Will There be a ‘Boris Bounce’ for the Ashford Property Market?

Boris Bounce

The Halifax announced in early January of a Boris Bounce in the national property market as they stated national property values soared 1.7% in December 2019 – the biggest rise since the 1.9% month on month rise in February 2007 (a few months before the Global Financial Crisis aka the Credit Crunch).

Get the flags out – all hail Boris as the Conservatives gain their landslide general election triumph – the Boris Bounce is here … or is it?

The Halifax (as well as the Land Registry and other house price indices) use the data of property that has sold and completed. The Halifax data was based on properties that completed in December 2019, and as anyone who has sold or bought an Ashford property in the last 10 years knows, the time it takes from agreeing a buying price to handing over the money is many weeks. In fact, the average length of time between sale agreed and completion in the country is running at 19 weeks, meaning the figures mentioned by the Halifax are for sales agreed in July and August 2019. This growth relates to what was happening to the property market in Summer 2019.

One of the most important things for the property market is confidence. Interestingly, Rightmove reported a 28% surge in buyer enquiries between the 13th and 18th December. After a couple of years of Parliamentary hold-up, the confidence following this general election is unquestionably a much needed boost for the economy (and ultimately confidence), so much so, shares in the new homes builders Barratt jumped 14% and Persimmon 12% the day after the election, showing a property sector anticipation that the property market is about to move forward as suppressed demand for people moving home is liberated.

Looking at previous elections, I decided to look at what happened to property values in Ashford in the 12 months after each election, with some interesting results:

Capture

So, with past experience, a general election generally has a good effect rather than a worse effect on the Ashford property market.

Looking at the rest of 2020, my intuition tells me in the better areas of Ashford, it will likely be a seller’s market, as they will have more influence to ask for higher asking prices from Ashford property buyers that have placed plans to move on hold for far too long – and this could push up Ashford property values more promptly in the short term.

Yet, as more Ashford properties come on to the market in the usual spring rush, we could see Ashford home buyers having more choice and thus, as supply increases with demand remaining the same, buyers will get more power to negotiate a better deal. Irrespective of that, there is still the all-encompassing issue that I have spoken about many times in my blog of not enough homes being built to keep up with the number required, meaning negotiating power and prices being inflated.

The bottom line is, the Ashford housing market will get a slight boost from the general election. The threat of a Jeremy Corbyn government obstructed some Ashford landlords to build or extend their buy to let portfolio in the latter parts of 2019, so as long as sellers remain realistic with their pricing and present their properties in the best light, 2020 in the Ashford property market should be a year of ‘steady as she goes’.

P.S .One final thought – remember what I said about the Halifax price Index being 5 to 6 months behind the times – don’t be alarmed when they announce in the Spring a reduction in property values – like I said before – this will be the prices achieved in the latter parts of 2019 – not what is happening right now.

 

 

 

Ashford Property Values 0.9% Higher Year-on-Year

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It seems that quite a few Ashford homeowners and Ashford landlords have now become acclimatised to living with the uncertainty of Brexit. Throughout most of 2019,  figures show many of them decided to get on with living life, started reinvesting money into Ashford property and buying and selling their Ashford homes and BTL investments. Land Registry stats confirm this.

Current data shows that…

Ashford property values are 0.9% higher than 12 months ago

Whilst the newspapers were stating prime central London property values were now 17% below the levels being achieved a couple of years, that message seems not to have been heard by certain sectors of the Ashford property market!

Speaking with other property professionals in Ashford, many weren’t expecting the usual autumn rebound after the summer holidays with many anticipating a dormant Ashford property market on the run up to Christmas believing many Ashford home-movers would put off the their home moving activities until the new year, yet in many sectors of the local property market, I have seen (and the stats back this up) that those Ashford property buyers who are able to hold their nerve (whereas others were hesitant) have found themselves in a better negotiating position to get a great property deal. Putting aside the fluff of newspaper headlines, the real foundations of Ashford housing market remain sound with record low unemployment, ultra-low interest rates and low inflation.

Interestingly, there are 20% more homes for sale in Ashford compared to two years ago, meaning more choice for buyers.

However, there are still parts of the Ashford property market that remain stagnant, with some homeowners being slightly unrealistic with their marketing pricing. To them, the property market appears to be slow, as they stare at their ‘for sale’ board for months on end, yet nothing could be further from the truth.

The key to a balanced (and healthy) property market is realistic pricing by  homeowners when they place the property on the market, mortgage affordability for buyers (which was discussed a couple of weeks ago in the Blog) and buy to let landlord activity which creates and maintains forward momentum. One measure of momentum is how long a property remains on the market, and interestingly…

The current average length of time an Ashford property remains on the market is 81 days, up slightly from 59 days two years ago

Now the number of properties that have been sold locally is slightly down year on year (even though we had a burst of property sales in the summer locally) and interestingly, Rightmove reported recently that nationally, the number of properties sold  in the UK was only just over 3% less year on year, so a similar picture nationally.

So, what does all this mean for Ashford’s homeowners and landlords?

We have always had issues that appear at the time to be game changers for the housing market; for the last few years it’s been Brexit, 10 years ago the credit crunch, 18 years ago the dot-com crash, the ERM and 15% interest rates issue 27 years ago, dual MIRAS 32 years ago, hyper-inflation 40 years ago, the 3 day week 45 years ago – the list goes on and on –  Everyone needs a home to live in and the local authority just has not got the money to build council houses, so buy to let will continue to grow for the foreseeable future which in turn creates a stable foundation for all homeowners.

Maybe you should use this time, like many in Ashford to take advantage of the property deals to be had locally…

Ashford Property Market Update – Summer 2019

The foundations of the Ashford Property Market over the summer have continued to be principally sound – yet the existing political climate means that critical element of consumer confidence has reduced which is perhaps triggering some potential Ashford property buyers and sellers to falter slightly and hang fire on making any firm decisions on property.

With record low interest rates at 0.75%, unemployment rates of just 3.8%, and decent mortgage availability (even those with low deposits – there were 224 mortgage deals available on the day of writing this article where only a 5% deposit was required and 5 main stream lenders that would offer 100% no deposit mortgages), Ashford buyers have a lot going in their favour, aside from the perceived political uncertainty. 

Interestingly, Rightmove have stated there are more properties
for sale today in the Country, than at any time since 2016, and Ashford follows
that trend. Even with that in mind, property values have remained reasonably
stable as The Land Registry has just released its House Price
Index for Ashford and the surrounding locality and it makes very interesting
reading.

Overall, property values in the Ashford area are 2.3% higher than a year ago as the average property value in Ashford now stands at £337,400.

When I looked at the types of Ashford properties, though, a slightly different picture appeared ..

  • Ashford Detached homes rose by 2.7%
  • Ashford Semi-detached homes rose
    by 2.9%
  • Ashford Terraced/Town-House rose
    by 2.3%
  • Ashford Flats/Apartments rose by
    0.3%

and average Ashford prices for the types of property ..

  • Ashford Detached £503,000
  • Ashford Semi-Detached £288,800
  • Ashford Terraced/Town-House £240,900
  • Ashford Flats/Apartments £163,000

Yet, Ashford Property News readers will know I
always like to measure the health of the Ashford property market not only by
house prices but transaction levels as well ..

1,520 properties were sold in the last year in Ashford, lower than the 10-year average of 1,809 properties per annum

Considering the uncertainty
the Country has been through in the last three years with the ‘B -word’ issue,
I don’t think that’s too bad and shows the underlying resilience of the Ashford
property market.

Now looking forward towards the end of the year: how will Ashford property values change under a new Prime Minister?

Ashford buy-to-let landlords and Ashford first-time
buyers seem to be sustaining their activity levels, which is heartening news. It’s
quite conceivable that both cohorts are presently profiting from the marginally
increased numbers of Ashford homes on the market, which not only offers them greater
choice, but aids with their negotiations. The suggested Stamp Duty changes have
made me look at previous Stamp Duty changes in the last decade to find their
effects have been rather short term.

That means those selling homes in Ashford need to be realistic on pricing, and, as most sellers also buy a property, what you might lose on your sale you will doubtless make up on the purchase. 

For landlords, of course, the present situation should be looked upon as a buying opportunity – particularly if the market does take a downturn (when there’s blood in the streets…)

BoJo, Brexit … to be honest these are all short-term minor distractions from the real long-term issues of the UK and Ashford property market.

Until we start building at least 300,000 properties a year to meet the demand for UK property, demand will continue to outstrip supply, meaning irrespective of short-term fluctuations that may (or may not) be caused by domestic and world events (including the B-word), prices will, over the medium to long term, remain stable and increase.

Unemployment – the Secret Driver of the Ashford Property Market?

If you have been reading my articles on the Ashford property market recently, you will see that in the three years since the Brexit referendum we have shown there has been little or no effect on the Ashford property market (or the UK as a whole).

So one might ask, what does affect the property market locally? Well many things on the demand side include wages, job security, interest rates, availability of mortgages, confidence in the economy, inflation, speculative demand … the list goes on. Yet as my blog readers will note, I like to delve deeper into the numbers and I have found an interesting correlation between unemployment and the number of properties sold (i.e. transactions).

Why transaction levels and not house prices? Well just looking at Ashford house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying – meaning to judge the health of a property market is very one dimensional.

Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners – a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

Looking at Ashford’s figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels:

Property transactions in Ashford dropped by 42.37%, whilst unemployment in Ashford rose by 53.55% during the 2007 to 2009 Global Financial Crash
There is clearly a relationship between conditions in the Ashford job market and the number of people who move home … interesting don’t you think?

Now I am not saying unemployment is the only factor influencing the Ashford property – but it has to be said there is a link.

As a country (and indeed here in Ashford) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of a religion in following house prices (and I appreciate the irony writing these articles on Ashford may be feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Ashford home. Now of course, I am not dismissing the current levels of Ashford house prices – we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically underperformed.

So the next time you are considering a house move or buying a buy to let property in Ashford … don’t make your judgement on house price growth alone.

Which Ashford Properties are Selling the Best?

Moving home is said to be the third most stressful life event, following a member of your family dying or getting divorced.

It is always best to keep your stress levels down by investigating and doing your homework on both the particular area of Ashford (or nearby) where you live (i.e. where you are selling) and where you want to search for your next Ashford home. Being mindful of how fast (or slow) the different aspects of the Ashford property market is moving is key – because it could save you much heartache and many thousands of pounds.

You see, if you know you are selling a property in a sluggish price range and buying in a faster moving price range in Ashford then putting your property on the market first is vital, otherwise you will always find the one you want to buy tends to sell before your property sells – there is nothing worse than pondering over a property only to find that someone else has bought it. Being primed with all the knowledge is key. On the other side of the coin, if you are selling in a fast moving market and buying in a sluggish market .. you can probably get a better deal on the one you are buying.

For buy to let landlords in Ashford, this evidence is particularly critical as purchasing a high-demand property in a well-liked area of Ashford will safeguard a surfeit of availability of tenants, as well as respectable capital growth.

Being a letting agent in Ashford, I like to keep an eye on the Ashford property market on a daily basis because it enables me to give the best advice and opinion on what to buy (or not) in Ashford for buy to let landlords. So, I thought, how could I scientifically split the Ashford housing market into sections, so I could analyse which part of the Ashford property market was doing the best (or worst).

I took the decision to fragment the Ashford property market into roughly four uniform size price bands (in terms of properties for sale). Each price band would have roughly around 25% of the property in Ashford available for sale .. then add up all the sold (stc) properties and see which sector of the Ashford property market was performing best? And these were the results:

The best performing price range in Ashford is the lower to middle market £210,000 to £260,000 where 46.5% of all property in that price range has a buyer and is sold stc.

The middle to upper end of the property market in Ashford is finding things a little tougher compared to the others. Remarkably for Ashford landlords, the lower market is doing reasonably well, but it’s not the best, so maybe there could be some property deals out there for buy to let investment? Even though the number of first time buyers in 2018 did increase over the 2017 levels, it was from a low starting point and the large majority of 20 to 30 year-olds either don’t want to, or can’t, buy their first home and the local authority has no money to build Council houses meaning an increase in demand as private landlords take up the slack – because everyone needs a roof over their head!

If you would like to pick my brains on the Ashford Property Market – pop in for a coffee or drop me a line.

What Has Happened to the Ashford Property Market Since the Last Property Market Crash?

A handful of Ashford landlords and homeowners have been asking me what might happen if we had another property crash like we did in 2008 -09?

The UK property crash in 2008/9 caused property prices in the UK to drop by an average of 18.37% over a period of 16 months

On the run up to March’s Parliamentary vote on Brexit, a number of people have asked what a no-deal Brexit could do to the property market and if there would be a crash as a result.

I have discussed in a previous article on the chances of that (slim but always a possibility) … but assuming it happens, it is my opinion the outcome of a no-deal Brexit would be no worse than the country’s 2008/9 credit crunch property crash, the late 1988 property crash, the 1974 property crash, 1951 property crash … I could go on. The British economy would bounce back from the shock of a no-deal Brexit with lower property values and a continued low interest rate environment (perhaps with a further round of Quantitative Easing) and that would mean we would see a similar bounce back as savvy buyers saw a fantastic buying opportunity.

So, let me explain the reasons I believe this…

Many said after the Brexit vote in June 2016, we were due a property crash – but we all know what happened afterwards

Initially, let’s see what would happen if we did have a crash, how quickly it would bounce back and then finally discuss how the chances of a crash are actually quite minimal.

Therefore, to start, I have initially split down the types of property in Ashford (Detached/Semi etc.) and in the red column put the average value of that Ashford property type in 2009. Next in the orange column what those average values are today in 2019:

Now, assuming we had a property crash like we did in 2008, when average property values dropped nationally by 18.37%, I applied a similar drop to the current 2019 Ashford figures (i.e. the green column) to see what would happen to property values by the middle 2020 (because the last crash only took 13/14 months).

…and finally, what would subsequently happen to those same property prices if we had a repeat of the 2009 to 2014 property market bounce back:

Of course, these are all just assumptions and we can’t factor in such things as China going pop on all its debt … yet either way, the chance of such a crash coming from internal UK factors alone would seem far slimmer than in any of the four property crashes we have experienced in the last 80 years. Why, you might ask?

The seven reasons I believe are these …

  1. The new Bank of England mortgage rules on lending 2014 to stop reckless lending that fuelled that last crash.
  2. Low inflation.
  3. Low mortgage rates (the average Brit’s fixed rate mortgage is currently 2.26% and the variable rate mortgage of 3.07%).
  4. Wage rises are forecast to continue to outgrow inflation.
  5. Unemployment figures dropping to 4% (down from 8.4% in 2011).
  6. The high percentage (67.7%) of all British mortgages being on a fixed rate.
  7. And notwithstanding the distractions of Brexit over the last few years, it cannot be denied that the British economy has slowly and steadily been heading in the right direction for a number of years, built on some decent foundations of a steady housing market (unlike the 1988 and 2008 crashes when the housing market got overheated very quickly on the run up to the crashes).

So as the circumstances are much different to the last two crashes, the chances of a crash are much slimmer. Yet if we do have a crash, for the very same 7 reasons above why the chances of a crash are unlikely, those 7 reasons would doubtless contribute to making the ensuing slump neither too long nor substantial in scale.

One final thought for the homeowners of Ashford. Most people when they move home, move up market, meaning in a decreasing market you will actually be the winner, as a 10% drop on your current home would be much smaller in £notes than a 10% drop on that bigger property … think about it!

One final thought for new and existing buy to let landlords of Ashford. Well, the questions I seem to be asked on an almost daily basis by landlords are: –
• “Should I sell my property in Ashford?”
• “Is the time right to buy another buy to let property in Ashford and if not Ashford, where?”
• “Are there any property bargains out there in Ashford to be had?”

Many of our Ashford landlords and some others who are with other Ashford agents, like to pop in for a coffee, pick up the phone or email us to discuss the Ashford property market, how Ashford compares with its closest neighbours (Folkestone, Canterbury and Maidstone), and hopefully answer the three questions above. I don’t bite, and don’t do hard sell – I’ll just give you my honest, straight-talking opinion. I look forward to hearing from you.

With 41.1% of Ashford Property on the Market Sold – Are There Any Brexit Bargains?

Bargains – well yes and no – and let me explain why:

To find a bargain you need to know the market, yet there is not just one ‘property market’ in the UK. In fact, the British property market is like a fly’s eye, it looks to be a whole but in fact it is split into lots of fragmented pieces and the same goes for the Ashford property market as that too is split into different patches… in fact it can even come down to two streets adjacent to each other, one street selling like hot cakes for top dollar whilst the next street can stick, even at comparatively lower prices (i.e. if there is a school catchment boundary or differing postcode).

According to Coutts, property values in ‘Prime London’ have dropped by 14.7% in the last 5 years … yet look closely at those stats and you’ll see Prime London is considered anything within a 1,500m radius of Kensington High Street above £4.6m – an entirely different world to the average Ashford property, which is worth just over £328,000 and has risen in value over those same 5 years by 31.0% … truly another world!

I have noticed the top end of the market above £600,000 in Ashford and the surrounding areas however is proving a little tougher to shift than a few years ago, yet this can’t all be blamed on Brexit – buyers have long been flinching at inflated asking prices and excessive stamp duty rates.

In Ashford, 27.1% of properties for sale have
reduced their asking price in the last 3 months by
an average of 5.0%

A lot less than the reductions being seen in central London. In fact, the property market in Ashford is looking reasonably good with 41.1% of properties on the market in Ashford being  shown as under offer or sold subject to contract

…Interesting when compared with the aforementioned London Prime market where only 5.86% of the properties for sale are sold… almost certainly some juicy bargains to be had there!

So, where are the bargains in Ashford? Well to start with, it’s all about knowing the local Ashford market – all about comparing and contrasting property, so to start with, check out the property web-portals such as Zoopla and Rightmove to see what’s for sale. The art here is to tick ‘include Sold STC’ in the filters .. then arrange them in price order. Then you will get a feel for roughly what similar properties are selling for. Also look at recent sales, so in Rightmove click on ‘House Prices’ on the main menu, on the proceeding drop down menu click on ‘Find Sold House prices’ and now you can type in a street, or even a street plus 0.25miles/0.5miles etc .. click on ‘List View’ and they are in date order. Zoopla has a similar function (feel free to contact me if you need a hand with that).

Then once you have found what you think is a bargain .. view it. Ask the agent why the sellers are moving. By doing your research on the seller, seeing how long it has been on the market, whether they have reduced the asking price (if you ask an agent they have to tell you and by how much) — you could cut a better deal if they are compelled to sell. Push home your advantage i.e. if you are a first-time buyer, don’t have a property to sell, chain free or cash purchaser it can all make a difference.

Looking at the numbers above, some savvy Ashford landlords and home buyers are taking advantage of the doom and gloom headlines as property owners’ expectations are probably at the lowest they have been since the Credit Crunch, especially if they are in the ‘got to sell’ instead of the ‘would like to sell’ category.

Like anything in life .. buying a property bargain comes down to putting the hard-work in, doing your homework and jumping at opportunities as they present themselves.

How Did Brexit Affect the Ashford Property Market in 2018 – and its Future for 2019?

A few weeks ago, I suggested property values in Ashford would be between 1.1% and 2.1% different by the end of the year. It might surprise some people that Brexit hasn’t had the effect on the Ashford property market that most feared at the start of 2018.

The basis of this point of view can clearly be seen in the number of property transactions (i.e. the number of property sold) that have taken place locally since 2008. The most recent property recession was the Credit Crunch years of 2008/2009/2010.

In property recessions, the headline most people look at is the average value of property. Yet, as most people that sell also go on to buy, for most home movers, if your property has gone down in value, so has the one you want to buy so you are no better or worse off. Indeed, if you are moving up market – which most people do when moving home – in a repressed market, the gap between what yours is worth and what you will buy gets smaller … meaning you will, in fact, be better off!

Yet, most property commentators, including myself, suggest (and I have mentioned this before in some of my other blog articles) a better measure of the health of the property market are the transaction numbers (i.e. the number of people selling and buying). So, I decided to look at the 2018 statistics, and compare them with the Credit Crunch years (2008 to 2010) and the boom years (2014 to 2017). The results can be seen in the table below:

How Did Brexit Affect the Ashford Property Market in 2018 – and its Future for 2019?

Then, I looked at the average quarterly figures for those chosen date range, and created this graph …

How Did Brexit Affect the Ashford Property Market in 2018 – and its Future for 2019?

In that 2008 to 2010 property Credit Crunch recession, the average number of properties sold in the Ashford area were 133 per month. Interesting when we compare that to the boom years of 2014 to 2017, when an average of 196 properties changed hands monthly … yet in the ‘supposedly’ doom laden year of 2018, an impressive average of 168 properties changed hands monthly … meaning 2018 (compared to the boom years of 2014 to 2017) saw a 14.3% drop – yet still 26.0% higher than the Credit Crunch years of 2008 to 2010.

The simple fact is, the fundamental problem of the Ashford property market is that there haven’t been enough new homes being built since the 1980’s (and I don’t say that lightly with all the new homes sites dotted around the borough). Also, the cost of buying your first home remains relatively high compared to wages and to add insult to injury, all these issues are armor-plated by the tougher mortgage rules, introduced in 2014, and the current mortgage market conditions.

It is these issues which will ultimately determine and form the rather unexciting, yet still vital, long term outlook for the Ashford (and national) housing market, as I feel the Brexit issue over the last few years has been the ‘current passing diversion’ for us to worry about. Assuming something can be sorted with Brexit, in the long term property values in Ashford will be constrained by earnings increases with long term house price rises of no more than 2.5% to 4% a year.

Fundamentally, the question I am asked by many Ashford buy to let landlords and Ashford homebuyers is … “should I wait to buy or not?”

As an Ashford homebuyer, rather than thinking of what is happening in Westminster, Brussels, Irish Backstop, China or Trump give greater consideration to your own personal circumstances – Do you want to move to get your child in ‘that’ school or do you need an extra bedroom for your third child? For lots of people, the response is a resounding ‘yes’ – and in fact, I feel many people have held back, so once we know what is finally happening with Brexit and the future of it, there could a be a release of that pent-up demand to move home as people generally just want to get on with their lives.

There is little to be lost in postponing a house purchase until there is better clarity on the situation. If not Brexit, it will something else – so just get on with your lives and start living. We got through the global financial crisis/Credit Crunch in ‘08/’09, Black Wednesday in ’92 where mortgage interest rates went from 8.5% to 15% in one day, we got through the worst stock market crash with Black Monday in ’87, hyperinflation, power shortages, petrol quadrupling in price in less than a year and a 3 day week in the ‘70’s … need I go on?

Ashford Landlords? Well, where else are you going to invest your money? Like I said earlier in the article, we aren’t building enough homes to keep up with demand … so as demand outstrips supply, house values will continue to grow. Putting the money in the building society will only get you 1% to 2% if you are lucky. In the short term though, there could be some bargains to be had from short-sighted panicking sellers and in the long term … well, the same reasons I gave to homeowners also apply to you.

Ashford House Prices up 31.0% in the last 5 Years

Over the last 5 years, we have seen some interesting subtle changes to the Ashford property market as buying patterns of landlords have changed ever so slightly.

The background to this story was the recently published set of buy-to-let (BTL) lending statistics. Roll the clock back 12 months and 6,700 BTL mortgages were granted (in the same month) for £900m, meaning the average BTL mortgage was £134,200. Looking at last month’s figures, and as one might expect with the Brexit issue overhanging the property market, the lending figures were down, yet not by the amount I originally thought. Last month, just over 6,100 new buy-to-let mortgages were granted for a total sum of £800m (meaning the average landlord mortgage was a respectable £131,100). Yet, when I looked back to the boom year of the 2014 property market, in the corresponding same month, only £1,030 million was borrowed on 8,300 buy-to-let properties (meaning the average buy-to-let mortgage was £124,100). It seems Brexit is having no effect on landlords buying habits.

Looking closer to home in Ashford, throughout 2018, I have been regularly chatting to more and more landlords, be they seasoned professional Ashford BTL landlords or FTL’s (first time landlords) and their attitude is mostly positive. Instead of reading the scare-papers (oops, sorry – newspapers), those Ashford landlords that look with their eyes, will see the Ashford property market is doing reasonably well, with medium term rents and property values rising; and , as quite obviously from the mortgage figures, landlords are still buying.

The question I get asked all the time is .. “What type of buy-to-let property should I buy? You can make money from property through both the rent (expressed as a yield when compared to the value of the property) and how the actual value of the home itself changes.

Since 2014, property values in Ashford have risen by 31.0%.

We have records of what each type of property (i.e. Detached/Semi/Terraced/Apartments) has achieved per square metre going back 20 years … and looking back over the last 5 years, these are the numbers ..

Ashford House Prices up 31% in the last 5 Years

Ashford House Prices up 31% in the last 5 Years

They all look to have similar percentage uplifts, however as you can see from the table there is in fact some variation throughout and, though only slight, this can equate to thousands of pounds in monetary terms.

Ashford House Prices up 31% in the last 5 Years

This shows that semis and terraced houses have performed the best .. although like the £/Sq.M figures, these are just averages. When investing, whilst Ashford apartments haven’t been the best performers in terms of capital growth, they do tend to generate a slightly better yield than houses, probably because several sharers can afford to pay more than a single family. But houses tend to appreciate in value more rapidly and may well be easier to sell, simply because there are fewer being built.

Now these are of course averages, but it gives you a good place to start from. The bigger picture here though is this – irrespective of what is happening in the world, be it Brexit/no Brexit, China, Trump, whatever, Ashford people still need a roof over their heads and, as a Country, we haven’t built nearly enough homes to keep up with demand since the late 1980’s. This means even if we have a short term wobble in 2019 when it comes to property values ..in the medium and longer term, demand will always outstrip supply and prices and rents will increase – because I doubt the local authority, let alone Westminster, have the billions of pounds on hand required to build the 100,000 Council houses per year nationally for the next decade to fix this issue – meaning as the population increases, the only people who can fulfil the demand for accommodation in the medium term is the private BTL landlord.

Before I go –  housing associations and local authorities have, on average, built around 26,500 houses each year since 2010. The Labour government had a lower average, building about 19,000 homes per year, yet in the 1960’s, under both party’s administrations, 180,000 council homes were built per year!

Hythe Road, Ashford…the Road Where People Move the Most

 

Many say moving home is amongst the most stressful things in life.

Moving home is like someone else (but usually you are the cause of your own devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like an Amazon delivery van, only for you to spend the next six months unpacking it all, and unable to find important items like your bank cards, ‘those’ shoes or special jewellery!

We might wish we could be instantly transported like in Star Trek: “Beam me up Scotty”. Yet the first week you move, it’s like the original 1960’s series episode when a transporter accident sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship in chaos!

Star Trek aside, when you decide to move (and long before the months of stress of living out of cardboard boxes); you first trawl the portals (Rightmove/Zoopla/On The Market) to find a new house. Out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. You will then likely arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but only minutes to spend hundreds of thousands of pounds on their next home!). Then you put your property on the market with an estate agent, find a buyer for your Ashford property, agree a price for both, then instruct solicitors. The property becomes sold ‘Subject to Euphemism’ … sorry ‘Contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, and all this time you daren’t get too attached to the property you are purchasing in case the sale falls through … phew – stressful or what??!!

Is it worth it, though? Worth the stress? The cardboard boxes? Well, many Ashford people obviously think so.

In the last 12 months, 411 families have sold and moved home in Ashford (TN24)

Yet the question I want raise is: Do people on certain streets in the TN24 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in Ashford’s  TN24 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was any correlation between price and moving). So initially, looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Hythe Road is the winner with an average of 16.39 house sales per year (since 1995) as in the graph below:

Hythe Road, Ashford the road where people move the most

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of properties on that street. As you can see, there is no obvious correlation between the average value of a property and the number of times a property gets sold on that street.

Hythe Road, Ashford the road where people move the most

However, I still felt the information perhaps wasn’t telling the whole story … some roads in Ashford have many more properties than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally sold more often than the rest of the locality.

In the next article, (and I promise not to mention Star Trek again), I will answer that question in greater depth … and the results should (as they did for me) certainly raise an eyebrow. The question is … is yours one of the top 25 Ashford most saleable streets in the TN24 postcode?

Come back to my Ashford Property News Blog for the next article to find out!

Ashford House Prices v Ashford Rents since 2006

 

The Ashford housing market is a fascinating beast and has been particularly interesting since the 2008/09 Credit Crunch and subsequent property market crash. There is currently talk of a ‘property bubble’ forming nationally with Brexit seeming to be the ‘go-to’ excuse for every issue in the Country. Saying that, looking at both what we do as an agent, and chatting with fellow property professionals in Ashford, the market has certainly changed for both buyers and sellers alike (whether Ashford buy to let landlords, Ashford first time buyers or Ashford owner occupiers looking to make the move up the Ashford property ladder).

Ashford House Values are 0.24% lower than a year ago, and the rents Ashford tenants have to pay are 1.5% higher than a year ago

When we compare little old Ashford to the national picture; national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher across the EU in the same time frame).

However, if we look further back…

Since 2006, Ashford House Values are 53.1% higher, yet the rents Ashford tenants have had to pay for their Ashford rental property are 26.4% higher

…which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Ashford tenants are 15.6% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Ashford house values (in red) in the years of 2008 and 2009 … yet as Ashford property values started to rise after the summer of 2009, see how Ashford rents dipped 6/12 months later (the yellow bars)…. Fascinating!

Ashford House Prices v Ashford Rents since 2006

So, a win for tenants and a win for homeowners, who are also happy with the increase in the value of their Ashford property.

However, maybe an even more interesting point is for the long-term Ashford buy to let landlords. The performance of Ashford rental income vs Ashford house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Ashford landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Ashford buy to let portfolio.

More and more I am sitting down with my Ashford landlords, and landlords currently with other agents, to carry out an MOT style check on their Ashford portfolio to ensure their investments will meet future needs of capital growth and income. If you don’t want to miss out on such a check-up, drop me a line – what have you got to lose? 30 minutes of your time against peace of mind….

Great(er) Expectations: Why Ashford Home Sellers are Reducing Asking Prices by an Average of £22,400

 

As we leave this memorably hot summer behind us, some interesting statistics have come to light on the Ashford Property Market which will be thought provoking for both homeowners and buy to let landlords alike.

Over the last 12 months 1,542 Ashford households have changed hands compared with the 10-year average of 1,736 households per year

Yet, for this week’s article I want to discuss the current crop of Ashford’s property sellers, the prices they are asking for their homes and the prices they are actually achieving (or not, as the case may be). It is so important for all property owners to know the real story, so they can judge for themselves where they may stand in the current Ashford housing market, thus enabling them to make suitable and informed decisions… and that is why, in my blog about the Ashford Property Market, I pride myself in telling the people of Ashford the real answers, and not just the ones they may want to hear.

The national average percentage of homes selling at or above asking price currently stands at around 10%, implying around 90% go for below asking price – but by how much? Well according to Rightmove, in the Ashford area, the average difference between the ‘FINAL asking price’ and the price agreed is 3.1% … note the highlighted word ‘FINAL’ in the last statement.

You see some Estate Agents deliberately inflate their valuations to potential vendors, because it gives them a greater chance to secure the property listing on their books, over that of a competitor. This practice is called overvaluing. Now of course, every homeowner wants to get the best possible price for their property – it is quite often their single biggest asset – and some agents, knowing this, prey on those house sellers. You might ask well, what is the issue with that?

Well, you only get one chance at the market as an exciting, newly-listed property…

Everyone has access to the internet, Rightmove and Zoopla etc, and any serious buyers will know the local market like the back of their hand. If you have a 3 bed semi that is listed on the market for the price of a 3 bed detached those buyers will ignore your home. Your Ashford property soon sticks on the market and soon becomes stale, potential buyers will keep seeing your Ashford property listed on Rightmove week after week, then doubtless start to think there is perhaps something wrong with it and dismiss it even further, until you, as the vendor are forced to reduce the asking price, possibly below it’s true value (to make it appear inexpensive) to get it away.

According to our own research, the average house buyer only views 4 or 5 houses before buying – so don’t assume viewers will come to view your over-optimistically priced (overvalued) property, thinking they will knock you down – no quite the opposite!

So how widespread is overvaluing in Ashford? The results will almost certainly surprise you:

33.5% of properties in Ashford, currently on the market, have reduced their asking price by an average of 5.1% (equating to £22,400 each)

So, be realistic and you will quickly sell at a decent price to a decent, motivated buyer. First time (most of the time) enabling you to then move on to the next chapter of your life.

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