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.