Sunday, 5 December 2021

With Royal Tunbridge Wells Tenants Deposits Totalling £7,065,960, How Will ‘Lifetime Deposits’ Change the Local Rental Market?



The Government’s scheduled publication of their White Paper for the Renter's Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022. 

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.


In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both landlords and tenants? 


When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home. 

The average deposit for a Tunbridge Wells rented home stands at £1,320

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn't need to save for an additional new deposit every time they move home.

Now, of course, it's vital that any new ‘deposit scheme’ does not dissuade Tunbridge Wells landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it.   

So how would Lifetime Deposits work?

There would need to be some form of system safeguarding that the new landlord is protected by a whole deposit, even if the deposit on the old home comes into dispute. 

This will be critical and central to landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

What about the existing system of deposits?

The rules regarding the amount of deposit held by a landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit. 

The deposits tenants have had to save for certainly raises the cost of renting a home. 

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many local renters. To give you an idea of the level of deposits held for Tunbridge Wells rental properties …

The total of all the tenants’ deposits in Tunbridge Wells is £7,065,960.

Yet the other side of the argument contends that if the Tunbridge Wells tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitors and any improvement works from the tenant trashing the place.

Does a deposit of just over one month provide Tunbridge Wells landlords with a decent level of protection against unpaid rent or damage to the property? When you consider …


The total value of all the privately rented properties in Tunbridge Wells is £2,819,157,450


Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Tunbridge Wells landlord is vital. 


So, what are my thoughts on ‘Lifetime Deposits’?


It is my opinion the common need for Tunbridge Wells tenants to stump up a ‘two-fold deposit’ is not helping many renters when moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century. 


One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years. 


Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week's rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.


Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?


We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.


Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024).  

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn't pay the rent?

Of course, a handful of Tunbridge Wells landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced.  

However, this will reduce the supply and availability of Tunbridge Wells rental properties, meaning rents will rise (classic textbook supply and demand), thus, landlords return and yields will rise.



Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30s. 

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Tunbridge Wells and enjoy those higher yields and returns. Isn't it interesting that things mostly always go full circle?



Saturday, 13 November 2021

Would You Re-Mortgage Your Royal Tunbridge Wells Home to Help Your Child onto the Property Ladder?

How far would you go to help your child get on in the world?

Many Tunbridge Wells parents move area to ensure their child gets into the best primary school or fund their university costs. Many of you reading this have even helped your children with the deposit for their first home from savings.

However, I have come across many Tunbridge Wells people in their 50’s and 60’s, who have good jobs and incomes, yet don’t have the savings to give to their children to help them buy their first home. It doesn’t help when you consider …

The average value of a Tunbridge Wells home has risen by 12.1%

in the last 5 years, from £468,635 to £525,200.

I am therefore seeing increasing numbers of parents who are willing to re-mortgage their own Tunbridge Wells home or start a new mortgage (when they own their home outright) — to get their children onto the Tunbridge Wells property ladder.

So, whilst the Government is trying to turn Britain’s 20 and 30 somethings from ‘Generation Rent’ into ‘Generation Buy’, the Bank of Mum and Dad are mortgaging their retirement to pay for it all. Yet it need not be cost prohibitive borrowing the deposit as you still have access to interest only mortgages.

With an interest only mortgage, your monthly mortgage payment covers only the interest on your mortgage, not any of the original capital borrowed. This means your mortgage payments will be lower than on a repayment mortgage, remembering though at the end of the term you will still owe the original amount you borrowed from the mortgage provider.

1 in 14 new mortgages are interest only and 1 in 5.5 existing mortgages are interest only mortgages, they are very popular.

Anyway, many Tunbridge Wells homeowners might be worried about having that level of debt in their golden years. However, many plan to pay off the mortgage when they downsize as they get into their 60’s and 70’s.

I talk to many Tunbridge Wells homeowners, who are asset rich but cash poor and desire to help their children onto the Tunbridge Wells property ladder. Their attitude is their children will inherit their property when they pass away, so it seems practical to give them that money to work harder for them earlier in their life when they need it to buy their first home.

Can you get a mortgage, even if you are retired?

A lot is dependent upon your age and financial position. The mortgage companies will see if you have adequate funds for your retirement and emergencies plus leaving enough equity in the property to enable you to downsize in the future. Like all things, you need to take advice from a qualified mortgage arranger.

So, that then begs the question, is there enough equity in Tunbridge Wells homes to borrow against?

In the late 1980s and again in the early 2000s, many Brits saw their homes as a cash machine. Numerous homeowners re-mortgaging at the end of their mortgage’s preliminary term (usually after the initial 2, 3 or 5 years), but when doing so increased their mortgage to enable them to buy a nice car or fancy holiday. Yet, by increasing the borrowing, it created negative equity in the early 1990s and stopped many homeowners moving home between 2009 and 2013 because of their lack of equity.

Therefore, I have to ask, have we borrowed too much this time round?

Looking at Tunbridge Wells and the specific postcodes TN1, TN2, TN3 and TN4 combined ...

In 2016, the average Tunbridge Wells homeowner had a mortgage of £169,506 and today it is £213,789, a rise of £44,283.

Looking at these numbers, one might think we are again over-extending ourselves, yet as regular readers of my blog about the Tunbridge Wells property market will know – I like to drill down and look at all the figures.

Initially, I was worried about these stats, until I considered the equity Tunbridge Wells people have amassed over the same 5 years.

In 2016, the average equity held in a Tunbridge Wells homeowners’ property (whilst still having a mortgage) was £299,129, yet today that stands at £311,411, a rise of £12,282.

Even though mortgages have increased, Tunbridge Wells homeowner’s equity has risen even more, meaning as we stand today, mortgaged and owned-outright properties, there is …

£15,936,969,530 of equity held in all Tunbridge Wells homes.

Whilst the total value of mortgages has increased slightly since 2016, as a percentage, this has gone down meaning Tunbridge Wells homeowners and Tunbridge Wells landlords have increased their equity in the last five years.

It can quite clearly be seen that the financial insecurity sparked by the Credit Crunch crisis of 2008/9 has created a generation of Tunbridge Wells homeowners and landlords who are savers and improvers rather than movers and excessive borrowers, using excess cash to invest in their property and pay down debt or to excessively borrow on their equity growth.

Only 15.85% of the total value of Tunbridge Wells property

is borrowed money with a mortgage.

This is great news for every Tunbridge Wells homeowner and landlord because irrespective of whether the ‘Post Lockdown Bounce’ is short or long-lived, it shows the Tunbridge Wells property market is in a better state to ride out any storm that it might encounter than ever before because less people will be in negative equity or have prohibitively high mortgages.

Before I finish, I fully appreciate money and inheritance is a sensitive subject for many families.

My message to all the Tunbridge Wells parents is, just because your children aren’t talking about the subject, it doesn’t mean it’s not on their mind.

The lead has to come from you, as a Tunbridge Wells parent, to ensure the wealth held in your bricks and mortar can be used to your family’s advantage, when they need it most.

If you do, your children will thank you for it and they may even do exactly the same for their children, then, they will do the same for their children’s children ... creating a legacy that will go on for generations.

Wednesday, 10 November 2021

Has Buy-to-Let Changed the Royal Tunbridge Wells Property Market?

 

The ‘Buy-To-Let’ Mortgage is celebrating its Silver Anniversary (25 years) this autumn. 

Isn’t it fascinating that a decision between a group of letting agents and bankers all that time ago to offer ‘Buy-To-Let’ (BTL) mortgages has changed the face of the Tunbridge Wells (and national) property market?


But has it been a good thing? Or has it ruined the dreams of many 20 somethings wanting to get on to the property ladder in the last couple of decades?


Let’s look deeper at the whole story, then I will let you, the reader, decide.


As soon as the BTL mortgage was launched, it was clear there was an enthusiasm and a need for this mortgage product. So much so the size of the Tunbridge Wells private rented sector has grown exponentially.


According to my analysis…


there are 5,353 private rented homes in Tunbridge Wells,

worth £2,888,639,000.


So now we are in 2021, it seems farcical that banks and building societies once thought that properties rented out to private tenants would not create a steady income or increase in value, yet this thought was conventional back in the 1990s. 


It’s no wonder BTL landlords have been given a hard time, with numbers like this. 


Yet before we burn every landlord at the stake,
let’s just look at the background story.


The Conservatives introduced the right of a council house tenant to buy their own council house in the early 1980s. Fantastic news for council tenants, yet when a council tenant bought their home, that meant that council housing was taken away from future generations to rent and therefore eroding the council housing stock available. Meaning from the mid 1990s /early 2000s, people who would normally be eligible to rent from the council, yet who couldn’t buy, had only one option … rent from a private landlord.


Meanwhile, in the early/mid 1990s we had 15% mortgage interest rates, unemployment rates of 9% and the 1989 housing crash fresh in people’s memories. Repossessions were rife, making home ownership not the most attractive prospect for 20 somethings. 


Tunbridge Wells house prices dropped by
30.7% between 1989 and 1993.


This meant as we entered the mid 1990s, the local property market entered a period of stagnation. There were many Tunbridge Wells homeowners that bought their home in the property boom of the late 1980s who were disinclined to sell their home for a loss. They were in negative equity (i.e. they owed more than what the house was worth) yet needed to move because of their growing families. 


Renting their home out could have allowed them to buy another home for their growing family, but most banks and building societies were still mostly unreceptive to the notion of these homeowners becoming accidental landlords. Most mortgage terms and conditions usually included clauses that prohibited homeowners from renting out their homes. 


So, with growing demand from potential tenants, supply reduced from the sale of council houses and many homeowners in negative equity, all bound up by the semi-deregulation of the private rented sector with the Housing Act 1988 – you can see that the BTL mortgage came along at the right time.


Early take up of BTL mortgages was slow in the first couple of years.


By the Millennium, according to the Council of Mortgage Lenders, there were just over 120,000 BTL mortgages, with a total value of £9.1 billion.


Yet as we entered the 2000s, they really took off, with every man and his dog jumping onto the BTL bandwagon. So much so that today in the UK, there are…


4.4m private rented homes, 2.1m of them with BTL mortgages
 totaling £234.1bn, which is 11.9% of the UK’s GDP!


That’s more than a 1,650% increase in the number of BTL mortgages to landlords and a 2,470% increase in the value of those BTL mortgages. 


Since 2001, the number of privately rented households in the UK has grown from 8.3% to 19%.


On the face of it, you could say with the growth of these BTL landlords with their cheap BTL mortgages and often unkempt properties, it has pushed potential homebuyers into squalor. Yet, let’s look a little deeper.


Most Tunbridge Wells landlords are very fair with their tenants providing them with clean, well presented and affordable housing. Of course, there are the rogue landlords but with TV shows such as ‘Landlords from Hell’, the British public are given a distorted and uneven view of private landlords as a whole.

Private sector landlords have played a critical role in providing homes to millions of Brits in this country, let me expand.

The UK population has grown by 405,000 people per year (for the last 20 years), yet only 22,750 council/social houses have been built per year in the same time frame.


If it wasn’t for the rented sector, who would have housed all the extra people in the country over the last 20 years?  


What about the exorbitant rents? Would it surprise you that rents have risen below inflation between 2008 and 2019? 


Also there has been a drive to tax BTL landlords more comprehensively and regulate the private rented sector to develop better housing conditions 
for tenants.


Unlike owner-occupier homes, tenants get the benefit of new regulations from Gas Safety Checks and Electrical Safety Reports. Also, BTL landlords will need to improve their Energy Performance Certificate Rating to at least a C rating by the end of 2025 for all new tenancies, and by end of 2028 for all existing tenancies, all at no cost to the tenant and directly saving them money on their heating costs – something that is very important considering the recent rises in gas prices. 


Tunbridge Wells landlords have also had to pay more tax on their BTL properties, paying 3% Stamp Duty tax supplement for the last 5 years, and higher rate tax relief on mortgage interest was taken away four years ago.


Landlords have also had to deal with the financial fallout of the pandemic. It is estimated 1 in 5 tenants in the private rented sector have some form of rent arrears. 


Interestingly landlords that don’t use a letting agent to manage their property are 272.5% more likely to be 2 months or more in arrears.


Also, evictions for rent arrears were banned during the pandemic, meaning some tenants ran up arrears of 12 months or more. According to the National Residential Landlords Association (NRLA), this has left around 210,000 private tenants in the country facing a court order for rent arrears. That would equate to…


287 Tunbridge Wells private rented households
with a court order for arrears.


The idea that Tunbridge Wells landlords are middle-class establishment types who are out to take advantage of tenants who can’t afford to buy their own homes is, in my opinion, just wrong.


Of course, there are some rogue landlords, yet there are plenty of rogue tenants. Just because you are a landlord in the area, it doesn’t mean you are quaffing champagne and rolling in cash.


961 Tunbridge Wells landlords own just one BTL property.


And just under half of those use their rental income to supplement their pensions, and according to the NRLA, a third of landlords have a gross income (excluding income from the BTL property) of less than £20k per annum.


It’s hard work being a Tunbridge Wells BTL landlord and I still believe the burden of housing just under a fifth of the UK population isn’t appreciated or taken seriously by Government.


Notwithstanding the challenges, most BTL landlords are in it for the long run. BTL mortgages can be secured for less than 1% and demand is on the rise (with rents rising at the highest rate for 10+ years). Of course, Brexit caused a few issues with some  landlords losing some Eastern European migrants. Yet once things settle down, we will have an influx of people coming from Hong Kong and Afghanistan, wanting to settle down, get jobs and ultimately require a home to live in, which will be a private rented house.


I know the Stamp Duty tax holiday has cleared out the landlords who were on the fence for staying in the private rented sector or selling up, but those landlords that are left will be more professional and will run their BTL portfolio as a business, not a hobby.


My final piece of advice to anyone thinking of becoming a BTL landlord in Tunbridge Wells for the first time is that you have to have a strategy and plan ahead. Those who stumbled into the BTL market in the early 2000s made a lot of money without any strategy or tactics. 


Moving forward you need the guidance and support of an agent who can tell you the best places for investment, be that for better yield or better capital growth. 


They will also be able to tell you what tenants demand to ensure that you attract the right sort of tenants who won’t trash the place and leave you in arrears. If you would like some advice, do not hesitate to drop me a line or pick up the phone.



Monday, 18 October 2021

Royal Tunbridge Wells Homeowners to be Made Homeless?



The number of properties for sale in Tunbridge Wells has fallen by 45% since this time two years ago (October 2019). One of the reasons is that many Tunbridge Wells buyers feel overwhelmed and fearful they will be made homeless if they sell their home and can’t buy another. So, I have decided to look again at the facts and give them to you in greater detail in this article.

My research has found the number of Tunbridge Wells properties for sale started to decline last autumn (2020).

Nationally, the same story is being written as the average UK estate agency office now has around 16 properties on their books to buy, compared to 43 a couple of years ago.

So why is this an issue? Many Tunbridge Wells homeowners are wanting to move home and are worried they will put their current home on the market, it sells quickly and then be unable to find another home to buy – thus they believe they will then be making themselves homeless.

The fact is that most Tunbridge Wells home buyers need to sell before they can buy their next home, meaning they need to place their property on to the Tunbridge Wells property market before they can buy their next home.

Yet because of the low supply of properties for sale and the current high demand, there is an imbalance in the Tunbridge Wells property market. This means some Tunbridge Wells house sellers are nervous to put a ‘for sale’ board outside their house.

So, let me look at the Tunbridge Wells numbers in greater detail. According to the three main property portals (Rightmove, Zoopla and On-The-Market) …

In October 2019, there were 885 properties for sale in Tunbridge Wells. Today, there are only 490 properties for sale, a reduction of 45%.

When I break it down into bedroom numbers and type it gets even more interesting (note things like building plots and part commercial/part residential etc., won’t be in these numbers so the stats below won’t precisely match up to those above). 


.. and when I looked at the type of properties ... it got even more interesting …



As you can see, there have been some interesting changes in the number of properties on the market in Tunbridge Wells over the last few years, depending on the type and the number of bedrooms, yet all types of housing are down considerably.

So, if Tunbridge Wells homeowners do sell, will they be made homeless if they can’t find their next ‘forever home’?


The answer is quite simply ... NO!

Tunbridge Wells properties are coming on to the market all the time, yet the buyers have got to be in the game, in it to win it so to speak. If you keep looking at properties, without even having your property on the market, let alone sold (subject to contract), then you will fall into a self-fulfilling prophecy of not being able to buy another home and will always be chasing your tail.

And it’s those magic words of “subject to contract” that are your get out of jail card.

The average time taken from agreeing a sale to it being legally binding (i.e. exchange of contracts) is about 19 weeks. 

During those 19 weeks, you are ‘sold subject to contract, which means you have four or five months to find your new home and the likelihood of not finding your next forever home is very small. 

And even if you can’t find anywhere, you will never be homeless as the sale is not legally binding until you exchange contracts, so you can withdraw from the sale up to that point, without penalty. 

One final word of advice to all Tunbridge Wells home movers. 


Around 6 in 7 Tunbridge Wells homebuyers could
have missed their ‘forever home’ in 2020/21.


Let me explain, in a study of various UK estate agents 84.8% of homebuyers were not on the estate agent's mailing list before they contacted the agent to view the home according to Denton House Research. 


Yes, 6 out of 7 buyers (84.8%) waited until the property came on to the market on one of the portals (e.g. Rightmove, Zoopla or On The Market) before asking to view it. But would it surprise you that depending on the location and type, up to one in five houses don’t actually make it on to the portals for sale.


This means if the homebuyer hadn’t registered themselves on the agents mailing list, they would’ve missed out on their ‘forever home’, because they would not have known the property was for sale until it was too late.


Quite simply, if you are serious about moving home in Tunbridge Wells, get yourself on the mailing lists of all the agents in Tunbridge Wells. 


Sunday, 26 September 2021

Royal Tunbridge Wells Buy-to-Let Market on the Rise as Returns Rise by 30.9% in 5 Years


Tunbridge Wells landlords are becoming progressively more self-assured about expanding their rental portfolios; as Tunbridge Wells rents rise, mortgage interest rates fall and demand for decent Tunbridge Wells rental properties outstrips supply.

A number of reports nationally would suggest around a third of UK ‘portfolio’ landlords (i.e. landlords with more than one rental property) are actively looking to expand their rental portfolios in the next 12 to 18 months, that would locally mean…

712 Tunbridge Wells ‘portfolio’ landlords are looking to add to their rental portfolio by the end of 2022.

The pandemic has had a substantial change to what we want from a home. Many people think that relates just to homeowners, yet nothing could be further from the truth as it also applies to tenants.

Homeowner or tenant, many of us have spent a lot of time away from places of work. Many office workers face the outlook of the combination of working from home as well as at the office, meaning a change in what people look for in their home. People (including tenants) are looking for larger properties, with extra rooms for office space and decent sized gardens or to be closer to outside green space.

So, let’s look at the ‘scores on the doors’ as to why Tunbridge Wells landlords are on the up…

Tunbridge Wells house prices are 9.7% higher than 5 years ago.

Because some Tunbridge Wells first-time buyers are being priced out of the market due to these house price rises, they are being forced back into the rental market. Add the extra demand of the 1 in 10 Tunbridge Wells house sellers, who in the last 12 months have had to go into rented accommodation instead of buying, and this has created increased demand. Meaning…

Rents today in Tunbridge Wells are 5.7% higher than a year ago and 21.2% higher than 5 years ago.
The average rent of a Tunbridge Wells property today is £995 pcm.

In previous articles on the Tunbridge Wells property market, I was talking about the lack of properties to buy – yet that issue is also there in the British rental property market. Now let’s look at the supply of rental properties.

Would it surprise you that the number of private rented homes in the UK has fallen in the last 12 months by just over 2.5%?

Why? One reason has been many ‘accidental’ landlords have used this housing market to sell their property for a good price. That means the supply of available rental properties has decreased. The perfect storm of increased demand and lower supply, and with many Tunbridge Wells tenants competing for those larger Tunbridge Wells homes, they may find Tunbridge Wells rental prices pick up even more over the next year.

What about buy-to-let mortgages for Tunbridge Wells landlords?

The banks all but withdrew from buy-to-let lending in the first lockdown. Yet, since last summer, things have settled down and during 2021 there has been a mortgage price war.

Tunbridge Wells landlords can borrow 60% of the value of their BTL property on a two-year fixed rate of 1.18% from Platform and even those with a 20% deposit (that’s borrowing 80%) can borrow that money at 2.49% 2-year fixed rate from The Mortgage Works. Those looking to fix for a little longer can get 1.44% from The Mortgage Works and 1.79% at 75% loan to value from Santander.

(It must be noted there are some fees to these mortgages, and you must take advice from a qualified mortgage advisor before deciding which mortgage is best for you).

So, is now the best time to invest in Tunbridge Wells buy-to-let property?

If you are attracted to invest in Tunbridge Wells buy-to-let, it’s vital to do your homework first – particularly if you are new to the game.

When estimating the expected rental returns on investment, capital growth and yields, many Tunbridge Wells landlords look to what has happened with house prices and rental prices, yet past performance does not always deliver a future guaranteed return.

Smart Tunbridge Wells landlords will speak with agents like myself and others in Tunbridge Wells, prudently researching the Tunbridge Wells property market to discover what types of properties are in high demand (and short supply) from tenants.

Whether you are a landlord of ours or not, please feel free to drop me a line via email or social media for no nonsense advice on the important matters to look out for before investing in Tunbridge Wells buy-to-let

Thursday, 9 September 2021

Royal Tunbridge Wells Homes Asking Prices Down 1%

With Rightmove announcing a national drop of 0.3% in average asking prices in August, some are asking if the steam has been let out of the property market. Yet with the gains we have seen in the last 12 months, is this just a minor bump in the road? Alarm bells normally ring when new homeowners coming to the market for the first time are having to lower their initial asking price when compared to the market as a whole.

So, what is actually happening in the national and local property market to asking prices and the number of properties for sale, and where does that leave Tunbridge Wells homeowners and Tunbridge Wells landlords?

1 in 7.4 homes already on the market today have reduced their asking price in the last two weeks

That means new sellers bringing their property to the market for the first time, are having to curtail their initial asking price to remain competitive. Normally, this should ring alarm bells, particularly when this is the first time this has happened in 2021. Therefore, it’s vital to ‘look under the bonnet’ of the figures and see what, exactly, is happening locally.

Average asking prices for Tunbridge Wells homes are 1% down compared to July.

However, that figure hides some interesting anomalies - the average asking price of Tunbridge Wells detached houses are 3% lower than in July (that doesn’t mean they have dropped in value by that much – just the headline asking prices) whilst semi-detached properties have seen the average asking price rise by 5% in the last month.

So, if this is what is happening to Tunbridge Wells asking prices, what about the number of properties for sale. Looking nationally first…

there are currently just 285,970 properties for sale in the UK, which means 1 in 67 British homeowners are presently on the market – interesting when compared to 2005, it was 1 in 13.5 homeowners on the market.

With such little supply of properties for sale nationally, demand remains robust. Yet the property buyers in the market are being a little more reserved with the offers they are making compared to the Stamp Duty holiday frenzy times seen earlier in the year. They will pay handsomely, and yet top dollar won’t offer the ‘crazy price’ levels some Tunbridge Wells buyers were offering in the spring – hence the recent reduction in asking prices to a more realistic level.

Looking at the movement in the available properties for sale and to rent in Tunbridge Wells over the last few months, an interesting picture arises.





The number of Tunbridge Wells properties for sale (and rent) is still at record lows when compared to the 30-year long term average.

The choice for Tunbridge Wells tenants is limited as well, as many tenants aren’t moving home. With the additional increase in demand from 1 in 10 Tunbridge Wells homeowners choosing to go into rented accommodation (albeit temporarily) Tunbridge Wells landlords with exceptional properties are getting decent rents, as discussed in a recent article I wrote about the level of rents in Tunbridge Wells.

With the current level of Tunbridge Wells properties for sale being around 40% to 50% below the long-term average (depending on the type of Tunbridge Wells property you own),

it means when a Tunbridge Wells property is properly priced, given the intense competition, often it comes down to the position of the buyer and not the price they are prepared to pay.

When I say, “position of the buyer”, I mean, do they have a chain, do they have to sell their own property to buy another property?

Many Tunbridge Wells house sellers are selling their home before they buy. Selling before you buy can be a fruitful approach in a fast-moving property market. That does mean your own purchaser will have to demonstrate a certain amount of patience whilst you wait for the right home to come on to the housing market.

However, because it is currently taking on average 19 weeks between sale agreed and exchange of contracts, with mortgage providers and solicitors taking their time due to the backlog, this often allows you to potentially play catch-up if it takes a couple weeks to find the right property for you.

Many home sellers are going even further by selling their Tunbridge Wells home first and then going into transitional rented accommodation. This subsequently puts them in pole position when their forever home comes up for sale as they have no chain. Although this takes a lot of determination and resilience, it does mean you will be in the very best position when the property of your dreams comes up.

The choice they say, as always, is yours!

If you would like a chat about the Tunbridge Wells property market and the best thing for you and your personal circumstances, do drop me a line. In the meantime, what are your thoughts on the current Tunbridge Wells property market? Do share in the comments.












Saturday, 28 August 2021

How Many Days Does It Take to Sell a Royal Tunbridge Wells Home?


Whether you are a Tunbridge Wells homeowner, first-time buyer or landlord; the last 15 months has been a roller coaster ride when it comes to the Tunbridge Wells property market.

With 213,120 UK house buyers and 58,580 UK tenants moving home in June, the summer has been manic for many people. Meaning some homeowners are asking if they should be staying put? Or should they wait for the best home to come onto the market before putting their home up for sale or find a buyer but be unable to find a property – it’s all rather confusing.

Then we have some landlords in the area who are asking themselves if they should buy another property investment (and some even wondering if they should sell and cash in on the boom) and then finally, with 95% mortgages back, first-time buyers are asking if they should look to take the plunge and buy their first home or wait.

In this article, I hope I can help you with the decisions you might want to make and to navigate this unusual post lockdown housing market. Let me start with some stats to show you what is happening at the moment in Tunbridge Wells.

The average time it takes to sell a property locally in this housing market is 47 days.

Interesting when compared with nearby Southborough at 25 days, Tonbridge at 49 days, Wadhurst at 23 days and Crowborough at 21 days.

Look back five years, it took 103 days on average to sell a Tunbridge Wells home – the local property market is now certainly ‘cooking on gas’!

The property market has certainly solidified a little over the last few weeks. The Stamp Duty holiday rush has seen its run and the pent-up post-Brexit and more importantly post-lockdown demand has receded and although I am still observing competing offers on most properties I look at, I certainly get a feeling of a small shift in the balance-of-power between the seller and buyer.

Many people have put their house hunting on hold as they go on their first holiday since 2019, be that glamping in Cornwall or having days out on a ‘staycation’. That means between now and mid-September, depending on what type of property you are looking for, many buyers could well discover that there are fewer competitors for their next home than there might be.

Also, July and August are notoriously barren months for estate agents putting new properties up for sale. Yet since the typical ‘seasonal property market’ is so out of kilter as a result of the pandemic, many agents are taking on a decent number of very good properties now, which is not something that characteristically would have happened in the summer months.

The important thing is not to wait for the property to hit the portals (i.e. Rightmove etc). Yet research shows, nearly 5 out of 6 people who bought their home were not on the agents mailing list before they viewed the home they eventually bought. That’s OK in a normal property market as you can wait until it hits Rightmove or Zoopla, yet these are unprecedented times and if you are not on an agent’s mailing list - you will miss out on properties.

If you don’t put yourself on the agent’s mailing lists, you could end up losing out on the property of your dreams.

So, the question is should you put your home on the market first or wait for the right property to come along?

Roll the clock back a few years and it was standard practice for people to wait for their dream home to come onto the market, then put theirs on and hope that it would sell in time. This housing market is different and only those who are in a position to proceed (cash buyers or those sold subject to contract) will be considered as serious buyers.

Yet, nobody wants to be homeless if they do sell.

Estate agents are returning back to their old skills from the 1980s and 1990s by chain building. By starting at the bottom of the chain of the smaller house and building up a chain, waiting for everybody to find their next homes, nobody need be made homeless.

This is not an issue because most house sales are taking on average between 20 and 25 weeks and as long as everybody communicates with each other and everyone knows where they are, then normally things go through, albeit slower. Can you believe it – estate agents really are earning their money with this!

So what Tunbridge Wells homes are selling the fastest?

Tunbridge Wells Terraced and Town Houses are selling in 27 days

Tunbridge Wells Semi-Detached Houses are selling in 32 days

Tunbridge Wells Detached Houses are selling in 27 days

Tunbridge Wells Apartments are selling in 62 days

Tunbridge Wells landlords, maybe there are some bargains to be had with some apartments with that length of time on the market? Again, do your homework or even consider picking up the phone to me for a chat.

So, there you have it. The lessons I hope you have now learnt from this are to put yourself on agent’s mailing lists, talk to agents about your requirements so you get a heads up first when a property is coming onto the market (don’t just do everything over a computer screen) and once you have found a property be a little bit more patient with how long it takes to build a chain and then get the property through to an exchange and completion so you get the keys to your forever home.

Whether you are a Tunbridge Wells homeowner, Tunbridge Wells landlord or first-time buyer and would like some advice and opinion on your circumstances in the current property market, please don’t hesitate to either pick up the phone or drop me a message.

To everyone else, what are your thoughts on the Tunbridge Wells property market?




Sunday, 22 August 2021

Royal Tunbridge Wells’ Love (and Hate) Affair with the Semi-Detached House

 


The Semi-Detached House – the icon of middle-class aspiration, the pinnacle of liberalism yet at the same time compromised individuality, the ‘semi’ as it is colloquially termed is, for many Tunbridge Wells homeowners, the highpoint of modern domestic bliss.


Britain’s gift to architecture is the humble ‘Semi-Detached House’. This type of property has been exported around the world with - the ‘Doppel Haus’ in Germany, the ‘Duplex’ in the USA, Canada and Australia.  


For those young, hip and trendy people living in your converted warehouses with strobe lighting and exposed brickwork, you might be surprised to learn that the semi is the dream home of an immense number of Tunbridge Wells people. In fact, it is the most common dwelling type in the British Isles, with 8,060,657 semi-detached homes occupied by Brits alone (representing 31.68% of all occupied property) compared to 23.81% detached, 25.49% terraced and 19.02% flats. 


In Tunbridge Wells alone, there are 6,509 semi-detached houses meaning …


29.2% of properties in Tunbridge Wells are semi-detached.



So, when did the semi-detached house first come into play? Many people think the semi-detached boom started with mass swathes of the suburban mock Tudor bay fronted semis being built between the first and second world wars. The fact is that it was actually rich landowners in the post Great Plague (1665+) years wished to house their farm labourers as inexpensively as possible, yet making their grand estates look as imposing as possible. 


And that’s the point of a semi-detached house. Only half the property is yours, yet you ‘feel’ like you own it all.


The next phase of the semi-detached story, and a phase that really pushed home the point, was many of the late Georgian houses built around the Kensington Gardens area in West London. Many upper-middle class Georgians were wanting something more than the classic Georgian terraced house yet couldn’t afford a large detached home. Therefore, architects took the humble semi-detached house to the next stage of its evolution by masquerading the building itself as one home by slipping its two front doors down opposite sides of the building, making it look like one home from the front, to complete the impression of total ownership.


By Victorian times, semi-detached houses fell out fashion as the railways were building many of them for their railway workers and they became associated with the lower working classes but speculative builders continued building semi-detached homes for the new lower middle class, that is the reason why ultimately the country is full of semi-detached homes today.


The semi-detached house was saved from the annals of history by the Bedford Park development in Ealing (London). Referred to as the world's first ‘garden suburb’ and started in the 1870’s, the architect of Bedford Park used influences of the ‘Aesthetic Movement’, the precursor to the ‘Arts and Craft Movement’ to make the buildings look more pleasing on the eye. The architect also took reference from the style of properties from British history such as Queen Ann to be seen in such features as a sweep of steps leading to a carved stone door, rows of painted sash windows in boxes set flush with the brickwork and bright coloured brickwork with limestone stone quoins emphasising the building’s corner.


As the car enabled people to commute to work from further away, people wanted to get out of the big cities, thus giving rise to the interwar semi, with its mock Tudor fronted, rosemary tiled roof, oak beamed, herringbone brickwork and the leaded and stained glass windowpanes that we all recognise. It was Bedford Park that gave the green light for architects up and down the country to use old styles of building design to make their semi-detached houses look the part.


And now, in more modern times, the semi-detached house has gone from strength to strength.


5,419 of Tunbridge Wells semi-detached houses have changed hands since 1995, many upwards of 5 times (and a handful even more).


The semi continues to appeal, both to big national builders and smaller Tunbridge Wells developers, and most importantly to home buyers. The advantage of semi-detached houses over town houses/terraced houses or apartments is they afford access to their (typically bigger) gardens without having to pass through the house, and they have natural sunlight on three sides of the property, are easily extendable and quite often have a driveway. 


And that’s at the heart of what a semi-detached house is all about, the schism or divide of the semi reveals the tension at the heart of owning your home, which on one side of the coin is a commodity/way to make money and on the other side, a vision to have your own castle, a piece of ground to call your own. It articulates both the craving for personal freedom and the inevitability of socio-economic life. What do I mean by that?


We may dream of owning a castle in many acres, with a drawbridge and moat, yet real life means we can only afford half a building plot sliced out by a volume national builder next to the A26.


I just love a semi-detached house! Style and substance combined.


What are your thoughts? Share your stories and opinions on the humble semi-detached house.