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.

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?).

729 Ashford Landlords Plan to Expand Their Buy To Let Portfolio

 

A noteworthy number of buy to let landlords in Britain plan to buy more properties over the next year notwithstanding the frustrations, challenges and seismic changes in the private rented sector. According to Aldermore, the specialist Buy To Let lender, their research shows around 41% of buy to let portfolio landlord’s objective is to increase their buy to let portfolio.

Are Ashford buy to let landlords feeling the same?

If so, if the numbers above were applied to the Ashford private rental market, what sort effect would it have on the Ashford property market as whole?

Talking to the landlords I deal with, most are feeling quite optimistic about the future of the Ashford rental market and the prospect it presents despite the media’s doom and gloom prophecies that the property market will shrink. Many of those Ashford landlords who are looking to enlarge their portfolio are doing so because they still see the Ashford rental market as a decent long-term investment opportunity.

With top-yielding Bank and Building Society Savings Accounts still only reaching 1.5% a year, the rollercoaster ride of Cryptocurrency and the volatility of the Stock Market, the simple fact is, with rental yields in Ashford far outstripping current savings rates, the short term prospect of a minor drop in property prices isn’t putting off Ashford landlords – indeed there is surely no better time to invest than when prices are depressed!

The art to buying an Ashford buy to let investment is to buy the profit on the purchase price, not the anticipation of the future sale price.

No matter what the historical economy has thrown at us, with the global meltdown in 2008-09, dotcom crash of 2000, ERM in 1992, the three-day week, oil crisis and hyperinflation in the 1970’s (the list goes on and on) … the housing market has always bounced back stronger in the long term. That’s the key point … long term. Investing in buy to let is a long-term strategy. The simple fact is, over the long term with the increasing demand for rental properties, predominantly amongst Millennials as many cannot afford to get on the property ladder, and with councils not building enough property of any kind, many youngsters are having to resort the private rental market for their accommodation needs.

So, what of the numbers involved in Ashford?

There are 816 landlords that own just one buy to let (BTL) property in Ashford and 1,777 Ashford landlords, who are portfolio landlords (i.e. they own two or more buy to let properties). Between those 1,777 Ashford portfolio BTL landlords, they own a total of 3,730 Ashford BTL properties and they can be split by size of landlord portfolio in the graph below….

ashford landlords proprtioned by buy to let portfolio size

Applying the Aldermore figures that means 729 Ashford landlords have plans to expand their BTL portfolio in the coming year or so.

However, the Aldermore Research also showed that 8% of private landlords intended to reduce the number of properties they own. They put this down to the continuing Government intervention in the housing market (as many landlords mentioned too many limitations and higher taxation) while some believed that tenants are excessively protected to the disadvantage of the landlord.

There is no repudiating that the buy to let market has recently taken a bit of a beating

Thanks to a plethora of Government regulation, new mortgage underwriting rules in 2014 and George Osborne’s tax changes. Yet there still remains an overall consciousness of optimism among the vast majority of Ashford buy to let landlords. Despite these latest changes, many landlords still view buy to let as a good investment, as long as you buy right and expand your portfolio taking into account the second rule of buy to let … assess your position on the Buy to Let ‘seesaw’ of capital growth and yield.

If you want to buy right and assess your own portfolio on the yield/capital growth seesaw … drop me a note. I don’t bite and my opinion, whether you are landlord of mine or not as the case may be, will be given freely, without obligation or cost; the choice is yours. Thank you for reading this article. To read others, please visit my Ashford Property Blog.

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#

 

 

 

My Thoughts on the Future of the Ashford Buy-To-Let Market

 

I was recently reading a report by the Home website which suggested hordes of landlords are selling their buy-to-let investments due to increasing burdens placed on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the sales market nationally jumped by 11% across the UK as a result.

Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to be registered with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster seeks to heighten standards in the Private Rented Sector.

Interestingly I was chatting with a self-managed Willesborough landlord over the festive period, who was not aware of much of the raft of other legislation that has hit the Private Rented sector recently, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will sort out this for you (as they will with the redress scheme when that is implemented).

If you are a self-managed landlord though, the consequences for getting it wrong are severe because, if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Willesborough landlord popped into my offices in the New Year, so I could check all his paperwork and ensure he was on the right side of the law going forward – and I’m pleased to offer the same to any Ashford landlord if you’d like me to cast my eye over your buy to let matters.

But what of all these extra properties being placed onto the Ashford property market? When I looked at the records the number of properties for sale in Ashford now, as opposed to a year ago, the numbers tell an interesting story …

Percentage change in Ashford property for sale 2017 v 2018

2017 v 2018 percentage change in number of Propertues for sale in Ashford

Overall, Ashford does match the national trend, with the number of properties on the market rising by 17% in the last year. It was particularly interesting to see the number of flats increase by 18% and the number of detached properties on the market rose by 20%.

However, speaking with other property professionals in town, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will come back to in my Ashford Property Market blog this Spring). You see every month for the last ten years there has always been a small number of Ashford landlords looking to release equity from their Ashford buy to let properties – as is the nature of all investments!

Nationally, the number of rental properties coming onto the market to rent fell by 16% in Q4 2017 compared to Q4 2016 –  but that isn’t because there are 16% less rented properties – it’s because tenants are tending to stay in their rental properties longer resulting in less homes coming on the market to be RE-LET.

Nevertheless, some Ashford landlords will inevitably be looking to release the equity held in their Ashford buy to let properties in 2018.

If you are one of them I suggest you speak with your letting agent first, as putting your rented property straight onto the open market will often spook the tenant to hand in their notice just days after it is listed for sale because they will be uncomfortable with the uncertainty and also fear they will become homeless! This will leave you with a vacant property, now costing you money with no rent coming in to offset any mortgage payments.

Many letting agents who specialise in portfolio management will have lists of landlords that will be pleased to buy properties with a sitting tenant.

If you have investment property in the Ashford area and are considering selling – whether one or several properties – drop me a line as I have several clients looking for new investments at the moment. Such a sale gives the peace of mind to both buyer & vendor of knowing there will be no rental void on the deal!

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