Ashford Buy to Let – Past, Present and Future

284 linkedin twitter

Investing in Ashford buy to let property has become a very different sport over the last few years.

In the glory days of the first five years of the Millennium, where we had double-digit house price growth, mortgage companies (notably Northern Rock and HBOS) desperate to get on the buy to let mortgage bandwagon with rates so low it made the belly of a snake seem high and an open willingness to give loans away with little more than a note from your Mum and with hardly any regulatory intervention… anyone could make money from investing in property – in fact it was easier to make money than falling off a log! Then we had an unexpected flourish in the property market, with a post credit-crunch jump in the property market after 2010, when all still seemed rosy in the garden.

Yet, over the past five years, the thumbscrews on the buy to let market for British (and de facto) Ashford investors have slowly been turned with new barriers and challenges for buy to let investors. With changes in taxation rules on mortgage relief starting to bite plus a swathe of new rules and regulations for landlords and mortgage companies, it cannot be denied some Ashford landlords are leaving the buy to let sector, whilst others are putting a pause on portfolio expansion.

With the London-centric newspapers talking about massive reductions in house prices (mainly in Prime London – not little old Ashford) together with the red-tape that Westminster just keeps adding to the burden on landlords’ profit, it’s no wonder all appears to be doom and gloom for Ashford landlords … or is it?

One shouldn’t always believe what one reads in the newspaper. It’s true, investing in the Ashford buy to let property market has become a different ballgame in the last five years thanks to all the changes and a few are indeed panicking and selling up.

Ashford landlords can no longer presume to buy a property, sit on it and automatically make a profit

Ashford landlords need to see their buy to let investments in these times in a slightly different light. Before landlords kill their fatted calves (sell up) because values are not growing wildly beyond expectations, let’s not forget that a property also produce income in the form of rent. The focus on Ashford buy to let property in these times should be on maximising rent and not simply being preoccupied with house price growth.

Rents in Ashford’s private rental sector increased by 0.19% in the past 12 months

Rents in Ashford since 2008 have not kept up with inflation, it is cheaper today in REAL TERMS than it was 11 years ago and landlords are beginning to realise that fact with our help:

image001

Looking at the last few years, it can be seen that there is still scope to increase rents to maximise your investment (and landlords are catching on) yet still protect your tenants by keeping the rents below those ‘real spending power terms’ of the 2008 levels.

Buy to let must be seen as a medium to long-term investment….

Rents in Ashford are 4.29% higher than they were 3 years ago, and property values are 20.93% higher than Jan 2016

…and for the long term, even with the barriers and challenges that the Government is putting in your way – the future couldn’t be brighter – if you know what you are doing.

Investment is the key word here… In the old days, anything with a front door and a roof made money – yet now it doesn’t. Tenants will pay top rent for the right property in the right condition.

Do you know where the hot spots are in Ashford, whether demand is greater for 2 beds or 3 beds in Ashford? Whether town centre terraced houses offer better ROI than suburban semis? With all the recent regulation changes many Ashford landlords are employing us to guide them by not only managing their properties – taking on the worries of maintenance, the care of property and managing any wayward tenants’ behaviour – but also advising on the future of their portfolio. We can offer specialist support (with ourselves or selected partners) on the future direction your portfolio needs to meet your investment goals, (judging needs between long term capital growth and regular income), specialist finance, and whether you would benefit from transferring your property empire within a limited company structure.

If you know someone who is an Ashford buy to let landlord, do them a favour and share this article with them – it could save them a lot of worry, heartache, money and time.

Ashford Buy To Let Annual Returns Hit 13.91% in Last 10 Years

Ashford Buy To Let Annual
Returns Hit 13.91% in Last 10 Years

Many Ashford people ponder where to invest their hard-earnt savings and the best piece of advice I can give you is to do your homework and speak to lots of people as much depends on your attitude to risk versus reward. Normally, the lower the risk, the lower the reward whilst a higher risk is normally associated with the possibility of higher returns, although nothing is guaranteed. At the same time, higher risk also means higher possible losses on your investment – yet if one looks at the bigger picture, the biggest threat to investing, predominantly when the investment is made in the short term, isn’t risk but volatility.

So where should you invest? Building society, the stock market, gold or property are all options. This article isn’t designed to give you advice – just to illustrate how different investments have performed over the last decade.

Let me start with the humble semi-detached house in Ashford … which in 2009 was worth £178,400 … so assuming I bought a property for that figure, I then looked at what if I had simply left the same amount of money in a building society, or invested into gold or the stock market…

Putting your money into the stock market (FTSE100) would have given a return of 30.2% on your capital over those 10 years and an average of 3.79% a year in dividends (making an overall increase of 74%).

Gold doesn’t pay interest or dividends – but has increased in value by 26.9% over the same 10 years whilst by leaving your money in the building society, the money hasn’t increased in value, but would have earned you interest of 24.46% or the equivalent of 2.21% per year.

Investing in an average semi-detached house in Ashford over the last 10 years has seen the capital increase by 60% (an equivalent of 4.81% per annum) and the income (i.e. the rent) has provided a return, based on the original purchase price, of 138.96% or the annual equivalent of 9.1% … meaning the overall return, based on the original purchase price of an average semi-detached property in Ashford, is 13.91% per annum.

Don’t forget, though, the great appeal of Buy to Let, in addition to the tangibility of bricks and mortar,  is the ability to leverage your capital – achieving those BTL returns may only have required £45,000 of a landlord’s own money – the balance financed via a mortgage at, historically, an incredibly favourable interest rate!

Notwithstanding No.11 Downing Street’s grab at buy to let landlord’s profits by hitting the buy to let sector with several fiscal punishments: a 3% stamp duty level, a decrease in high rate tax relief for landlords and an increase in rate of CGT on residential property profits, the facts remain that ‘bricks and mortar’ is still one of the pre-eminent and most consistent investments available.

The bottom line is, Buy to Let investment remains a mainstay of the British property market, serving to support aspiring homeowners as they work to conquer the, sometimes difficult, financial hurdles of home ownership.

With Central Government over the last 30 years only paying lip service to address the lack of new homes being built or tackling affordability on any significant scale, it is highly probable this will continue for the next 5, 10 or even 50 years as there will always be a call for respectable, and above all, honest buy to let landlords to deliver decent housing to those that need it.

Are You Looking for a Ready Made BTL Investment in Ashford?

 

With supply and demand now swinging into buyers’ favour I am starting to see a few buying opportunities for investors in the Ashford area.

Newly listed with Connells at £265,000, this  3 bed Ashford townhouse would achieve a  gross yield of 4.5%+ at an estimated £1000 to 1025pcm rental.

With a great location on Ashford’s Repton Park development, the property looks ready for let immediately upon completion with no major work required.

The full Rightmove listing can be found at http://www.rightmove.co.uk/property-for-sale/property-63376987.html

If you would like to discuss the potential of this or any other Ashford property you may be considering as a BTL investment, I would be pleased to help – you can email me at robert@taylorslettings.co.uk or by telephone on 01233 663266.

£352,858 – The Typical Profit for Each Ashford Landlord Over The Next 25 Years

 

I am firmly of the opinion that buy to let investment in Ashford, over the long-term, will produce substantial returns for landlords, irrespective of recent regulation and tax changes.

Taking a very conservative (with a small ‘c’) view, I believe landlords will typically see a projected net profit of £599,080 per property over the next 25 years through capital gains and rental. With inflation taken into account that works out at £352,858 in today’s money or around £14,114 per year. The breakdown applies to a basic tax-paying landlord placing a typical  25% deposit on a £227,700 terraced property.

Capital gains make up a substantial part of a landlord’s returns. Again, being conservative, I have assumed that Ashford house prices over the next quarter century (between 2018 and 2043) will rise at half the rate they did between 1993 and 2018 (the preceding 25 years), therefore the example Ashford property in the previous paragraph would grow in value to £693,460, providing gross capital gains of £465,760.

A typical Ashford landlord receives, on average, rent of £10,740 per annum per terraced/town house property and so, over a 25-year period, that example property would generate a total rental income of £410,537 (again – very conservatively assuming a compound annual growth rate in the rent of 1.71% per annum).

Nevertheless, there are costs to running a buy to let property (mortgages, void periods, repairs, agent’s fees etc) .. and over those same 25 years, I have estimated that to be £277,217 – thus giving the net profit levels mentioned above.

£352,858 Typical Profit for Each Ashford Landlord Over The Next 25 Years

Now of course I have had to make assumptions to reach these figures yet, I hope you would agree, I have been quite unadventurous with my assumptions.

The Ashford (and UK as a whole) buy to let property market is experiencing a massive sea of change. Regulation and tax changes have altered the dynamic in the property market, diminishing its appeal to inexperienced and amateur landlords, and these new tax changes mean higher tax bills for higher rate tax landlords. Yet, despite these rising costs, there are still very healthy returns to be found in Ashford buy to let investment for knowledgeable and steadfast landlords. Nonetheless, the days of anything making money and idle speculation are long gone.

Buy to let is a long-term business undertaking, necessitating commitment and expertise. Don’t put your head in the sand and think it doesn’t affect you. Ashford buy to let landlords must be equipped to start business and tax planning, take portfolio management advice to ensure their investments will meet their investment goals, appreciate the risks as well as the rewards, and, most crucially, the obligations landlords have towards their tenants.

If you are an Ashford landlord, irrespective of whether you are a client of mine or of another agent in Ashford (or even you do it yourself), feel free to drop me a line or pop into the office for an informal chat on the future direction of the Ashford rental market and where opportunities may lie.

Ashford Requires Additional 1,948 Rented Homes by 2027

 

I have been doing some research, looking at both National and Regional reports on the supply and demand of property and people together with future projections on the economy, population and family demographics with some interesting results. According to the Office of National Statistics, in the last financial year nationally, private renting grew by 74,000 households, whilst the owner occupied dwelling stock increased by 101,000 and social housing stock (council and housing association) increased by 12,000 rented homes.

However, it was the private rental figures that caught my eye:

With eight or nine years of recovery since the Credit Crunch, economic recovery and continued low interest rates since have done little to reduce an ever-mounting need for rented housing. In fact, with house price inflation pushing prices upwards faster than wage growth, owning one’s home has felt even more out of reach for many Millennials, all at a time when the amount of council and social housing has shrunk by over 2.5% since 2003, forcing more and more households into privately rented homes.

There are 11,648 people living in 4,545 privately rented homes in Ashford

In the next nine years, looking at the future population growth statistics for the Ashford area and making careful and moderate calculations of what proportion of those extra people due to live in Ashford will rent as opposed to buy, in the next ten years, 5,005 people (adults and children combined) will require a private rented property to live in.

Therefore, the number of Private Rented homes in Ashford will need to rise by 1,948 households over the next nine years,

That’s an 216 additional Ashford properties per year that will need to be bought by Ashford landlords, for the next nine years just to meet that level of demand….

… and remember, I am being (small ‘c’) conservative  with those calculations, as demand for privately rented homes in Ashford could rise far more abruptly than I have predicted as I would question Theresa May’s policy of building 400,000 affordable homes within the current 5-year Parliamentary term as being rather optimistic, if not fanciful?

So, one has to ask wonder –  was it truly wise for the Government  to introduce a buy to let stamp duty surcharge of 3% and constrain mortgage tax relief, both of which could curtail and hold back the ability of private landlords to expand their portfolios?

Well a lot of landlords are taking on these new hurdles to buy to let and working smarter

Buy the right property at the right price and the 3% stamp duty level isn’t an issue. Incorporating your property portfolio into a Limited Company is also a way to circumnavigate the issues of mortgage tax relief (although there are different hurdles that need to be navigated on that front), but just look at the growth in the proportion of Buy to Let properties bought in the Country since the Summer of 2016 … something tells me smart Landlords are seeing these challenges as merely that … challenges which can be overcome by working smarter:

Ashford Requires Additional 1,948 Rented Homes by 2027

 

I have a steady stream of Ashford landlords asking my opinion on the future of the Ashford property market and their individual investment strategy and, whether you are a client of mine or not, if you ever want to send me an email or pop into my office to chat on how you could navigate these new Buy to Let waters … it will be great to speak with you (after all – you wouldn’t want those other landlords to have an advantage over you, would you?).

A Great 4.95% Yield Offered by this Ashford BTL Deal

 

There have been slim pickings on the market of late but I did notice this cracking Ashford opportunity overnight, listed yesterday by Ward & Partners Ashford.

In an extremely popular location with already modernised kitchen & bathroom, a conservatory giving added living space and good sized garden this property looks to just need a little decoration before being ready for let.

The rental value of £825+ would produce a healthy 4.95% yield at the £200k asking price.

The full listing can be found at http://www.rightmove.co.uk/property-for-sale/property-72504281.html

To discuss this or any other Ashford property you might be considering as an investment I would be very pleased to hear from you and will always give an honest opinion on the investment potential. Contact me, either by calling 01233 663266 or email to robert@taylorsletting.co.uk

Superb Ashford 2 Bed EOT for Buy to Let

 

Good morning, this newly listed end of terrace home could make an excellent Buy To Let property to either start your Ashford portfolio or an addition to your property empire!

With a nicely finished interior plus off -street parking and a garage this Ashford home could certainly be quickly let to a great tenant.

On sale with Andrew & Co at £235,000, the estimated £825-850 rent would give a healthy 4 to 4.25% yield which, together with Ashford’s long-term capital growth prospects, will produce a very attractive overall return on your  investment.

The full listing can be found by clicking here.

If you would like to discuss this or any other property you might be considering as an investment I would be very pleased to hear from you and will always give you my honest opinion on the investment potential. Contact me, either by calling 01233 663266 or email to robert@taylorsletting.co.uk

 

 

Extended 2 Bed Buy to Let in Ashford

 

This extended 2 bed Ashford property, located in extremely popular and very central Quantock Drive, could make a great buy to let investment.

The extended areas give a separate dining room plus a utility and downstairs WC which would make the accommodation stand out to potential tenants compared to most similar homes in the area

In general the property appears in good order and, even with the current slightly reduced rental value of £800pcm, would produce an attractive 4% yield.

Listed at £240,000 with Purple Bricks  you can find the full listing  at http://www.rightmove.co.uk/property-for-sale/property-63922864.html#

 

 

 

Ashford BTL Investment Opportunity

 

Back to work after the excesses of the Christmas holidays and I’ve just noticed this new property for sale with Stevens & Co.

At £255,000, this attractive 3 bed Ashford home should achieve a healthy 4.3% gross yield at an estimated £925pcm rental.

Set in a very popular Ashford location on Singleton Hill’s  De Montfort Park development, and with all areas looking to be in good order in the listing, particularly the kitchen and gardens, the property should be ready for let immediately upon completion.

The full Rightmove listing can be found at http://www.rightmove.co.uk/property-for-sale/property-63376987.html

If you would like to discuss the potential of this or any other Ashford property you may be considering as a BTL investment, I would be pleased to help – you can email me at robert@taylorslettings.co.uk or by telephone on 01233 663266.

 

BTL Option for First-Time Buyers to Get On Property Ladder

 

Barclays bank has extended its range of buy-to-let mortgage products to permit applications from buyers seeking to acquire their first property.

Investors will therefore no longer have to already own a residential property in order to access the finance to invest in the buy-to-let market. The move is designed to provide first-time buyers with an alternative means of getting onto the property ladder, allowing those living in areas with high property prices, such as London, to buy an investment property in more affordable parts of the country.

At present, very few lenders currently offer finance to first-time buyers on buy-to-let.

Ray Boulger, senior technical manager at Independent Mortgage Brokers, John Charcol, told the press: “It is certainly a helpful move, because it widens the opportunities for people who want to buy a property but either can’t afford to buy in the place where they want to live or perhaps don’t want to buy a place to live in because they anticipate not staying in one place long enough but want to have a stake in the property market.”

Non-owner occupiers seeking to re-mortgage an existing property have also been given access to the lender’s buy-to-let range.

A Barclays spokesperson said: “Barclays is a responsible lender and we’re always looking at ways to innovate and open up access to home buying. First-time buy-to-let will give someone who does not have a mortgage an opportunity to get onto the property ladder.”

Newly Listed Ashford BTL Opportunity

 

Newly listed with Bradley Bishop, this property’s features include 2 double bedrooms and a conservatory giving an extended living area. The property appears beautifully presented by the vendor with nothing further to spend and I would expect it to be quickly snapped up by a great tenant at an estimated £875pcm, this producing a healthy 4.8% to 5% gross yield.

Full listing details can be found at http://www.rightmove.co.uk/property-for-sale/property-62608657.html

If you would like to discuss the potential of this or any other property you may be considering as an investment, I would be pleased to help – you can email me at robert@taylorslettings.co.uk or by telephone: 01233 663266

 

 

BTL Opportunity in Central Ashford

 

I’ve noticed this end of terrace house has just been reduced to £144950 by the vendor.

The property is currently let at a modest £625pcm giving scope for a rent increase, although the current rent still gives a 5.1% gross yield at the asking price.

In a very central location and with a proven track record of attracting long term tenants, this property would be a great first investment or addition to a BTL portfolio.

Listed for sale with Gould & Harrison, the property’s full details can be found at http://www.rightmove.co.uk/property-for-sale/property-69294170.html

 

 

Taylors Residential Lettings Limited, Company no. 6002742, Regd Office: Suite 1, Invicta Business Centre, Monument Way, Ashford TN24 0HB