Monday, 25 July 2022

​Royal Tunbridge Wells’ Millennials to Inherit £4.2bn From Their Baby Boomer Parents


The total value of homes owned by Baby Boomers in Tunbridge Wells alone is £4,245,254,994 - and two-thirds of the Tunbridge Wells Millennials are set to inherit all that in the next few decades!

Could this be the answer to the housing crisis?

Could Tunbridge Wells Millennials live it up for the next few decades, safe in the knowledge they will get a huge lump sum to pay off their debts and buy a house with what is left?

Before I look at that, which set of people in Tunbridge Wells exactly are the Tunbridge Wells Millennials or Tunbridge Wells Baby Boomers?

Come to that, who are Generation Z, the Silent Generation or Generation X?

All these are phrases used for the different groups of people in their various life stages of our society. 

So, splitting the groups down:

👉🏻Silent Generation: Born 1945 and before (77 years old and above)

👉🏻Baby Boomers: Born 1946 to 1964 (58 years old to 76 years old)

👉🏻Generation X: Born 1965 to 1980 (42 years old to 55 years old)

👉🏻Millennials: Born 1981 to 1995 (27 years old to 41 years old) 

👉🏻Generation Z: Born after 1996 (everyone under 26 years old)

Using data from the Census, my research shows there are …

7,446 households in Tunbridge Wells owned by Tunbridge Wells Baby Boomers and they are worth a combined value of £4,245,254,994.

The generation that will inherit those Tunbridge Wells properties will be the millennials. 

There are 7,477 millennials in Tunbridge Wells.

After looking at the local demographics, homeownership statistics and current life expectancy, around two-thirds of those Tunbridge Wells Millennials have parents who own those 7,446 Tunbridge Wells properties, meaning each is in line for an inheritance of £851,237.15.

Now that figure is just a simple average and a lot more than the value of many properties in Tunbridge Wells. A lot of that is to do the low number of millennials in Tunbridge Wells (as a proportion of the overall population) and the high number of baby boomers compared to the national average. The inheritance figure is just to show the extent of the money tied up in Tunbridge Wells property and what that could do for the younger generation. 

Yet what about Tunbridge Wells’ Silent Generation?

There are 6,779 homes in Tunbridge Wells owned by the ‘Silent Generation’, and they are worth £3,864,972,281.

The issue for those who will inherit their parents’ homes is that there are far more Generation X people in Tunbridge Wells than millennials.

Two-thirds of the 12,597 Tunbridge Wells Generation X will inherit £430,684.61 - still nothing to sniff at yet not as much as the millennials!

So, whilst the Tunbridge Wells Millennials are less likely to own their own home compared to Generation X and so have done not as well in amassing their assets and savings, they are more likely to benefit from an inheritance boom in the years to come. 

This is likely to be very comforting information for those Tunbridge Wells Millennials, including some from humbler upbringings who historically would have been unlikely to receive an inheritance. 

Nevertheless, inheritance is not the silver bullet that will get the millennials onto the Tunbridge Wells housing ladder.

Nor will it deal with the increasing wealth inequalities in British society, as the inheritance they are likely to receive won’t be accessible when they are trying to buy their first Tunbridge Wells home.

So, before all you Tunbridge Wells Millennials start running up your credit card bills, safe in the knowledge they will be paid for when your parents pass away in 20/30 years, over half of the females and around a third of men are going to have to pay for their nursing home fees. 

Remarkably, I recently read 25% of people who must pay for their nursing home fees run out of money, and therefore have to rely on funding from the local authority.

Therefore, if you are a Tunbridge Wells Millennial, no inheritance will be left for you. It goes without saying, most Tunbridge Wells parents want to give some inheritance to their children.  

Yet if waiting until you pass away to help your children or even grandchildren with your legacy could be seen as too late, so what are the options?

One solution to help and fix the housing crisis in Tunbridge Wells (and the UK as a whole) is if parents and grandparents, where they can, help financially with the deposit for a house whilst their children/grandchildren are in, say, their 20's and early 30's. 

Buying a Tunbridge Wells property is much cheaper than renting – I have shown it many times in these articles. 

It’s not a case of not being able to afford the mortgage; the problem is raising the mortgage deposit (of 5% to 10%) for these Tunbridge Wells Millennials.

Maybe families should be discussing the distribution of family wealth whilst everyone is alive (in the form of helping the family with house deposits) as opposed to waiting until the end, as it will make a massive difference to everyone in the short and long run. 

And a final thought, your legacy will have a more significant impact, and you will be here to see it with your own eyes.

A win-win for everyone.


Friday, 15 July 2022

​Royal Tunbridge Wells Starter Homes are 43.8% Cheaper Today Than in 1989




Even though the average value of a Tunbridge Wells first-time buyer property has risen by

331.8% since 1989 to £448,070, the monthly payments Tunbridge Wells first-time buyers

must make on their mortgages as a proportion of their take-home pay is 43.8% less today

compared to 1989.


Today, according to the Nationwide Building Society…


the average Tunbridge Wells first-time buyer only needs to pay out

41.6% of their household take-home pay on their mortgage

payments, compared to 74.1% in 1989 (i.e., just over two fifths less).


You might say 1989 was 33 years ago, a long time ago and not relevant to today. I would

agree.


So next, I looked a little closer to home, and in 2007…


the average Tunbridge Wells first-time buyer had to spend 49.5% of

their household income on mortgage payments (i.e., 15.8%

proportionally cheaper than today).


So why do I say all these things?


Last month, the Bank of England revealed that its Financial Policy Committee would be

removing their mortgage market affordability test on people taking out mortgages in

August.


The test was introduced in 2014 to ensure the UK didn’t have a repeat of the 2008 Credit

Crunch and particularly hit first-time buyers with what they could afford to buy. This rule change means Tunbridge Wells property buyers could soon be able to borrow thousands of pounds more and purchase larger homes.


The decision to withdraw the affordability test certainly raised eyebrows in the press,

primarily as the Bank of England has raised interest rates five times in the last six months to

try and reduce rising inflation. Yet, as stated in the first part of this article, Tunbridge Wells first-time buyers are comfortably paying their mortgages compared to previous years –

therefore everything should be ok with this rule change.


The old rules tested home buyers on mortgage repayments if interest rates rose to 6%/7%,

yet the Bank thought that rule was too harsh. Not all rules have been changed, as the important Bank of England ‘loan to income ratio’ stays put.


The Bank were keen to stress that the mortgage market was not going to turn into a free-

for-all, as it did in the mid-2000s when the likes of Northern Rock were offering 125%

mortgages, and a sixth of all UK mortgages were given without proof of income.


I believe it will have a progressive effect on the Tunbridge Wells property market.


Many Tunbridge Wells tenants who have been paying rents far more than actual mortgage payments for the same Tunbridge Wells home, but have failed affordability assessments regardless, will now be able to get on the property ladder.


The rule change should open the Tunbridge Wells property market up a little more and

allow house prices to grow in Tunbridge Wells.


I advise anyone who has been refused a mortgage on affordability in the past to speak to a

mortgage arranger. If you don't know of one, drop a message to me, and I will give you

details of mortgage arrangers you could talk to.


Monday, 27 June 2022

26.3% of Royal Tunbridge Wells Property Sellers Reduce Their Asking Prices as the Property Market Equilibrium Starts to Return


 

• 178 of the 676 properties on the market in the Tunbridge Wells area have had a price reduction in the last 3 months.
• The average reduction has been 5.6% of the original asking price.
• This is great news for Tunbridge Wells home buyers and Tunbridge Wells buy-to-let landlordsstrangely Tunbridge Wells house sellers as well. 

 

The last couple of years of the Tunbridge Wells property markethas seen some amazing prices being achieved with multiple offers and many properties selling for way over the asking price. 

 

Yet, as I have been writing about the Tunbridge Wells property market over the last few weeks, the tide is beginning to turn, and pendulum swing more towards a balanced Tunbridge Wellsproperty market as more homeowners in the Tunbridge Wells area (TN1 – TN4) have been reducing their asking prices. 

 

Of the 676 properties for sale in the Tunbridge Wells area,

178 have been reduced in price in the last 3 months.

 

This can be broken down as follows…

 

 

Price Range of the Tunbridge Wells Property

Number of Price Reductions in Last 3 Months

£100k-£150k

11

£150k-£200k

12

£200k-£250k

22

£250k-£300k

13

£300k-£350k

13

£350k-£400k

25

£400k-£500k

25

£500k-£600k

19

£600k-£750k

9

£750k-£1m

17

£1m-£2m

8

£2m-£3m

1

£3m-£5m

3

 

 

So why is this important and why is this good news, even for Tunbridge Wells house sellers?

 

Property industry statistics show that 5 out of 6 house sellers will buy another property and over 80% of those sellers will move up the property ladder.

 

When you move up the property ladder, that normally means you pay more for the one you want to move to (that’s why it’s called the property ladder).

 

So, whilst you wont be getting as much for yours as you might have done earlier in the year, you wont have to pay as much forthe one you want to buy (and the price difference between the two properties will be smaller – meaning you will end up saving money because of these reductions). 

 

Therefore, what is the level of reduction being seen in the Tunbridge Wells property market?

 

The average percentage of the price reduction in the

Tunbridge Wells area has been 5.6%.

 

I must stress house prices/values in Tunbridge Wells haven’t dropped 5.6%, just the asking prices of some of the properties on the market.

 

This is good news for Tunbridge Wells first-time buyers and landlords, as they will be more likely to buy a property at a more reasonable price whilst. As I explained above, this is also good news for sellers as most of them will end up paying less for thehigher priced property they end up buying after selling theirs.

 

So, what should Tunbridge Wells homeowners be aware of if they are selling their home now oin the future?

 

For me it is important that I inform all Tunbridge Wells property owners of the real story. This enables them to judge for themselves where they stand in the current Tunbridge Wells property market, thus enabling them to make better informed decisions.

 

You see some Tunbridge Wells estate agents will deliberately over inflate the suggested initial asking price to the house seller, because it gives them a bigger chance to secure the property on that agent’s book, as opposed to a competitor.

 

This practice is called overvaluing. 

 

Now of course, each Tunbridge Wells homeowner wants to get the most for their homeyet some estate agents know this and prey on those Tunbridge Wells house sellers. 

 

You might ask, what is the problem with that?

 

Well, you only get one opportunity at hitting the Tunbridge Wellsproperty market as a new property. Everybody has access to the internet, social media and the four main property portals (Rightmove, Boomin, OThe Market, Zoopla), and your potential buyers will know the property market like the back of their hand. 

 

If you have a 2-bed Tunbridge Wells semi that is on the market for a 3-bed Tunbridge Wellssemi-detached house price ... those Tunbridge Wells buyers will ignore you.

 

Your Tunbridge Wells property will stick on the market as yourpotential buyers keep seeing your property on the portals each week.

 

These buyers will then start to believe there is something wrong with your property and dismiss it even further. That is until you, as the house sellerreduce your asking price. The issue is that sometimes these buyers will think something is wrong with your home and could bid you down even further, meaning you will get less even though you asked for more! (This was backed up by some research done by Which?).

 

Now according to research by Denton House, the average British house buyer only views around six properties before buying – so please don’t assume viewers will come round your optimistically priced (i.e., overvaluedTunbridge Wells home, thinking they will knock you down quite the opposite - they just wont view your home in the first place.

 

And you know that because I bet you have done the same yourself when searching for property.

 

So, all I suggest is this ... be realistic with your asking price to start with.

 

Do that and you will sell your Tunbridge Wells property at a decent price to a decent buyer ... first timeevery time - enabling you to move onto the next chapter of your life. 

 

If you know of anyone currently selling their home in the Tunbridge Wells area and finding things difficult, please share this article with them as it could be of interest.

Friday, 10 June 2022

What Was the Average Royal Tunbridge Wells House Price in 1952?


Well, what a weekend the Jubilee was. Street parties, gatherings in the park, the purple buntingegg and cress sandwiches, union jack flags, cheese and pineapple on cocktail sticks, and let's not forget the trifle – the Platinum Jubilee Party.  And no decent party is worth its salt without a game or a quiz.

So, if you have post-Jubilee blues, let me ask you, how much was the average Tunbridge Wells house worth in 1952?

To start with, let me look at what a property is worth today in Tunbridge Wells.

The average price paid for a property in the Tunbridge Wells arein the last 12 months was £531,440. 

Now, let's go back to 1952. Sir Winston Churchill was the Prime Minister, Newcastle won the FA Cup, London was covered in the Great Smog, free prescriptions on the NHS ended (it cost 1 shilling or 5p in new money), and King George IV, at the age of 56 passed away on the 6th February, meaning Princess Elizabeth became the Queen - as for housing

The average price of a Tunbridge Wells home in 1952 was £4,339.

This means Tunbridge Wells house prices are 121 times higher since 1952. 

Yet over the last 70 years, the country has been subjected to 4.5% per annum inflation.

The 1952 Tunbridge Wells home is equivalent to £83,448 today when adjusted for inflation.

This means Tunbridge Wells house prices have increased by 504.8% in real terms since 1952.

So, does that mean house prices are more expensive today compared to 1952?

In 1952, the average annual male wage was £452, 8 shillings and 1 pence, meaning the average Tunbridge Wells house was 9.59 times the average wageToday the average home is 8.85 times the average wage.

Yet let us not forget the average mortgage payment in 1952 was £11 per month. The average Brit earned £34 per month, meaning 32.3% of the household income was going on mortgage payments, whilst nationally today, according to the Nationwide, it stands at 28%. 

It's cheaper, in real terms, to buy a property in 2022 thain 1952.

 And that’s the point, some things in real terms (real terms being true spending power of the money after taking into account wages, costs and inflation) were more expensive and some cheaper 70 years ago. For example, in 1952, petrol was equivalent (in today’s inflation-adjusted prices) to £1.02 per litre, a pint of beer £2half a dozen eggs £2.20cheddar cheese £2.40 per 500g, a basic radio £430, a Hoover £530 and a 12-inch TV £1,600.

So back to property, the Queen’s reign has seen some amazing house price rises in the UK, yet that growth hasn’t always been in constant upwards direction as we have had a couple of dips along the way.


We had a house price crash in 1990, when the average value of a Tunbridge Wells property dropped from £130,582 to £108,147 in 1996, only for them to start rising again.

 

Tunbridge Wells saw another house price crash between 2008 and 2009, and the average house price dropped from £390,627to £333,015 in a year.

 

So, what else has changed about property and housing since the Queen came onto the throne?

 

In 1952, only 32% of people owned their own home, whilst 50% of people rentedfrom private landlord and 18% rented a council house.

 

By the time of the Silver Jubilee in 1977, 56% of people owned their own home, with 12% of people privately renting and 32% rented from the council.

 

Come the Golden Jubilee in 2002, 70% of people owned their own home, with 11% of people privately renting and 19% rented from the council.

 

Today, 63% of people own their own home, 20% of people privately rent and 17% rent from the council.

 

So, to conclude, as we look forward into the 21st century, I am sure the property market will be totally different again in 70 years. 

 

I hope you enjoyed reading this article and do share it with your friends if you find it interesting.

 

PS for all you Rightmove fans, the average Tunbridge Wells apartment in 1952 was worth £2,388, and a terraced home in Tunbridge Wells could be bought for on average £3,557.