LETTING & ESTATE AGENT

Booming housing market, is there still demand from tenants

Booming housing market, is there still demand from tenants

Following last week’s article, I had an interesting chat with a lady who lives in Wantage, she popped into our office on West St Helen's Street, whilst her better half was at the Opticians. She is thinking of buying her first buy-to-let property and she wanted my opinion on the state of the market and if it was a good time to invest.

She was particularly worried that with all the newspaper headlines of a booming housing market, there wouldn’t be any demand from tenants. One of the best pieces of advice I can give to those looking to invest in property is a simple trick of the trade. You can judge the affordability of an area’s property market (and thus how much demand there could be) by simply finding the ratio of the average property price to the average salary. The lower the ratio, the more affordable property is.

When we put this to the test, we found that Wantage/Abingdon/Didcot currently has an average property value of around £325,000. The average salary of someone living in Wantage/Abingdon/Didcot estimated at £22,521. This is a ratio of 14.43 to 1. Most lenders will only lend up to 4 times income, so to buy an average house in Wantage/Abingdon/Didcot, a first time buyer would need to be on a salary in the early £70,000’s  and even then, would need to raise the 5% deposit, which when you take into account buying fees, will be in the order of £16,250.

Tenants’ inability to raise that sort of money for the deposit is driving demand for rental property. If you would like some advice about buy-to-let, regardless of whether you are a landlord with an established portfolio or someone thinking of investing in the rental market for the first time; call in to our offices at Martin & Co Abingdon, 10 West st Helens Street for a chat.