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Tuesday, August 15, 2017

Maidenhead Buy-To-Let Predictions up to 2037



On several occasions over the last few months, in my Maidenhead Property Blog, I predicted that the rate of rental inflation (i.e. how much rents are rising by) had eased over the last year. At the same time I felt that in some parts of the UK rents had actually dropped for the first time in over eight years. Recent research backs up this prediction.

Rents in Maidenhead for new tenancies fell by 0.4% in the last 12 months (i.e. not existing tenants experiencing rental increases from their existing landlord). When we compare that current rate with the historical rental inflation in Maidenhead, an interesting pattern emerges ..

·      2016 - Rental Inflation in Maidenhead was 5.1%
·      2015 - Rental Inflation in Maidenhead was 9.4%
·      2014 - Rental Inflation in Maidenhead was 3.2%

The reason behind this change depends on which side of the demand/supply equation you are looking from. On the demand side (from the tenants point of view) there is the uncertainty of Brexit and the fact that salaries are not keeping up with inflation for the first time in three years. Critically this means tenants have less disposable income to pay their rent. As an aside, it is interesting to note that nationally, rent accounts for 29% of a tenant’s take home pay (Denton House).

On the supply side of the equation (landlords point of view) Brexit also creates uncertainty. However, the biggest issue was a massive upsurge of new rental properties coming on to the market in late 2016, caused by George Osborne’s new 3% stamp duty tax for landlords in the first part of 2016. This meant a lot of new rental properties were ‘dropped’ on to the rental market all at the same time. The greater choice of rental properties for tenants curtailed rental growth/inflation. A slight softening of Maidenhead property prices has compounded this.  Figures from The Bank of England suggested that first time buyers rose over the last 12 months as some were more inclined to buy instead of rent. Together, these factors played a part in the ongoing moderation of rental growth.

The lead up to the General Election in May didn’t help: after all people don’t like doubt and uncertainty. So now that we have a mandate for going forward over the next 5 years hopefully that has removed any stumbling blocks stopping tenants making the decision to move home.

Whether it be ‘hard’ or ‘soft’ Brexit negotiations (and with the Election result the Tory’s might have to be ‘softer’ on those negotiations) the simple fact is, we aren’t building enough properties for us to live in. Both in Maidenhead, the South East and the wider UK, long-term population trends imply that rents will soon be growing faster than inflation again. Look at the projections by the Office of National Statistics.


Population Estimates for Windsor and Maidenhead Borough Council over the next 20 years
2016 (actual)
2021
2026
2031
2036
149,409
154,610
159,259
163,051
167,043




Tenants will still require a vibrant and growing rental sector to deliver them housing options in a timely manner. As the population grows in Maidenhead, and wider afield, any restriction to the supply of rental properties (brought about by poor returns for landlords) cannot be in the long-term best interest of tenants. Simply put rents must go up!


The fact is that I see this as a short-term blip and rents will continue to grow in the coming years. With rents only accounting for 29% of a tenants’ disposable income, the ability for most tenants to absorb a rent increase does exist.

Thursday, August 10, 2017

Nursery Road, Taplow - 3 bed semi-detached - Lent Rise School Catchment

Good Evening, today we are off to the Taplow /Burnham borders. 

This is not the first property on Nursery Road I have brought to your attention, the reason being is that there is great demand for tenants with young families locating to locate within the Lent Rise School catchment area, therefore houses that come on the market in this area should be considered by all investors. In terms of rental income then you would be looking up to £1,500 PCM for a house presented in excellent condition. 

I have people registered with me who are looking for places just like this.... so you should give the team at Romans a call for more details. It's on the market for £479,950....

https://www.zoopla.co.uk/for-sale/details/44690751






Wednesday, August 2, 2017

Laggan Road, Maidenhead - 3 bed semi-detached house - Furze Platt Area

Good morning, this house has just come to the market with Romans for just under £390K. Most investors tend to aim for the more central areas of town, but the the Laggan Road area of Maidenhead should not be dismissed. I have recently rented out a number of properties in this part of town so demand for the Furze Platt area is still strong! For a nicely presented 3 bed house in this area you can expect to achieve a rental income in the region of £1,350 PCM. This property looks like it needs some work, but from the pics this looks cosmetic which means you could get this on the rental market without too much hassle. 

More details below, as usual give me a call if you have any questions...?

https://www.zoopla.co.uk/for-sale/details/44599871






Alwyn Road, Maidenhead - 5 bed detached bungalow - Development Project

Hello Blog Readers, just seen this house come to the market with Roger Platt for £535K - At a glance this offers real development opportunity, but given that house prices have levelled off in recent times you need to factor this into your calculations when assessing what returns this could give you....? I still think this place offers real opportunity.... Please feel free to get in touch for more advice on this property or any other questions you may have own the local property market.

More details on this property below, or just give the ladies and gents at Roger Platt a call...

https://www.zoopla.co.uk/for-sale/details/44606993








Thursday, July 20, 2017

The Maidenhead Property Market, The Beatles, Sweden and 50 year mortgages




50 years ago, in 1967, the first human heart transplant was performed by Dr Christian Barnard in South Africa. In the same year Sweden switched from driving on the left-hand side to the right-hand side of the road. The average value of a Maidenhead property was £7,552, interest rates were at 5.5% and The Beatles released one of my favourite albums – their Sgt Peppers album ... but what the hell has that to do with the Maidenhead property market today?? Quite a lot actually ... so with my CD Player turned up loud - let me explain my friends!

I have been doing some research on the current attitude of Maidenhead first-time buyers.  First-time buyers are so important for both landlords and homeowners. If first-time buyers aren’t buying, they still need a roof over their heads, so they rent (good news for landlords). If they buy, demand for Maidenhead property goes up for starter homes and that enables other Maidenhead homeowners to move up the property ladder.

First-time buyers are the lifeblood of the property market. They are, however the most susceptible to interest rate rises and the affordability of mortgages. With that in mind, let us see what is happening to them…

The average value of a Maidenhead property is currently standing at £569,444 and UK interest rates at 0.25%. As each year goes by, it appears the age of the everlasting mortgage has started to emerge, prompted by these first-time buyers, eager to get a foot on the housing ladder. I was reading a report a few days ago where some mortgage companies confessed that the battle to gain big returns from the property market has led to mortgages that will take considerably longer than the customary 25 years to pay off.

Over the last few years, it has been commonplace for first-time buyer mortgages to be 30 and 35 years in length as the ‘Bank of Mum and Dad’ have been helping with the deposit (Beatles Sgt Pepper song - “With a Little Help from My Friends”). Now, some high street banks are offering mortgage terms of 40 years. This means first-time buyers could be paying until their mid 60’s - I can hear that other great track from the same album "When I'm Sixty-Four" ringing in my ears! So, a 50-year mortgage does not seem as far-fetched now as it would have been back in the 1970’s. After all life expectancy for a male then was exactly 69 years and today its 79 years and 5 months!

Over the last ten years, Maidenhead property prices have continued to rise more than wages, therefore, first-time buyers are looking for bigger loans. If this development continues, the only way repayments can remain reasonable is by increasing the term of the loan.

However, some commenters have said there are worries the mortgage companies are lending money over such a long term, they threaten leaving some first-time buyers with a generation of debt if the house price bubble bursts.  Interestingly, when I looked at what had happened to average property values in Maidenhead over the last 50 years, there have been bubbles. First-time buyers should take heart, since as a county we have always recovered from it a few years later.



What if interest rates rise? Well looking at historic UK interest rates, the current rate of 0.25% is at a 300-year low. Mortgages will never be cheaper. I would however, seriously consider fixing the rate to cushion any future potential interest rate rises (since they can only go in one direction when they do change). If Maidenhead first-time buyers see buying a home as a long-term decision, based on the last 50 years, they should be just fine!



Before I go, a final thought for property buyers in Sweden, the land of Volvo and Abba. As Swedish property prices are so high, Swedish Regulators announced last year limits on the length of Swedish mortgage terms. They don’t bother with 50-year mortgages (On and On and On – Abba).

No, our Volvo-loving Swedish friend’s average mortgage length is 140 years (this is not a typo). Although such mortgages have had their Waterloo (Abba), regulators have significantly reduced the maximum term of a Swedish mortgage to 105 years. Either way, that’s a lot of Money, Money, Money (Abba again – Sorry!)  to pay back!


Now I will leave you in peace as I listen to the 1980’s Madness song ‘Our House’. My apologies to all the Beatles and Abba fans in Maidenhead - a bit of light hearted fun albeit on serious topic.

Wednesday, July 5, 2017

178 Maidenhead Households Occupied by OAP Renters



Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Maidenhead, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Maidenhead?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Maidenhead at age 65 (years) is 19.4 years for males and 22.3 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Maidenhead.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Maidenhead?  Of the 6,400 households in Maidenhead, whose head of the household is 65 or over, not surprisingly 5,156 of households were owned (80.56%) and 941 (14.70%) were in social housing.  However, the figure that fascinated me was the 178 (2.78%) households that were in privately rented properties.

Anecdotal evidence, by talking to both my team and other Maidenhead property professionals is that this figure is rising.  More and more Maidenhead OAP’s are selling their large Maidenhead homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Maidenhead OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP - the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn't leave family members panicking to sell the property to fund care-home fees.


Maidenhead landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

Thursday, June 8, 2017

Maidenhead First Time Buyers borrow £45.9m in the last 12 months





Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Maidenhead property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 956 properties have sold (and completed) in Maidenhead, worth £503.1m. Interestingly the number of properties changing hands in Maidenhead has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Maidenhead buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Maidenhead property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.  

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months 

Q1 2016 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers
Q2 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers
Q3 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers
Q4 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Maidenhead itself, first time buyers have borrowed more than £45.9m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Maidenhead economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at Maidenhead, at this moment in time there are 691 properties for sale, compared to 423 properties a year ago. All this will be welcome news amongst Maidenhead first-time buyers with a combination of a proportional reduction in new investors and landlords.


2017 is proving an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Maidenhead property market like this, you might want to visit the Maidenhead Property Market Property Blog