Tuesday 26 February 2019

1 bed, 2 bed or 3 bed homes – Which Sell the Best in Royal Tunbridge Wells?

A few months ago, I wrote an article on the Royal Tunbridge Wells Property Blog about the length of time it took to sell a property in Royal Tunbridge Wells and the saleability of the different price bands (i.e. whether the lower/middle or upper local property markets were moving slower or quicker than the others). For reference, a few months ago it was taking on average 55 days from the property coming on the market for it to be sold subject to contract (and that was based on every Estate Agent in Royal Tunbridge Wells) … and today … 115 days  .. does that surprise you with what is happening in the UK economy?

Well, a number of Royal Tunbridge Wells landlords and homeowners, who are looking to sell in the coming months, contacted me following that article to enquire what difference the type of property (i.e. Detached/Semi/Terraced/Apartment) made to saleability and also the saleability of property by the number of bedrooms) As I have said before, whether you are a Royal Tunbridge Wells landlord looking to liquidate your buy to let investment or a homeowner looking to sell your home; finding a buyer and selling your property can take an annoyingly long time… but anything you can do to mitigate that is helpful to everyone.

So, I did some research on the whole of the Royal Tunbridge Wells property market .. and these were my findings …  to start with by type (i.e. Detached/Semi/Terraced/Apartment)
….




As you can see, the star players are the semi-detached variants of Royal Tunbridge Wells’ property, whilst detached seem to be sticking in Royal Tunbridge Wells.

Next I looked at what the number of bedrooms does to the saleability of Royal Tunbridge Wells property.. 




… and as you can see the five bed properties seem to be taking the longest time to sell ..and to answer the question in the title .. it’s two bed properties!

So, what does this mean for Royal Tunbridge Wells’ buy-to-let landlords and homeowners?  

There is no doubt that there is a profusion of properties on the market in Royal Tunbridge Wells compared to 18 months ago … it’s not because more houses are coming on to the market, it’s because they are also taking a little longer to sell. This makes it slightly more a buyer’s market than the seller’s market we had back in 2014/5/6. Therefore, in some sectors of the Royal Tunbridge Wells property market, it is much tougher to sell, especially if you want to sell your Royal Tunbridge Wells home fast.

Therefore, to conclude, on the run up to the New Year, if you are looking to buy and plan to stay in the buy to let market a long time, perhaps take a look at the Royal Tunbridge Wells properties that are sticking as there could be some bargains to be had there? Want to know where they are .. drop me a line and I will tell you a nifty little trick to find all the properties that are sticking.

Tuesday 19 February 2019

Live in Royal Tunbridge Wells? About to Retire and Privately Rent? You Could be £6,000 a Year Worse Off!

You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis ... where people aren’t saving enough for their retirement. But it’s not the lack of future pension incomes of the Royal Tunbridge Wells people that are my immediate concern. The fact is that so many of the future retirees in Royal Tunbridge Wells over the coming decade, who never bought their home in the Millennial years of the 1990’s and 2000’s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.

In Royal Tunbridge Wells, there are 709 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

A Royal Tunbridge Wells retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Royal Tunbridge Wells is £1,080 a month - a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet...

The maximumhousing benefit for a couple in Royal Tunbridge Wells is currently £586.56 per month … leaving a significant gap when you consider the average rent in Royal Tunbridge Wells is £1,080 per month

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more Royal Tunbridge Wells people retire and continue to rent from a private landlord. Numerous Royal Tunbridge Wells private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse. 

The average Royal Tunbridge Wells retiree will need to find £5,921 pa to stay in their privately rented home after retirement

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Royal Tunbridge Wells homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow ... yet lets be frank - they aren’t building bungalows in large numbers in Royal Tunbridge Wells anymore.

And for the Royal Tunbridge Wells landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Royal Tunbridge Wells’ tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings. 

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer. 

The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built ... but back to reality ... that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Royal Tunbridge Wells buy to let landlords!

Monday 11 February 2019

Top 25 Most Saleable Streets in Royal Tunbridge Wells

Following on from my last article, if you recall I said that Queens Road had the most properties sold in the TN4 Royal Tunbridge Wells postcode, yet I felt that this information wasn’t telling the whole story, as some roads in Royal Tunbridge Wells have more properties on them than others. Therefore, I promised that I would compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold) more often than the rest of the locality. 

To give some foundation to the article, in 2017 Royal Tunbridge Wells’ homeowners had, on average, lived at their existing address for 17 years and 6 months. However, when I looked at the difference between homeowners with and without a mortgage; Royal Tunbridge Wells homeowners without a mortgage had lived in their Royal Tunbridge Wells home for an average of 23 years and 9 months compared with 10 years and 1 month for homeowners with a mortgage. Interestingly, Royal Tunbridge Wells’ Council house tenants have on average resided at their present home for 11 years and 4 months, whilst finally for those who rent from a private landlord, tenants generally have lived in their property for an average of 3 years and 11 months (up from 3 years 5 months only five years ago).

The TN4 street in the top 25 saleable streets with the highest number of households on it is Culverden Park Road, which has 348 residential addresses. Yet since 1995, only 206 properties have changed hands (some multiple times!)  .. which means the street’s saleability or churn rate is 59.2%.

However, the street or road that has the highest saleability or churn rate is St Pauls Street … which has 49 households on it, yet since 1995 there have been 130 house sales … a saleability rate of 265.3%. Here is the full breakdown of the top 25 streets … 



So, as you can see, some interesting statistics and a lot more correlation between saleability rate and property values (unlike the article last time where we compared value to ‘out and out’ raw sales figures).

Therefore, what does this all mean to Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords? Well these 25 streets are the best performing streets out of the 315 streets in the Royal Tunbridge Wells (TN4) area so if you live/own a property on those 25 streets … you are sitting on a very saleable street. If you want to find out how saleable your street is .. please drop me a line and we can discuss this further.

Monday 4 February 2019

Queens Road, Royal Tunbridge Wells …the road where people move the most

Many folks say moving home is the most stressful thing. Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

We wish we could be instantly transported like in Star Trek “Beam me up Scotty to a blissful moved in state”. Yet the week you move, it’s like an episode from the original 1960’s series Star Trek, when the crew had a transporter accident with an ion-storm sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship and chaos eschews!!!

Star Trek aside, when you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!).  Then you put your property on the market with an estate agent, find a buyer for your Royal Tunbridge Wells property, agree a price for both, then instruct solicitors. The property becomes sold ‘subject to euphuism’ ... sorry ‘contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through … phew - stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Royal Tunbridge Wells people think so.

In the last 12 months, 382 families have sold and moved home in Royal Tunbridge Wells (TN4)

Yet the question I want raise is ... do people on certain streets in the TN4 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the TN4 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Queens Road is the winner with an average of 15.78 house sales per year(since 1995) as on the graph below.

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street.  As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.



However, I still felt the information wasn’t telling the whole story … some roads in Royal Tunbridge Wells have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality. 

In the next article, (and I promise I won’t mention Star Trek again), I will answer that question in great depth ... and the results should (as they did me) certainly raise an eyebrow. The question is ... do you live on one the top 25 Royal Tunbridge Wells most saleable streets in Royal Tunbridge Wells (TN4)?   

Come back to my Royal Tunbridge Wells Property Blog for the next article to find out!

Saturday 2 February 2019

Royal Tunbridge Wells Homeowners Have Made an Annual Profit Of £18,887 Since the Millennium

As we go full steam ahead into 2019, it’s certain that the Royal Tunbridge Wells housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Royal Tunbridge Wells homeowner, having owned their property since the Millennium, has seen its value rise by more than 235%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Royal Tunbridge Wells property values has come from the growth in Royal Tunbridge Wells property values, while some of it will have been enhanced by extending, modernising or developing their Royal Tunbridge Wells home.
Taking a look at the different property types in Royal Tunbridge Wells, and the profit made by each type, makes interesting reading..


However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.


 So the ‘real’ value of the profit, after inflation, in Royal Tunbridge Wells has been £11,530 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Royal Tunbridge Wells property, property values dropped between 15% and 20% in 18 months … Royal Tunbridge Wells homeowners over the long term are still better off than those renting. 

Moving forward, the question I get asked time and again is what will happen in the future to the Royal Tunbridge Wells Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium tolongterm to ensure that this level of house price growth is maintained in Royal Tunbridge Wells is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come). 

Another factor is that whilst Royal Tunbridge Wells’ landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Royal Tunbridge Wells see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Royal Tunbridge Wells buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Royal Tunbridge Wells in 2018, most Royal Tunbridge Wells buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Royal Tunbridge Wells buy to let landlord, ensure that continues? 
Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Royal Tunbridge Wells whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.