How Long is an Average Ashford Property on the Market For?

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If you are selling or buying a property in Ashford, there are a few reasons why it may be taking some time to sell your Ashford home or to find that perfect place to call your new home. It may be taking longer than you thought to find a buyer for your home because of the current state of the property market or finding that perfect Ashford home may be taking too long because of a lack of suitable properties to buy.

So, taking everything into consideration, all of these factors invite an obvious question – how long is too long to persist in the Ashford property market?

If you are looking to sell your Ashford property, it may have become infuriating that your home has been on the market for longer than you anticipated. Perhaps the property market is purely in a position where it’s challenging to get a property sold quickly, or at the price you want to achieve for it. If you do live in an Ashford home that is towards the upper reaches of the price band, you have to be open to the idea that because it’s worth so much more than the average property in Ashford and so more than most individuals can afford, you will have to wait longer to get it sold.

Your Ashford home might be taking longer to sell because your asking price is simply too high. Even if you are prepared to take a realistic offer, if you have an unrealistic asking price your overpriced Ashford property will likely turn off potential buyers from even being inclined to book a viewing.

Looking at the market in Ashford compared to a year ago
makes very interesting reading…

image001When it comes to the average length of time on the market,

the detached, semi-detached and apartments in Ashford appear to be taking
longer to sell, yet the length of time Ashford terraced houses seem to be on
the market has dropped.

The overall average length of time an Ashford property remains on the market has risen by 13%, from 54 days a year ago to 61 days today

The question that remains is, if you are having no luck
selling should you leave your Ashford property on the market or not? This is basically
down to your personal circumstances – a big decider has to be if you are moving
up market or downsizing.

Buyers will compare your Ashford property to all the other
homes on the market using the portals such as Rightmove, On the Market and
Zoopla and even if your asking price is realistic, if your marketing
(brochures, pictures, even video walk through) isn’t top dollar, they will
dismiss your property.

Remember, the average buyer only views 4.5 properties
before they buy and on average, each buyer will only spend just over 25 minutes
viewing each home  …

The more properties that are on the market, the greater the
choice for buyers (yet more competition for house sellers), so lets look at how
many homes were for sale in Ashford now, compared to 12 months ago.

As you can see, there are some big differences between the property types in Ashford:

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As for buying an Ashford property, searching for that dream
house can take time as you have to consider the needs of your spouse, children,
schooling, etc., what you can realistically afford and whether your current
location can accommodate you until you find that perfect Ashford home.

Don’t forget that upwards of 10% of homes do not make it to the portals, so don’t just rely on the internet to let you know what is coming on the market. I often hear of disappointed buyers who missed out because another buyer registered directly with the agent, whilst they simply relied on the portals.

When it comes to buying an Ashford home, and so you do not
make any decisions you will regret later on, taking your time is always the
more practical option. The amount of money that is involved in buying a home
and all the costs connected with it means that you should not rush into buying
or selling without due consideration.

Are Ashford Builders Constructing the Wrong Type of Property?

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The British housing market has never been so newsworthy. Every other day, there is an article in the newspaper or online about impending house price drops, house price rises, building on green belt, mortgage rates up/down, first time buyer affordability and the woes of being a buy to let landlord, to mention but a few. As a nation, we have a strong national desire to be homeowners.

The English
Housing Survey stated the proportion of owner-occupied households increased
steadily from 52% in the early 1980s to 2003 when it reached its peak of 71%.
Since then, owner occupation gradually declined to 63% in 2014, yet in fact
increased to 64% in 2017 and has stayed there since.

One of the
main motives of home ownership is the prospective tax-free capital appreciation
that can be obtained. It’s no wonder the phrase ‘as safe as houses’ is popular
in the English language, as many homeowners use homeownership as a nest egg or
even a pension pot, as savings rates are at extraordinarily low levels.

Yet even
with the news that homeownership is on the rise, the biggest seismic shift to
the Ashford property market is the growth of the rental market, which has more
than doubled in the last 15/20 years. So how can the social housing sector
(Council Housing) remain roughly at the same level since the millennium,
homeownership slightly grow, yet the private rental sector be so huge? Well it
comes down to the fact that many more homes have been built in Ashford in the
last 15/20 years, and a lot of them have been bought for buy to let, or Ashford
homeowners with second hand starter homes have also sold them to buy to let
landlords and they have bought larger brand new homes.

Yet the
question we wanted to ask is … are we building the right sort of homes, especially
when it comes to the number of bedrooms? Whilst the data doesn’t exist for Ashford,
the country’s stats are available and it makes fascinating reading…

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Looking at
the graph in 2008, 59% of new homes built were one and two beds, yet last year
that had dropped to 35%.

The
Housing Minster said recently he was concerned that new homebuilders were
building the wrong types of homes in the wrong places at the wrong prices. Many
(not all) tenants are tenants because they can’t afford the deposit and as there
is a direct coloration between the rent’s landlords charge and tenant’s earnings
(i.e. as earnings go up, rents go up and vice versa), and earnings for
the last seven years have been subdued, the property tenants have been able to
afford in Ashford are the smaller one and two bed properties. Yet a lot of
these tenants are now having families (with the need for larger property with
three, even four bedrooms).

Looking at
the stats for Ashford, it can be seen the vast majority of homeowners live in
the larger properties with more bedrooms, whilst private rental tenants are in
the smaller properties (with less bedrooms).

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Our concern is – will young families and professionals be able to afford to live and work in Ashford, especially as the local authorities are unable to build council housing (Social Housing)?

One symptom of all these issues mentioned above is the massive growth in multi-family households (i.e. households containing two or more families), which have increased by 42% in under a decade. Now of course many will be because of older couples moving in with their adult children yet many are unrelated families sharing a house, something that simply should not be happening in 2019.

If we
don’t increase the supply of the ‘right’ sort of homes, what will their living
conditions be like?

Whilst we are still a country of homeowners and even though there has been a slight growth in numbers, the long term trend is downwards if we don’t build enough of the ‘right’ new homes, in the ‘right’ location and the ‘right’ price, Ashford people will continue to increasingly rent … which will only be good news for Ashford’s buy to let landlords.

The Affordability of Buying Property in Ashford

Looking back at the 75th Anniversary of the D-Day landing a few months ago, reminded me of the huge changes that have happened to Ashford, and in particular the Ashford property market, since WW2.

Back in 1946, the average wage in Ashford was just over £5 a week and to buy an average car would cost you just under £600, yet this is a property blog, so…

The average value of an Ashford property in 1946 was £1,287

In fact, over those 75 years, the average Ashford
house doubled in price by 1961, then again in 1971, 1975, 1980, 1988, 2000 and
2006. Now a lot of those increases (especially in the 1970’s) were caused by hyperinflation,
yet since the start of the 21st Century inflation has been kept low
and, since the 2008-09 Credit Crunch), whilst property values have been rising they
haven’t done so at the rates experienced in the latter half of the 20th
Century.

Now the price a property is for sale for is irrelevant, its whether someone can afford it.

Increases in Ashford property values have produced
wonderful increases in equity for many Ashford homeowners and Ashford buy to
let landlords yet, on the other side of the coin, have also made housing
unaffordable for others. The best measure of the affordability of housing is
the ratio of Ashford property values to Ashford average earnings (i.e. salary/wages).

In 1997, the average value of a Ashford
property was 3.8 times higher than the average annual wage in Ashford, in 2007
it peaked at 9.1, yet two years later it had dropped to 7.6 and since then the
ratio has slowly risen to 11 times!

It can be seen that even though property in Ashford became more affordable after the 2007/8 property crash (i.e. the ratio dropped), in subsequent years, with house values rising but earnings/salaries not keeping up, the ratio started to rise. This has meant there has been a decline in affordability of property in Ashford over the last five years – so for those on particularly low incomes or with little capital, it means that buying an Ashford home may never become an option.

Demand for private rented properties in Ashford will therefore continue to grow with many young Ashford people forced to rent instead of buy their own home (knowing, though, when their parents pass away, equity built up in their parents’ property will be passed down – and then they can buy in their 50’s and 60’s – as happens in Germany).

Yet, that is many decades away and with fewer Ashford people wanting or able to save up the 5% deposit required by mortgage lenders, more and more people are looking to rent.

Tie this in with the shift in attitudes towards renting since the Millennium and less people jumping onto the bottom rung of the property ladder, and rents and demand have been driven up in Ashford over the last few years. Yet (and it’s an important proviso) the type, location and demands of Ashford tenants has also changed over that same time frame meaning you can’t just make money from buy to let as easily as falling off a log like you could in the early 2000’s.

If you are an existing landlord with us (or even another agent in Ashford), or are thinking of becoming a first time Ashford landlord and looking for advice and opinion and what (and not) to buy in Ashford, one source of information is the Ashford Property News Blog – or drop me an email or phone call and let’s start a conversation – I don’t bite or do hard sell and maybe, just maybe, I could help you get some better returns from your property portfolio.

21.2% of all Properties Sold in Ashford are New Builds

Of the 20,600 houses and apartments sold in Ashford (TN23) since 1995, 4,630 of those have been new homes, representing 21.2% of property sold. So, I wondered how that compared to both the regional and the national picture …and from that, the pertinent question is: are we building too many new homes or not enough?

Roll the clock back a few years and in 2013 the Government expressed its disappointment that, as a country, builders weren’t building enough new homes to house the population. They promised to hasten new homes building to the fastest rate since the 1980’s when the Country was building on average 168,100 private households a year. The Housing Minister stated he wanted the private sector to build in excess of 180,000 households a year, a figure which seemed unachievable at the time. In 2013, private house building was in the depths of a post Credit Crunch dip, with just 96,550 private new homes being built that year. Yet, in the five years since then, private new-build completions have climbed steadily, rising by 59.5% to 154,100 new home completions in 2018..so on appearances alone, whilst that growth is impressive, the new homes builders still haven’t met their targets….. or have they?

In addition to the 154,100 new homes completions in 2018, the private sector also provided an additional 29,700 new households gained from change of use between office, industrial and agricultural buildings to residential homes meaning, last year, the private sector created 183,800 new households. When we look at the public sector, there were 30,300 Housing Association new homes and 2,950 Council houses built last year, meaning after making a few other minor adjustments, the total number of new households/dwellings created in the UK in 2018 was 222,190.

Most of the growth can be credited to an improving economic framework, though continued help for first time buyers with the Help to Buy Scheme has enabled some younger buyers to bypass the issue of saving for a large deposit for a mortgage when buying a home, thus supporting confidence among new home builders to commit to large building schemes. Yet there is more to do. The Government wants the country to return to the halcyon days of the 1960’s where, as a Country, we were building 300,000 additional homes a year .. and they want that to happen by 2025, a 36% increase from current levels.

In 2019, the country will create 257,500 households, so we are on our way to meeting that target but maintaining this level of house building will be a test. Even the Governments’ Auditors (the Office of Budget Responsibility) is predicting net additional dwellings will plateau at about 240,000 in the first few years of the next decade.

So, how does Ashford sit within this framework?

The UK currently has 27.2m households, of which 2.45m (9%) of those have been built since 1995, whereas in Ashford, of the 18,600 households in TN23, 4,630 were built since 1995 (representing 24.9% of all households), meaning Ashford has a higher proportion of new homes building in the last couple of decades than the national figures.

I certainly feel there is an over reliance on the private sector to meet the Country’s housing needs. Local Authority’s need to step up to the plate and build more houses, and its true central government has released more cash for them to do just that, but probably only 20% to 25% of what is required.

In the meantime, unless the Country starts to build that 300,000 households a year, property prices will retain and improve their value in the medium to long term – which is good news for Ashford’s landlords and homeowners.

Ashford Homeowners Sell Their Home 40% More Than the UK Average

The average homeowner in the UK now moves every 20.2 years.

That average in the 1970’s and 80’s was around every 10 or 11 years; in the 1990’s it increased to the mid-teens (in years) and in the early part of the Millennium, it dropped back again to the low teens. When we had the Credit Crunch years of 2008/09/10, that shot up to every 25.3 years and has been steadily decreasing ever since to the 2018 figure of 18.7 years.

The graph shows that, as the economy improved after the Credit Crunch, British homeowners started to move home more and may have be taking advantage of higher demand and lower supply in the housing market to sell their homes and move on to the next property. Yet, as most Ashford (and British) vendors are usually a buyer as well, that cannot be the real cause. As mentioned already, people in the 70’s and 80’s moved a lot more than today.

So why is the long-term average length of time between moves since 2000 still much higher than it was in the preceding 30 years? For existing homeowners, some people have said their lack of appetite to move home compared to the 1970’s and 1980’s might come down to their mortgages and the need for higher equity to put down on the next house. In general, the number of years you stay in a home determines how much you will pay back on the mortgage you took out when buying it – If you stay longer, you have the prospect to pay back a larger portion of the money you borrowed.

Instead, I think the issue is a lot deeper than that. Firstly, I believe there has been a long-term change in attitude to moving home and this lack of movers (compared to the last 30 years of the 20th Century) is part of a slowdown in the country in social mobility. Interestingly, a million fewer people moved in the noughties (2000 to 2010) than in the 1970’s, after other changes in population have been taken into consideration. You see back in the 1970’s and 80’s, it was expected that people kept moving up the ‘property ladder’ to bigger and better homes (keeping up with the Jones’).

Secondly, there has been a change in attitude to homeownership per se: over the last 15 years, 20 to 30 somethings (Generation Rent) have been weaning themselves off the ‘homeownership drug’ that the baby boomers were so addicted to in the 1970’s and 80’s … meaning there are less buyers at the bottom of the housing ladder to fuel the fire. That is an important factor on the long-term decrease in home moving as buy to let landlords have been tending to buy the smaller starter homes to house Generation Rent … yet landlords don’t tend to move up the housing ladder after a few years like a first time buyer – landlords just buy another property.

So, what is happening in Ashford with regard to people moving home?

I have mentioned a number of times in my articles about the Ashford property market that the number of people who move home (i.e. the number of property transactions) is a more important bellwether to the health of the local property market.

Therefore, I compared the number of people moving home in Ashford to the regional stats of home movers and the country as a whole. I also decided to look at a long-term point of view to judge the Ashford housing market, because as can be seen on the first graph, there is often short-term volatility. Looking at the stats…

Since 1995, Ashford people have moved home 40.79% more often than the national average

Looking at this second graph, 110.8% of the Ashford (TN23 to be precise) privately owned housing stock has been sold since 1995 – interesting when compared to the national figure of 78.7%. Why? Well I am sure this might be the topic of an up and coming further article on the Ashford Property Market Blog.

Ashford Property Market: Do We Have the Right Sort of Homes for the 21st Century?

Would it surprise you to know that in some parts of Ashford, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply?

Theoretically, in Ashford there are more than enough bedrooms for everyone – it’s just they are disproportionately spread amongst the population, with some better-off and more mature households living in large Ashford homes with many spare bedrooms, and some younger Ashford families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Ashford doesn’t have enough housing full stop otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying, but up until now it hasn’t been clear that Ashford actually also has the wrong types of properties.

We’re not building the smaller homes in Ashford that are needed as starter homes and we aren’t building enough bungalows for older generations, so they can be released from their larger Ashford homes, thus allowing those growing Ashford families to move up the ladder.

Looking at the stats for Ashford, and TN25 in particular…

When I compared Ashford (TN25) with the regional stats of the TN postcode, the area has proportionally 64.3% more detached homes, yet 77.4% less apartments. Looking nationally, Ashford (TN25) has proportionally 131.9% more detached homes and proportionally 78.1% less apartments.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Ashford over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or apartments of the larger, and more upmarket variety, even though demand for new households has tended towards lower to middle sized households.

The builders do want to build, but there’s a deficiency of building land in Ashford, and if there’s a shortage of building land, then of course new homes builders will build whatever maximises profit – the biggest and most expensive properties and certainly not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space, it’s the planning system. Green belts must be observed, but only 1.2% (yes just 1.2%) is built on in this country as a whole with homes – we need the planners to release more land (and then either force or encourage builders to build on it – not simply sit on it). Another issue is that of the smaller new homes that have been built, most have been snapped up by Buy to Let investors.

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money even to properly cut the grass verges, let alone spend billions on new homes in Ashford. The Government did relax planning laws a few years ago, for example for changing office space into residential use, yet they could do far more as, currently, developers have no incentive to build the inexpensive homes or bungalows that the system needs,

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

Changing the dynamics of the Ashford, regional and national property market to any meaningful degree will take decades, not years. The simple fact is we are all living longer, and we need 240,000 to 250,000 houses a year simply to stand still with demand, let alone start to eat into 30 years of under-building where the average has been just under 170,000 households a year.

That means, today as a country, we have a pent-up demand for 2.25m additional households and we will need to build a further 4.2m households on top of that figure for anticipated population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and will always be, a great investment as demand will always outstrip supply.

Ashford Council House Waiting List Drops by 22.1% Since 2011

In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is just 1 in 12 whilst, according to Shelter, 65% of families on the Council House waiting lists have been on those lists for more than a year and 27% for over five years.

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live? Or is that an out-dated point of view? To look at this objectively, let’s take a step back:

After WW2, both Tory and Labour governments built council houses in massive numbers, yet it might surprise you to know that between 1945 and 1970more Council houses were built per year under Tory Governments than Labour ones.

However, everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour’s Manifestos of the late 1950’s (although they then lost to the Tories). Mrs Thatcher’s idea was based on overly-generous discounts and 100% mortgages for those buying … but, and this is the real issue that has come back to bite us all these years later: Half the proceeds of the property sales went to Westminster and the other half to the local authority – but the Councils’ half could only be spent on reducing their debt – not spent on building more Council houses.. hence why we now have a shortage of council houses.

In 2011, Central Government gave local authorities the power to limit people’s entitlement for social (Council) housing, hence removing those people that did not have an association or link to the locality.

Today, in Ashford, the Council House Waiting List has dropped by 22.1% since 2011, meaning

1,129 families are waiting for a Council House in Ashford

Interestingly though, if our local Council House Waiting List had dropped by the same degree as nationally, the waiting list figure would be 885 instead because, overall in the UK, Council House waiting lists are 38.6% lower than 2011.

So where are these Ashford families living and what does this mean for Ashford homeowners and Ashford Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list. This is important as more and more tenants are stopping longer in the Private Rented Sector – the average length of time of a tenant stays in the same property is now 4 years. Renting is becoming a choice for many, as the 21st Century rolls on. So much so, that it might surprise you to know that renting a house can be more expensive than buying it with ultra-low mortgage rates and 95% loan-to value mortgages freely available.

Rents in the Rental Sector in Ashford will increase steadily during the next five to ten years. Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low. The government campaign against buy to let landlords together with increased taxation and the banning of tenant charges will act to restrict the supply of private rental property, which in turn using simple supply and demand economics, will mean rents will rise – meaning buy to let investment will continue to be an attractive investment vehicle (irrespective of the increased fees and taxation laid at the door of landlords).

..and for Ashford property owners, values will remain strong and stable over the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Ashford buyers will have to pay decent money for any property they wish to buy – especially ones in nice locations and presented well.

Interesting times still ahead for the Ashford Property Market!

7% more homes for sale in Ashford than a year ago

One of the key factors of the health of the Ashford property market is the number of properties for sale at any one time. The issue with housing is that when demand goes up, unlike with a factory producing, say chocolate bars, who can easily add a couple of hours overtime to increase their production to satisfy demand, it takes a good 18 months to two years from planning permission to someone moving into a home. I have shown at length in previous articles that we are still not building enough homes in the long term in the Ashford area.. yet for the short term, a good indicator is the number of properties for sale and how long they have been on the market.

How long a property has been on the market is important as a guide to how the property market is performing – potential buyers can always find this information on the Rightmove and Zoopla listings (if you don’t know where – drop me an email or message and I can let you know).

So, let’s have a look at what is happening in Ashford, both in terms of the number of properties for sale and how long they have been on the market compared to a year ago, then discuss what that means for the current state of play of the Ashford property market. So to start, let’s look at the number of properties for sale in Ashford compared to a year ago:

Interestingly, you can see there has been a proportional increase of 33% in semi-detached properties on the market in Ashford, yet a 4% reduction in detached property .. overall in the last year there are 7% more properties on the market in Ashford, compared to a year ago. Now, let’s look how long they have been on the market ..

Interesting to see that the only property with an increase in the number of days on the market is terraced houses, from 67 days to 102 days.. demand and supply working again. The length of time an average Ashford property has been on the market has increased by 3% in the last year.

So what does this all mean for Ashford Buy To let landlords and Ashford homeowners looking to buy and sell? Well, if you are thinking of selling, as the number of properties on the market has increased and the length of time Ashford properties are on the market has also increased – you have to be mindful that realistic pricing is the key to get the property sold. If you are a buyer, that means you find yourself in a better position to negotiate a good deal on your Ashford property purchase.

There is an argument to suggest that property buyers see excessive days on the market as an indication that the seller is becoming desperate to sell because the property hasn’t sold. Buyers are also mindful to believe that there might be something wrong with the home, a defect that caused other buyers to pass it up. This can concern them when they view the property – if they view it at all, as that possible and perhaps made-up defect is on their minds, even if it is sub-consciously.Normally, both assumptions are wrong. A property can loiter on the market for several reasons. The most common reason for a property sticking on the market is overvaluing or overpricing. In an effort to get the property on the market, some estate agents may have deluded the seller into believing the property was worth more than the property market will bear. Don’t get me wrong – if you don’t ask, you don’t get – and homeowners naturally want to get the best price for their home, and so test the market. Yet, if you aren’t getting a steady stream of viewers after a few weeks, then that testing can easily backfire. You see, by setting the asking price too high to see if they can find someone to pay that inflated price, then finding there is nobody in the market that will pay the price, here lies the biggest trap for house sellers on keeping the inflated asking prices for too long

Sellers can get stuck on an asking price and look to wait out the market until it catches up to what they want for their property – yet we aren’t in that type of property market at the moment. Consumer champion Which said that if you have to reduce your asking price by 5% or more, it adds an extra 64 days to the sales process meaning you might lose the property of your dreams.

Also, I have seen countless times, house sellers insist on an inflated asking price, reduce 12 weeks later, yet buyers think there is something wrong with it so the homeowner gets fed up and accepts a lower offer to get the property sold, whereas if the house seller had gone onto the market at the right asking price, they would get much nearer to what they deserve for their property.

So, if you are looking for a bargain to buy – all the Portals (Rightmove, Zoopla and On The Market) allow you to search and sort by the length of time on the market as well as the asking price.. who knows – there could be a bargain waiting for you!

Ashford House Prices Up 6.6% in a Year

What does that mean for local Landlords and Homeowners?

The balancing act of being an Ashford Buy To Let landlord is something many do well at. Talking to numerous Ashford landlords, they are very conscious of their tenants’ capacity to pay the rent against their own need to raise rents on their rental properties. Despite the perceived ‘dark clouds’ of Brexit, evidence suggests many landlords feel more confident than they were in the Summer and Autumn of 2018 about pushing rents higher on their Ashford Buy To Let properties.

Looking at the data for the last 7 years, this shows that throughout the Summer months, the rents new tenants have had to pay on move in have increased at a higher rate than during the colder months of Winter. This is because the Summer months are normally a time when renters like to move, meaning demand increases for rental properties yet supply remains pretty rigid.

Yet the recent winter’s stats buck that trend and this is great news.

Average rents in Ashford, for new tenants moving in, have risen 2.4% for the month, taking overall annual Ashford’s rents 2.7% higher for the year
However, several Ashford landlords have expressed their apprehension about a slowing of the housing market in Ashford although I believe, based on this new evidence, they may be overstated.

Before we get the bubbly out though, the other part of investing in property is what is happening to capital values (which will also be of interest to all the Ashford homeowners as well as the Ashford’s Buy To let landlords). I believe the Ashford property market has been trying to find some form of balance since the New Year. According to the Land Registry….

Property Values in Ashford are 6.6% higher than they were 12 months ago

Yet, these figures reflect the sales of Ashford properties that took place in the Autumn of 2018 and now are only exchanged and completed during the New Year / early Spring months of this year.

The reality is the number of properties that are on the market in Ashford today has risen by 2% since the Autumn

and that will have a dampening effect on the property market. As tenants have had less choice, buyers now have more choice – and that will temper Ashford property prices as we head into the middle of 2019.

To all the Ashford property owners that aren’t planning to sell though – this talk of price changes is only a paper profit or loss. To those that are moving .. most people that sell are buyers too, so, whilst you might not get as much for yours, the one you will want to buy won’t be as much either. Look at the deal as a whole, the difference between what you sell yours for and what you buy at.

Finally, all Ashford landlords; keep your eyes peeled – I have a feeling there may be some decent Ashford buy to let deals to be had in the coming months!

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!

Live in Ashford? About to Retire and Privately Rent? You Could be £7,700 a Year Worse Off!

Reading the personal finance pages of the newspapers all seems to be about the impending pensions crisis … where people aren’t saving enough for their retirement. But it’s not the lack of Ashford retiree’s future pension incomes that are my immediate concern. The fact is that so many future Ashford retirees over the coming decade, who never bought their own home, will have to make some very tough decisions regarding what house they live in when they retire.

In Ashford, there are 607 privately rented households, where the head of the household is between 50 and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

An Ashford retired couple, who currently privately rent and who have paid their full NI stamp over the last few decades are likely to retire with the couples’ State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Ashford is £1,171 a month – a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet…

The maximum housing benefit for a couple in Ashford is currently £531.53 per month … leaving a significant gap when you consider that average £1,171 Ashford rent per month.

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more of Ashford people retire and continue to rent from a private landlord. Numerous Ashford private renters, with little or no savings, will have to rely on Housing Benefit which will put greater pressure on the public purse.

The average Ashford retiree will need to find £7,674 pa to stay in their privately rented home after retirement.

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current 1 in 15 (6.47%) of OAP’s who currently private rent. In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Ashford homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a much smaller apartment or bungalow … and let’s be frank – they aren’t building bungalows in any numbers in Ashford anymore.

And for Ashford landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in demand for the private rental market from Ashford tenants rising substantially. Of course, many Millennials will inherit money from their home-owning parents in the coming few decades, yet a lot still won’t as it will likely be spent on nursing home care with any leftovers split between siblings.

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer.

The solution to all this is of course to build more homes.

Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when, on average, 300,000 households were built … but back to reality … that won’t happen so it looks like we are rapidly turning into a nation of renters, which is of course excellent news for Ashford’s buy to let landlords!

Ashford ‘Home Owning’ Movers and Shakers in 2018

It’s now commonly agreed amongst economists and the general public that the dramatic rise in property prices of the last six years has come to an end.
Read the National newspapers, and they talk only of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down – yet in the last 12 months, people have still been moving, buying and selling in Ashford at levels similar to the last six years – something tells me we have a case of ‘bad news sells newspapers’.

So instead, let me share with you what exactly is happening in the Ashford property market, and more specifically, who is moving and why in Ashford. The majority of sales in Ashford during the last twelve months were semi-detached properties, selling for an average price of £273,100. Terraced properties sold for an average of £226,950, with detached properties fetching approximately £390,450.

In Ashford, in the homeowner sector in 2018 (i.e. owner occupation), 643 households moved within the tenure (i.e. sold the home they owned and bought another one) and 125 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).

ashford homemovers and shakers 2018

ashford homemovers and shakers 2018

What does this mean for Ashford buy to let landlords?

Well, looking at the graph, at face value it appears bad news for landlords – There were 215 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 169 Ashford households moved to the private rented sector from owner occupation … which would appear on the face of it, to be a reduction in the private sector.My research has calculated that in 2018, an additional 312 new households in the Ashford private rented sector were created…and it will likely continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity, however, for Ashford property investors:

112 owner occupied households in Ashford sold in last year where the homeowners had passed away.

These properties can be a potential goldmine offering great returns. The reason being older generations who owned these homes for decades often spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial, lower-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because the majority of buyers can’t see beyond dated decor and the avocado or brown bathroom suite from the 1970’s, so if you were to buy and do the cosmetic works, you could be sitting on a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, the Stock Market etc… the Ashford housing market is in decent shape for the medium to long term.

If we do have a correction in values in the next 12 to 18 months, they should be viewed as a buying opportunity.

In the long term, house prices have always returned … and returned with vengeance. As I say to anyone buying a property, be they a first time buyer, landlord or homeowner … property is a long game … and by playing the long game, you will always win (although isn’t that true in most aspects of life?).

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