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! 

Fifield Road, Fifield - 3 Bedroom detached - Some eye candy for you!

Good afternoon all! This may not be one for the investors, but if youre thinking of making the move to a bigger place (or a smaller one), or even if youre just looking for something more rural then this is definitely worth a look. 

It's a 3 bedroom detached bungalow in the Fifield, away from the all day everyday hussle and bussle of the town, but still close enough for the convenience! From the looks of things the current vendors have spared no expense in creating a lovely modern home which seems to tick the boxes for great place... at the right price (?!)

Yes it very much looks the part, but others in the road have been stuck on the market for up to a year when priced only a fraction too high in recent times! 

It's definitely worth an enquiry but if there's no room for negotiation then I think this one could be hanging around for a while...... only one way to find out give the team at Roman's a call..... its on the market for £725K.

See link below for some more details:

http://www.rightmove.co.uk/property-for-sale/property-37796016.html?premiumA=true

Maidenhead’s £2 billion Mortgage Powder Keg

Eight years ago, in the summer of 2007, hardly anyone had heard of the term ‘credit crunch’, but now the expression has entered our daily language and even the Oxford Dictionary.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Maidenhead Property market, but in November / December 2007, and for the following seventeen months, Maidenhead property values dropped each and every month like the proverbial stone. The Bank of England soon realised in the late summer of 2008 that the British economy was stalling under the continued pressure of the Credit Crunch. Therefore, between October 2008 and March 2009, interest rates dropped six times in six months from 5% to 0.5% to try and stimulate the British economy. 

Thankfully, after a period of stagnation, the Maidenhead property market started to recover slowly in 2010, but really took off strongly in late 2013 / early 2014 as property prices started to rocket. However, the heat was taken out of the market in late 2014/early 2015, with the new mortgage lending rules and some uncertainty, when some people had a dose of pre–election nerves.  

With the Conservatives having been re-elected in May, the Maidenhead property market regained its composure and in fact, there has been some ferocious competition among mortgage lenders, which has driven mortgage rates to record lows. Whilst I have no actual figures to back this up, I know an awful lot of long serving bank managers, mortgage arrangers and people in the finance industry, all of whom have told me on previous occasions when interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise that was the catalyst for many homeowners and landlords to remortgage but the second or third increase.  The reason being that it was only by the time of the third rate rise,  it started to hit the wallet.  However, the issue is, by the time of the second or third rate rise the best fixed rates, were in all instances, no longer available as they had been pulled by the banks months before.

But here is the good news for Maidenhead homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  I read that the well respected UK financial website Moneyfacts said only a couple of weeks ago, the average two year fixed rate mortgage has fallen from 3.6% twelve months ago to just under 2.8%.

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK.  So what about Maidenhead?  In Maidenhead, if you added up everyone’s mortgage, it would total £2.1 billion.  Even more interesting is when we look at 

Maidenhead and split it down into the individual areas of the town,

SL6 0 - £151m,

SL6 1 – Town Centre going down to Braywick Sports centre  176m,

SL6 2 – Holyport and the northern end of Shoppenhangers Road  (Larchfield Road area) £287.6m,

SL6 3 – White Waltham and Cox Green £274.5m,

SL6 4 – Altwood Road area  £210.5m,

SL6 5 – Hurley £144.5m,

SL6 6 – North west of the Town Centre £296.3m,

SL6 7 – Furze Platt £185.8m,

SL6 8 – Everything tot eh West of Ray Mead Road £228.3m,

SL6 9 – Cookham Rise £213.7m

Since 1971, the average interest rate has been 7.93%, making the current 0.5% very low.  So, if interest rates were to rise by only 2%, according to my research, the 5,388 Maidenhead homeowners, who have a variable rate mortgage would, combined, have to pay an approximate additional £23,940,000 a year in mortgage payments.  That means every Maidenhead homeowner with a variable rate mortgage, will on average have to pay an additional £4,444 a year or £370 a month in interest payments.

I know over the last couple of posts, I have talked about mortgages a lot however, I am not a mortgage arranger but an Estate Agent agent and as regular readers know, I always talk about what I consider to be the most important issues when it comes to the Maidenhead Property market and at the moment, in my humble opinion, this is the most important thing!

Buy to Let is all about maximising your investment, increasing income and reducing costs. I give advice, opinions, thoughts, concerns, worries, expectations and fears about the Maidenhead Property market in my blog on the Maidenhead property market.

Clare Road, Maidenhead - 2 Bed Semi Detached - Investor Territory!

Good Evening everybody! Today our friends at Prospect have just released to the market this 2 bedder which is in the heart of Investor territory! At £425K there is some work thats needs to be done.....from the pics it certainly looks like it will need an update to the kitchen and bathroom....but in order to get this rented that work is probably going to spread out to the rest of the house also. You might want to consider doing some haggling on that price..... but location alone means this could be a good deal!

You can see some more pics by clicking on the link below.....

http://www.zoopla.co.uk/for-sale/details/38707999

Interest rates set to rise – How will that affect the Maidenhead property market?

A few weeks ago, I mentioned in this blog about how the Bank of England has been indicating recently that UK interest rates will be going up in the not too distant future. Therefore, if you are one of the 9,452 homeowners in Maidenhead, who own your own home with a mortgage, then you need to consider your options and start to budget for an interest rate rise. However, if you are a landlord, who owns one of the 3,373 rental properties in the town, whilst your exposure to interest rate rises is lower, it is most certainly something you should be aware of.

Since the spring of 2009, British interest rates have been at a record low of 0.5%. It’s not a case of if, but when, they will rise. We thought this would be before Christmas but all the signs at that this will not be until mid 2016. I also expect those rises will be slow, steady and limited. It depends on what is happens to UK wage rises, UK inflation and the general state of the British economy. Nevertheless, as much most of us in Maidenhead would love to pull the shutters and stick two fingers up to the world, we have to recognise we are part of a global economy and global economic worries still exist to prevent an abrupt and instantaneous rate rise.

Those Maidenhead landlords, who do have a mortgage, need to realise that as interest rates rise, their monthly mortgage costs rise. It’s easy to say you will look at your mortgage next month, then before you know it the Spring will be here and you've not even thought about it!  Don’t forget, mortgage lenders have always removed the juicy low rate mortgage deals a few months before interest rate rise. Speak to a qualified mortgage arranger, there are lots of them in Maidenhead and seriously consider fixing your mortgage rate now.  You didn’t buy your Maidenhead buy to let property for it to become a millstone around your neck. It’s all about mitigating your costs and maximising your income to make your Maidenhead buy to let property the investment you want it to be.

However, on the other side of the coin, two in three landlords who have bought property since 2007, have done so without a mortgage. A rise in interest rates might be a good thing. Let me give you some background first, then I’ll explain why. Maidenhead landlords have see their return on investment for their Maidenhead buy to let property, over the last couple of years, perform very well indeed with Maidenhead property values rising by 42.19% since the Spring of 2009. However, when rates do rise, whilst more expensive mortgage rates will ease the demand for borrowing, on the other hand, it may temper house price growth, making the property market more competitive... and therefore, we should see the return of some bargain property buys in Maidenhead!

Finally though, can I ask all Maidenhead homeowners and Maidenhead landlords, who have a mortgage that isn’t fixed, they need to recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels.  I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage arranger and, if appropriate, fix your mortgage before interest rates rise. Don’t say I didn’t warn you!

In the meantime, if you are a landlord looking for a bargain now, don’t despair ... there are plenty out there, if you know where to look! One place is Rightmove, another Zoopla and another OnTheMarket. 

However, sometimes, you can’t see the wood for the trees. At the time of writing, Rightmove had 358 properties for sale in Maidenhead, Zoopla 247 properties for sale in the town and OnTheMarket 32 properties ... where do you start? A lot of savvy Maidenhead landlords like to visit the Maidenhead Property Blog where, irrespective of which agent is selling it, I regularly post what I consider out of the hundreds of properties on the market, to be the best buy to let deal in Maidenhead.   

High Town Road, 1 bedroom apartment – Perfect first investment!

Good morning all! This town centre apartment caught my eye this morning and is likely to of caught the eye of many investors too, it’s on the market with Romans for £250k for which you can expect yields north of 4.5%... but the real catch is the location, it’s not often I come across any properties within 0.25m of the station and town centre for under £300k nowadays and also boasting tenants-in-situ, this apartment would be perfect for any of you that have been following the market for a while looking for a safe-bet for their first investment!

This will not hang around so get in touch with Romans and let me know how you get on!

http://www.rightmove.co.uk/property-for-sale/property-49470940.html

Crisis in the Maidenhead Property Market ..probably?

I don’t know about you, but if you watch Sky News every waking hour or read the newspapers, it always seems we as a Country, Europe or the World seem to lurch from one crisis to another. Another week, another crisis averted. It was only last summer the soothsayers were predicting the end of the world over the supposed house price bubble that many believed was developing in the South. Property prices were rising at 20%+ per annum in London, only for things to ease as the property market in the Capital showed a controlled slowdown and cooling in activity with price growth easing to a more realistic 8% to 9% per annum. Interestingly, there was no panic when some modest price drops were seen in some of London’s highest priced suburbs.

However, this month’s crisis is the buy to let boom and as George Osborne always likes to be topical, in the July emergency budget, he declared that he will start to scale back, from 2017, the tax relief that those high income tax rate landlords with a mortgage have benefited from. The Daily Mail ran headlines stating it was the end of the private landlord; predicting many landlords will give up on buy to let altogether and we will be inundated with rental properties up for sale as landlords feel squeezed from the market.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy to let property market could destabilise the whole UK property market. He was concerned landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

End of the world then?   .. this week, yes probably, but next week .. that’s another story!  Before we all go and live like a hermit in the Scottish highlands, let me explain to you my perspective on the whole subject. As I mentioned a few weeks ago, two thirds of buy to let properties bought in the last eight years have been bought mortgage free – so they won’t be affected by the Chancellors’ tax changes.  Also, something I feel is often overlooked but very important, is the fact that landlords historically have only been able to normally borrow up to 75% of the value of the rental property.  In the last property crash of 2008, property values dropped by the not so insignificant figure of 16.82% in Maidenhead, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no landlord would have been in negative equity in Maidenhead.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy to let, and the property market as a whole, will carry on relatively intact. It’s true reducing tax relief will hit landlords who pay the higher rate of income tax and this may slightly diminish buy to let as an investment vehicle, but I doubt people will sell. Many landlords have been lazy with their investments, buying with their heart, not their head. You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Maidenhead property market as a buy to let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Maidenhead buy to let market still offers good investment opportunities to new and old alike. Those who have bought in the last twelve to eighteen months have reaped the benefit from buying in Maidenhead, because the town offered a combination of reasonable house prices with subsequently increasing rents.  Property values have risen by 17.95% in the last eighteen months in Maidenhead, whilst looking at rents, in Q2 2015, average rental values for new tenancies were 11% higher than Q2 2014, which is particularly interesting as they only rose by 4.5% between Q2 2013 and Q2 2014.