blogspot.co.uk/

See, I can be well behaved!

I will soon be running a drop in clinic for landlords giving you access to a wide range of property advice from accountants and other property professionals and exclusive packages, details to appear here on the blog soon. Held at our office space will be limited.