Maidenhead House Price Monopoly: How do Prices vary?

Well as the nights draw in, if there is nothing on the telly, the significant other and myself like to play the board game Monopoly. The buying and renting of property, it’s like a busman’s holiday for me! Interestingly, the game was originally invented at the turn of the 20th Century (in 1903) and the game was initially called ‘The Landlord’s Game’!  Anyway, after a few years in the wilderness, the current owners of the game renamed it in 1935 and so began Monopoly as we know it today.

So whether you are a homeowner or landlord in Maidenhead, what would a Monopoly board look like today in the town? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Maidenhead today.

Initially, I have focused on the SL6 postcode only, looking at the Brown Squares on the board, the ‘new’ Old Kent Road in Maidenhead today would be Norreys Drive, with an average value £184,500 (per property) and Whitechapel Road would be Evenlode, which would be worth £199,000. What about the posh dark blue squares of Park Lane and Mayfair? Again, looking at SL6, Park Lane would be Winter Hill Road at £1,411,695 and Mayfair would be Fishery Road at £2,885,625. Also, I can’t forget the train stations (my favourite squares), and over the last 12 months, the average price that property within a quarter mile of the station sold for was £305,100.

So that got me thinking what you would have had to have paid for a property in Maidenhead back in 1935, when the game originally came out?

The average Maidenhead detached house today is worth £794,710 would have set you back 1437 Pounds 17 shillings and 4 old pence.

The average Maidenhead semi detached house today is worth £431,840 would have set you back 781 Pounds 6 shillings and 6 old pence.

The average Maidenhead terraced / town house today is worth £395,900 would have set you back 716 Pounds and 6 shillings.

The average Maidenhead apartment today is worth £290,750 would have set you back 526 Pounds 1 shillings and 1 old pence.

If that sounds like another currency, you must be in your 20’s or 30’s, because it was back in February 1971, that Britain went decimal and hundreds of years of everyday currency was turned into history overnight. On 14th of February of that year, there were 12 pennies to the shilling and 20 shillings to the pound. The following day all that was history and the pound was made up of 100 new pence.

Anyway, I hope you enjoyed this bit of fun, but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis and if you are going to invest in the Maidenhead property market, you should consider the Maidenhead property you buy a medium to long term investment, because Buy to let is pretty much what it sounds like – you buy a property in order to rent it out to tenants.

As I reminded a soon to be first time landlord from Taplow the other week, Buy to let in Maidenhead (as in other parts of the Country) is very different from owning your own home. When you become a Maidenhead landlord, you are in essence running a small business – one with important legal responsibilities. On that note, I want to remind landlords of the recent and future changes in legislation when it comes to buy to let. This year, rules have changed about tenant deposits, carbon monoxide detectors and early in the New Year, landlords will have responsibilities to do immigration checks on all their tenants. Failure to adhere to them will mean a minimum of heavy fines in the thousands or in some cases, prison ... it’s a mine field!  

That’s why I write the Maidenhead Property Blog, where it has an extensive library of articles like this one, where I talk about what is happening in the Maidenhead property market, what to buy (and sometimes not) in Maidenhead and everything else that is important to know as a Maidenhead landlord.

Is this the end of buy to let in Maidenhead?

Well George Osborne, in his recent Autumn statement, caused Maidenhead landlords to ask whether buy to let is a viable investment option, when he announced that landlords, when buying another buy to let property from April 2016 will have to pay an additional 3% stamp duty on top of the standard rate. So for example, on a £100,000 terraced, the stamp duty goes from nil to £3,000. It becomes quite stark when you look at the middle to upper market, so it means that the stamp duty bill for a £285,000 buy to let home will rise from the current £4,250 to £12,800 from April next year. 

Some say property in Maidenhead will be worth less because potential landlords will not be willing to pay as much for them, and if house builders or existing homeowners don't feel they are going to get as much for them , then there is less motivation to build / sell them?... and the person we can blame for this is George himself. Back in 2012, he choose to utilise the British housing market to kick start the UK economy, with  subsidies, Funding for Lending and Help to Buy. However, whilst that helped the Tory’s get back into power in 2015, some say this impressive growth in the UK property market has been at the expense of pricing out youngsters wanting to buy their first home.

Others say this is the straw that breaks the camel’s back as over the next four years Landlords will slowly lose the ability to offset all their mortgage interest against tax on rental income, after changes announced in the Summer Budget. At the moment, landlords can claim tax relief on buy to let mortgage monthly interest repayments at the top level of tax they pay (ie 40% or 45%). However, over the next four years this will reduced slowly to the basic rate of tax – currently 20%.

Surely this is the end of Buy to Let in Maidenhead? Probably.. but before we all run to hills panicking .. let me give you another thought.

Stamp Duty rules were changed in December 2014. Before then, landlords were eagerly buying up properties under the ‘old slab style Stamp Duty’ system. For example, the stamp duty bill on that £285,000 property was lower on the old slab style duty (pre Dec 2014), at £8,550, yet it isn’t a million miles away from new £12,800 stamp duty bill. Interestingly though, George has left a legal loophole in the new rules, because when it comes to selling up, they can offset purchase costs against any eventual capital gains tax, including stamp duty.

I believe that total returns from buy to let will continue to outpace other investments, such as the stock market, gilts, bonds and even pensions. Also, the best part about investing in property is that it is bricks and mortar. You can touch it, you can feel it, and it isn’t controlled by some City whiz kid in Canary Wharf .. the British understand property and that goes a long way!

Buy to let has enough impetus behind it that prospective landlords will continue to buy even with a larger stamp duty bill. Maidenhead landlords will need to be savvy with what property they buy to ensure the extra stamp duty costs are mitigated.   Buying buy to let property is a long term venture. In the past, it didn’t matter what property you bought in Maidenhead or at what price – you would always make money. Now with these extra taxes, the adage of ‘any old Maidenhead house will make money’ has gone out the window.   You wouldn’t dream of investing in the stock market without at least looking in the newspapers or taking advice and opinion from others, so why would you take the same advice and opinion about buying a buy to let property in Maidenhead?

Grenfell Road - 5 Bedroom HMO - Investor Territory!

Good evening everyone! I thought this may be worth looking into for our investors focused on high yields. Recently posted by Haart, this 5 bed, town centre HMO could well be worth enquiring about! Many investors I am advising are asking me, in a market where prices seem to be sky rocketing daily, how to source property boasting yields above the average 4.5%? One of the simplest options is HMO's (in a good location and at the right price!). This certainly ticks the former but with a Price on Application the only way to find out the latter would be to give our friends at Haart a call! 

If you can pick this one up in the early £400k's without much work being required, this could well be worth a shot with yields around 7.5% based on a purchase price of £400k.

Be cautious! I hear many horror stories and bad experiences regarding HMOs's daily, but as an investor with a portfolio of successful HMO's myself I, naturally, have learned from mistakes in the early days, costly ones too! If you want any advice or assistance on how to succesfully invest using this strategy, or even if you already have and want to know if there is anything you can do to turn a failing HMO into a simple and profitable investment, please get in touch duncan@primequarters.co.uk

http://www.rightmove.co.uk/property-for-sale/property-38431695.html

Northumbria Road, Maidenhead - 2 Bed Apartment - Ideal Investment!

Good Morning All! This maisonette jumped out at me during my daily search of properties that have come on the market. I think this will get the attention of all the investors out there....its on with Romans for £250K and for that you can expect yields approaching 5%. For this price you get quite a lot of property for your money with a spacious rooms and a big kitchen which is a stand out for most apartments in Maidenhead. 

This will go quickly, so get on the phone to Romans!

http://www.rightmove.co.uk/property-for-sale/property-38299644.html

Values of Maidenhead Terraced Houses smash through the £430/sqft barrier

The Council of Mortgage Lenders (CML) latest snapshot of the buy to let mortgage market shows us that buy to let landlords haven’t been put off by the Chancellors announcements on the way buy to let’s are taxed.

Last month, the CML stated £1.4billion was borrowed by UK landlords to purchase 10,500 buy to let properties, up 26.5% from the same month in 2014, when only 8,300 properties were bought with a buy to let mortgage. Go back two years and the number of buy to let mortgages used for purchasing (again not re-mortgaging) is 36.4% higher! Even more interesting has been the fact that the average amount borrowed has risen as well. The average buy to let mortgage last month was £133,330, up from £128,480 a year ago.

In Maidenhead, I am speaking to more and more landlords, be they seasoned professional landlords or FTL’s (first time landlords), as they read reports that the Maidenhead rental market is doing reasonably well, with rents and property values rising.  Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).

The first thing you have to decide is whether you want great capital growth or great rental yield, as every knowledgeable landlord knows, you can’t have both. Over the last twenty years, property values in Maidenhead have risen by 311.83%, compared to Greater London’s 436.2%. This has proved that capital growth increases faster in the more expensive Capital, but your investment money doesn’t go very far, meaning there won’t be as much rental yield from a 1 bed flat in Chelsea (2% per year at best with a fair wind) as a 2 bed semi in Maidenhead. However, whilst the figure of 311.83% is an average for the area, certain areas of Maidenhead have seen capital growth much higher than that and others areas much worse (we have talked about those in previous articles).

If you recall in an earlier article, my research reveals that Maidenhead apartments tend to generate a 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.

So what should you be buying in Maidenhead, and more importantly, how much?

- The average apartments in the town are currently selling for approximately £418 per square foot.

- Terraced houses in Maidenhead are currently obtaining, on average, £399,600 or £431 per square foot,

- An average semi in Maidenhead is selling for £435,100 (and achieving £420 per square foot). 

Now these are of course averages, but it gives you a good place to start from. In the coming weeks, I will look at rents being achieved on Maidenhead houses and apartments, and the yields that can be obtained on how many bedrooms there are....?

Maidenhead Tenants Pay 39.2% of their Salary in rent

I had the most interesting chat with a local Maidenhead landlord the other day about my thoughts on the Maidenhead property market. The subject of the affordability of renting in Maidenhead came up in conversation and how that would affect tenant demand. Everyone wants a roof over their head, and since the Second World War, owning one’s home has been an aspiration of many Brits.  However, with rents at record highs, many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first time buyers deposit.

Therefore, I thought I would do some research into the Maidenhead property market and share with you my findings.  Maidenhead tenants spend on average over a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Maidenhead is £1,265 per month.  When the average annual salary of a Maidenhead worker stands at £38,699 per year - that means the average Maidenhead tenant is paying 39.2% of their salary in rent.  I doubt there is much left to save for a deposit towards a house after that, and that my Maidenhead Property Blog reading friends is such a shame for the youngsters of Maidenhead.

You see one the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a severe lack of new properties being built in Maidenhead.  It’s the classic demand vs supply scenario, where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also, Maidenhead people aren’t moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, a few weeks ago I said back in Spring 2008, there were over 1,800 properties for sale in Maidenhead and since then this has steadily declined year on year, so now there are only 530 for sale in the town.

Back in Spring 2008, there were over 1,800 properties for sale in Maidenhead and since then this has steadily declined year on year, so now there are only 530 for sale in the town. So, the planners in Maidenhead haven’t allowed enough properties to be built in the town and existing Maidenhead homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Maidenhead to match demand, these are the reasons houses prices in Maidenhead have remained quite buoyant, even though economically, over the last 5 years, it was one of the worst on record for the country and the South East region as a whole.

However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey  (their Generation Rent 2015 Survey) suggested more and more people may be long term, if not lifelong tenants. In fact there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45.  It seems from this survey that the state of the UK economy has shifted priorities quite significantly in quite a short space of time.  With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people were seeking rental properties .

It is often said that more people in central Europe rent for longer or never own their own property. The last two censuses in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and, as a country, we are becoming more and more like Germany.   That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays, often quoted, is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that, they have a higher personal income than in the UK.      

Therefore, if we are turning into a more European model and the youngsters of Maidenhead and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Maidenhead tenants as wages will start to rise and good news for Maidenhead landlords, especially as property values in Maidenhead are now 8.7% higher than year ago!