How the 23.3% Saleability Drop in the Royal Tunbridge Wells Property Market Might Impact Your 2024 Home Moving Plans

The Tunbridge Wells housing market, like many others, has experienced a notable shift in 2023. 

The percentage of home sales agreed and moved (completed) compared to those withdrawn from the market unsold has decreased relative to 2022.

Looking at independent data for the Tunbridge Wells area (TN1 to TN4) …

 In 2022, 64.7% of properties that left the books of Tunbridge Wells estate agents agreed a sale, exchanged contracts, and the owners moved home

(1,776 Tunbridge Wells area properties exchanged and completed vs 966 properties that withdrew from the agent’s books, unsold).

In 2023, 49.6% of properties that have left the books of Tunbridge Wells estate agents agreed a sale, exchanged contracts, and the owners moved home

(1,123 Tunbridge Wells area properties exchanged and completed vs 1,142 properties that withdrew from the agent’s books, unsold up to the 20th December 2023), meaning there has been a …

23.3% proportional reduction in the saleability of

Tunbridge Wells homes between 2022 and 2023

It's interesting to compare that with the South East regional and national stats for both years.

In the South East, 63.46% of properties were exchanged, completed, and moved in 2022, compared to 47.54% in 2023, a drop of 25.1%. Nationally, 65.55% of properties were exchanged, completed and moved in 2022 compared to 52.39% in 2023, a decline of 20.1%.

This could raise concerns among local homeowners and potential sellers. As a seasoned estate agent in Tunbridge Wells, I have observed these trends closely and offer insights into this phenomenon and strategies to enhance your home's saleability in 2024.

Understanding the Dip in Saleability in Tunbridge Wells

Economic Influences: much like the rest of the UK, Tunbridge Wells has been subject to financial pressures such as inflation and Bank of England interest rate increases. These factors have affected buyer affordability, leading to a more cautious approach to home purchasing.

Market Saturation and Buyer's Market: 2023 saw a surge in Tunbridge Wells properties on the market. This increase changed the Tunbridge Wells property market from a strong seller's market to a balanced market or even a buyer's market in some parts of Tunbridge Wells throughout 2023, where the availability of choices led to a more selective purchasing behaviour.

Changing Buyer Preferences: In Tunbridge Wells, buyer preferences have evolved. There's a growing demand for properties that offer flexible living spaces, energy efficiency, and modern amenities, which not all available homes meet.

Local Economic and Social Factors: Tunbridge Wells’ local economic and social developments, such as job market shifts and community developments, have also played a role in influencing the housing market dynamics.

Six Tips to Maximising Your Tunbridge Wells Home's Saleability in 2024

Tunbridge Wells properties are still selling, yet not at the rate they were in 2021 and 2022.

Just under 5 out of 10 local people in 2023 have sold and moved (i.e., the 49.6% figure mentioned above). If you want to avoid being in the 5 out of 10 Tunbridge Wells people who were unable to sell and move this year, there are some things that you can do to stack the cards in your favour. 

To start with, the saleability levels in Tunbridge Wells in 2023 are very similar to the saleability rates between 2014 and 2019.  

1. Strategic Pricing: Understanding the local market is critical. Homes priced correctly from the outset are more likely to attract serious buyers. This requires a deep understanding of the local market trends, something a knowledgeable estate agent can provide.

 

2. Tailoring to Buyer Preferences: Align your Tunbridge Wells home with current trends. This could mean investing in creating flexible work-from-home spaces, upgrading energy systems, or modernising key areas like kitchens and bathrooms. However, before you start spending tens of thousands of pounds on this, please do pick up the phone so I can give you the best advice for the type of property you own in Tunbridge Wells. I have lost count of the number of times I've seen a homeowner spend money on the wrong things without advice, only to find the money they spent did nothing for the value of their home nor made it more saleable. 

 

3. Effective Marketing: Utilise a comprehensive marketing strategy that includes high-quality photography, possibly virtual tours, and leveraging online social media and portals. As experts in the Tunbridge Wells property market, we can target the correct demographic and present your home in its best light.

 

4. Preparing for Viewings: First impressions matter. Ensure your home is well-presented, clean, and decluttered. We can offer personalised advice on the presentation of your home to appeal to potential buyers.

 

5. Flexibility and Negotiation: Be prepared for negotiation and show flexibility in terms of viewing times and conditions of sale. This approach can make your property more appealing compared to others on the market.

 

6. Capitalising on Local Knowledge: The unique charm and amenities of Tunbridge Wells should be highlighted. As a local market expert in the town, I can help showcase these aspects effectively to potential buyers.

The decrease in the saleability rate reflects broader economic trends and evolving buyer preferences. However, with the right approach and strategies, selling your home in 2024 can be a realistic and successful endeavour. 

By understanding the market, pricing strategically, aligning with buyer preferences, and utilising effective marketing and presentation techniques, you can significantly enhance your chances of a successful sale. 

As a Tunbridge Wells property market expert, I offer more than just transactional advice; I provide insights into what makes our local Tunbridge Wells market tick. By partnering with a knowledgeable estate agent, you can confidently navigate these challenging times and maximise your chances of a successful home sale in 2024.

Embarking on the Landlord Journey:Insights for Aspiring and Seasoned Landlords in Royal Tunbridge Wells

 

Property investment has long been a staple in British retirement planning. 

The introduction of the buy-to-let mortgage over a quarter-century ago marked a significant turn, presenting opportunities for dual returns: rental income in the short term and capital growth in the long-term. You can see why there are a substantial number of Tunbridge Wells landlords who view property investment as a cornerstone of their retirement strategy.

However, this path is full of challenges. Recent shifts in tax and regulatory landscapes, coupled with escalating interest rates, have imposed pressures on profitability, compelling some landlords to reconsider their positions. Thus, becoming a landlord necessitates meticulous research and a strategic approach.

The Foundations of Buy-to-Let Mortgages in Tunbridge Wells

A critical step in this venture is securing a buy-to-let mortgage, a process distinct from obtaining a homeowner loan. Lenders assess buy-to-let applicants based on an interest-coverage ratio (ICR), which demands that rental income meets or exceeds a certain percentage of the monthly mortgage interest (a minimum of 125% for standard taxpayers and 145% for higher-rate taxpayers). Additionally, many lenders require that buy-to-let borrowers have a minimum annual income outside of rental earnings to mitigate dependence on rental income.

Regarding the initial investment, a typical deposit hovers around 25% of the property's value. The borrowing landscape has experienced upheavals with the Bank of England's recent base rate increases. However, the average rate for a five-year fixed buy-to-let mortgage has witnessed a reduction in rates recently. For example, at the time of writing, HSBC has a 5-year BTL mortgage at 4.84% with a 75% Loan to Value (i.e. you put down a 25% deposit) with an arrangement fee of £1,999.

Prospective local landlords must judiciously consider these factors, evaluating the sustainability of their investment against potential interest rate hikes.

Understanding Costs and Preparations

The financial commitment extends beyond the deposit. Prospective landlords in Tunbridge Wells should account for additional expenses like stamp duty, which includes a 3% surcharge for second homes. Furthermore, maintaining a contingency fund for maintenance and unforeseen rental voids is prudent. It's advisable to earmark approximately 1% of the property’s value annually for repairs and upkeep.

Navigating the Buy-to-Let Landscape

Investment in buy-to-let properties is not merely a financial decision but also an emotional one. Landlords must be prepared for the demands of property management, ranging from addressing maintenance issues to dealing with tenant-related challenges. The complexity of landlord responsibilities is underscored by over 150 pieces of legislation governing the sector, a figure poised to rise with impending regulations.

Demand & Supply of Tunbridge Wells Rental Properties

Our local rental market has experienced a sustained period of significant rental inflation over the past few years. Despite that, Zoopla recently stated that demand for rental properties on its portal was 51% higher in Q3 2023 than the five-year average.

In the Tunbridge Wells area (TN1 to TN4), the numbers of properties being let over the last six years are as follows.

In 2018, an average of 152 properties were let per month 

In 2019, an average of 156 properties were let per month

In 2020, an average of 138 properties were let per month

In 2021, an average of 131 properties were let per month

In 2022, an average of 133 properties were let per month 

In 2023, an average of 143 properties were let per month 

 

 

Even though demand is higher and there’s a slight increase in properties let in 2023, the long-term supply of rental properties coming onto the market in the area has dropped. 

So, we have increased demand and reduced supply, which can only mean rents will continue to grow as they have for the last couple of years.

This ongoing imbalance between supply and demand is a consistent characteristic of the rental market throughout all regions and countries in the UK. Currently, the annual rent growth rate in the UK stands at just over 10%. It's not good news for tenants, yet it still makes buy-to-let financially viable for most landlords, especially as interest rates have risen significantly in the last few years.

Rent Adjustments and Tenant Relations in Tunbridge Wells

For landlords, understanding the regulations surrounding rent increases is crucial. These rules vary depending on the tenancy type, with periodic tenancies allowing for annual rent reviews. Ensuring transparent communication and fair practices in rent adjustments can foster harmonious landlord-tenant relationships.

The Eviction Process: A Delicate Matter

Eviction is a process governed by strict legal parameters. The anticipated changes in the Renters’ Reform Bill, particularly concerning Section 21 evictions, are set to alter the landscape, emphasizing tenant protection. Landlords must be well-versed in these regulations to navigate tenant eviction legally and ethically.

Conclusion: The Role of Expertise in Property Investment

Having a knowledgeable and experienced guide is invaluable in the intricate world of property letting. As a seasoned agent in Tunbridge Wells, I offer a wealth of expertise and insight, making me and my team an ideal partner for both novice and experienced landlords. 

Whether navigating the complexities of buy-to-let mortgages, understanding the nuances of property investment, or managing tenant relationships, our proficiency is a vital resource for anyone looking to explore or deepen their involvement in the property market. 

In conclusion, the journey to becoming a landlord, especially in a market like Tunbridge Wells, rewards careful planning, informed decision-making, and strategic foresight. With the guidance of seasoned professionals like us, landlords can navigate the challenges and complexities of the property market, ensuring their investment not only endures but thrives.

The Future of Royal Tunbridge Wells House Prices

 

In the ever-changing landscape of the Tunbridge Wells property market, predicting future house price trends can be akin to navigating a labyrinth. The past two years have witnessed unprecedented upheaval, primarily due to fluctuating interest rates that significantly impacted household finances, reminiscent of the challenges not faced since 2008.

The average rates for fixed-rate mortgages have dramatically risen, notably from late 2021. This hike in the Bank of England base rates has led to a substantial increase in monthly mortgage payments, consequently affecting people's ability to purchase new homes.

However, the Tunbridge Wells property market has

begun to show signs of stabilisation.

Recently, there's been a pause in the rise of the Bank’s base interest rate, maintaining the same rate for two consecutive months after a consistent increase since late 2021. This stability is mirrored in the mortgage sector, with lenders offering more competitive rates.

As an agent who likes to analyse the Tunbridge Wells property market, I have found it difficult to predict the market trends. 

The initial forecasts by many pundits at the start of the year saw them predicting a significant decline in property prices. Savills were expecting a drop of 10% in 2023, whilst Jones Lang LaSalle predicted a 6% drop. Yet, looking at the press in the last few weeks, these opinions have been adjusted, with recent data indicating a less drastic reduction than anticipated. This trend suggests a potential levelling out of house prices soon.

Looking locally… 

Tunbridge Wells house prices are only 3.97% lower

than December 2022.

The average home in Tunbridge Wells was £477,374 in December, and the last set of figures for August showed that it had decreased to £458,438.

Overall, these statistics look very good considering the dark clouds at the start of the year, yet four months of statistics are still left before the year ends. In measuring house prices, the Land Registry is often seen as the definitive measure of local property market house prices. The issue is the time lag in the data.

However, the Land Registry house price index can be predicted with very high certainty. The key to this forward-looking perspective lies in the sale agreed (i.e., when a property becomes sold stc) pound per square foot figures.

A meticulous examination of both the £/sq.ft at sale agreed and the Land Registry Index data over the last five years by Denton House Research reveals a robust 90.5% positive relationship between the national £/sq.ft at sale agreed and the eventual national Land Registry Index four or five months later. 

For homebuyers and sellers, this insight is groundbreaking. It means that the pulse of the property market can be gauged in advance, allowing for strategic decisions well before the official figures roll in, giving them a substantial edge in the property market.

Therefore, whilst UK house prices are currently 0.236% higher from December 2022 to August 2023, the £/sq.ft data suggests they will end the year between 0.5% and 1.3% lower.

Again, nothing like the 6% to 10% drops suggested at the start of the year by many.

What about 2024 and 2025 in Tunbridge Wells? To judge that, we must look at the national picture first. 

The first half of 2024 will see continued treading water of house prices (when some months there will be a slight increase and other months where they will dip slightly). By the end of December 2024, the net effect will show national house prices around 2% to 3% lower. 

Then, in 2025, there should be a slow and steady increase in average national house prices between 2% and 3%, with more normal rises of 4% to 6% a year by 2027/8.

Another key indicator of market confidence is the surveyor sentiment, which, although still cautious, shows signs of improvement despite the lower number of property transactions predicted for the current year compared to pre-pandemic levels.

This resilience is partly attributed to homeowners managing the increased financial strain of rising interest rates better than expected, with minimal cases of forced sales or repossessions. Financial institutions have played a role, offering flexible mortgage options and extended terms.

Another factor contributing to this resilience is the financial buffer created by savings accumulated during the pandemic. These savings have allowed many to continue their purchase plans or meet increased mortgage payments. A robust employment market and rising wages have also helped mitigate the mortgage debt burden.

The landscape for first-time buyers also appears promising, with their numbers potentially recovering more rapidly than home-movers. This trend is partly fuelled by financial support from the Bank of Mum and Dad, a contrast to home-movers who might be constrained by higher rates and larger mortgages.

The rental market, however, faces continued challenges.

Some doom-mongers have pointed their finger at the buy-to-let market as signs of an impending house price crash as buy-to-let landlords are reportedly 'dumping' their rental portfolios on the property market. 

The number of landlords selling their portfolios has indeed increased. On average, 96,700 rentals are sold by UK buy-to-let landlords yearly; the tax year ending April 2023 that had risen to 153,000 UK rental properties. Many have picked up on this in the press as an indication of a massive landlord exodus. However, it must be remembered that there are 4.6 million private rental properties in the UK, so these disposals only represent 3.32% of all the rental properties. Also, whilst fewer landlords are expanding their portfolio, buy-to-let purchases (looking at the stamp duty statistics) show that they are only 22% lower than the long-term average. Interestingly, 144,000 properties were bought for buy-to-let in the tax year ending April 2023. So overall, it's not the exodus the newspapers are saying!

Therefore, with the number of buy-to-let properties available to rent remaining roughly the same as last year but demand increasing, that has created upward pressure on rents. This situation is exacerbated by landlords’ increased mortgage costs, resulting in the need for even higher rents (as I have discussed many times in my articles recently).

So, where will Tunbridge Wells house prices be in 2028?

Subject to no further black swan events getting out of control (e.g., energy prices, Ukraine, Taiwan or the Middle East, etc.), Tunbridge Wells house prices will be between 14% and 16% higher by the middle of 2028.

This is an educated guess, yet the Tunbridge Wells property market is navigating through a period of adjustment marked by gradual stabilisation and cautious optimism. While challenges remain, particularly in the rental sector, the overall outlook for the Tunbridge Wells property market suggests a slow but steady recovery, with variations in different parts of the town and a shift in buyer behaviour. As the property market adapts, potential buyers and investors must remain attuned to these evolving dynamics to make informed decisions.

As we look ahead to the future of the Tunbridge Wells property market, I'd like to hear your thoughts. Do you agree or disagree with my perspectives? Please share your views in the comments—every opinion is valuable and contributes to our understanding.

Also, don't forget to check out my previous articles on Tunbridge Wells property market growth for more insights. Your engagement and feedback are what make these discussions genuinely insightful.

47.6% More Royal Tunbridge Wells Properties on the Market in Last 20 Months:

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How Tunbridge Wells Home Sellers are Navigating the Storm

In recent months, in certain parts of the country, the British property market has exhibited signs of cooling. 

As a result, homeowners selling their homes face increasing competition from more homes on the market.

The increase in mortgage rates has played a pivotal role in this cooling, taking a toll on potential buyers' incomes, thereby lowering affordability and demand. 

The consequence? Some previously buoyant regions, especially in the South, have experienced price corrections.  

As the market faces this colder front, local factors like the availability of reputed schools, amenities, and public services remain paramount for those looking to buy. 

The Overpricing Trap

In a tougher property market, a common strategy by some agents is to suggest you put your property on the market at an inflated price, only to encourage the homeowner to drop it months later. 

Large estate agencies have the resources to allow many listed homes to remain unsold, whereas smaller agencies rely heavily on consistent sales. Hence, the latter often propose more realistic prices to ensure they get the house sold. 

I have encountered countless Tunbridge Wells homeowners being advised to list their property at an elevated price despite their reservations. Over time, with sparse viewings and no genuine offers, they drop the asking price. The original overestimation meant a prolonged waiting period and they lost homes they wanted to buy. People like to think they are level-headed and wise to such tricks. 

So why does this happen? Remember, greed can take over when an estate agent says they can get you an extra £30k than another agent. That is why estate agents do it.

Of course, it's tempting to price your Tunbridge Wells home ambitiously. While testing the waters with a slightly higher price tag is understandable (we do it often at our agency), refusing to adjust the asking price after the first few weeks if there is no substantial interest could be a costly mistake.  

An overpriced home can stagnate on the market, leading potential buyers to assume there's something wrong with it. The longer it sits unsold, the more it becomes stigmatised.

A lack of early interest regarding viewings should be a clear signal; if there are no serious inquiries and/or offers within the first few weeks, it's imperative to reconsider the asking price. By being responsive and proactive, Tunbridge Wellshome owners can avoid the pitfalls of a stale listing and increase their chances of a successful sale and move.

So why is it so much of an issue now? 

47.6% More Tunbridge Wells Homes are on the Market Today than 20 Months Ago

 2021 was an exceptional year for people moving home. Therewere more buyers than sellers, meaning the number of properties on the market in Tunbridge Wells was reduced. Looking at the numbers… 

The number of properties on the market on 1st January 2021 in the Tunbridge Wells area (TN1 to TN4) was 1,130, but by 31st December 2021, that had reduced to 653.

By the 31st December 2022, that had increased to 701 homes for sale, a rise of 7.4% in only 12 months. 

It has continued to rise and today stands at 964 properties for sale, a rise of 47.6% in 20 months.

With the average number of sales per month in the Tunbridge Wells area 20.3% lower per month in 2023 than in 2021, with greater supply (47.6% more properties for sale) and that slightly lower demand (i.e., sales down 20.3%) … getting your asking price right is vital. 

Determining the Right Price 

Buyers and sellers can arm themselves with information about the Tunbridge Wells property market. Many online platforms provide data about sold property prices in specific areas, giving Tunbridge Wells homeowners a benchmark. Additionally, the time properties spend on the market can provide insights into an agent's efficiency (again the portals like Rightmove and Zoopla show you this). 

When selling, obtaining valuations from multiple agents and critically analysing them is vital. It's crucial to ensure that agents provide evidence to back their valuations, enabling homeowners to make informed decisions.

Rethinking the Selling Strategy

The Tunbridge Wells property market tends to shift collectively, much like boats carried by the same tide. Things are okay if you're not faced with financial losses and can manage an upgrade. Many assume continuous gains are certain when selling your home, but the real profit materialises only when you part with your final property. You may not even realise this profit directly, but it could be used later for elderly care expenses or as a legacy for your family.

Once a property is listed, attention to its online journey is essential. The initial four weeks provide insights into whether your property is priced correctly, gauged by the number of web views on the portals, actual viewings of your property and offers received.

Yet, deciding to reduce the listing price is more than just about attracting buyers; personal timelines and goals play a significant role. For instance, one might ponder: Is there a deadline by when the property must be sold? Can waiting a few months make a difference? These considerations help in making informed decisions on price adjustments.

However, it's beneficial to consider independent or boutiqueagents, like our agency in Tunbridge Wells, in a challenging market. They often tend to offer a more authentic experience and realistic valuations.  

Finally, one strategy employed by some savvy Tunbridge Wells home sellers is to list their property at a slightly lower price to spark more interest and drive up offers. 

Switching Agents or Going Online? 

With a slow property market, one’s patience can wear thin. If you are considering switching agents, sellers should evaluate the current agent's efforts and communication frequency. Another option is multi-agency agreements. However, this approach has recently declined due to associated higher fees.

With their fixed fees and remote operations, online agencies seem like an attractive option. Yet, their one-size-fits-all model can fail to capture the nuances of individual properties, making them less effective in slower property markets.

Renting as an Alternative

Renting out unsold properties is gaining traction where rent is rising. However, prospective landlords should tread carefully, considering growing mortgage interests, tax restrictions, and tenant-related challenges. Again, if that is a potential option for you, do give our agency a call.

Final Thoughts

The current Tunbridge Wells property market is complex. The recent freeze by the Bank of England base rates is a welcome pause. It won’t turn the Tunbridge Wells property market into a frenzy like the stamp duty holiday did in mid-2020, yet it is a welcome respite.

With the right strategies and awareness, Tunbridge Wellshome sellers can effectively navigate these waters, ensuring their property finds the right buyer at the right price.

If you are a Tunbridge Wells property owner, and this article has sparked any questions, do not hesitate to give the office a call.