Monday, 1 September 2014

Royal Tunbridge Wells property prices .. the long climb back to 2007 prices

After reading my previous articles in the ‘Royal Tunbridge Wells Property Blog’ , some landlords have been speaking to me recently about stories in the press and their concerns about booming house prices and the next housing bubble in Royal Tunbridge Wells. In the past few months, if you were going to be buying in Royal Tunbridge Wells, it was vital to ensure you build in some capital growth by buying cheaply or finding a way to add value.  

Interestingly, property values in Royal Tunbridge Wells have increased by a modest 4.93% in the last 12 months. However, that does not tell the full story as different areas of Royal Tunbridge Wells have  grown at different rates.  Properties in TN1 have risen by 7.5% in the last 12 months.  Values in TN3 have risen by 6.6% whilst values in TN2 have risen by a more modest 4.9%.  Looking at TN4 we find values have only risen by 3.6% in the last year.

So even though different areas of RTW are growing at different rates they are none the less still growing, some may even say some areas of the town are at a runaway level and therefore ask quite rightly whether property values are becoming too expensive or getting out of control ? On the face of it, a 4.9% increase over the last 12 months in Royal Tunbridge Wells property values is impressive could this suggest properties are too expensive in Royal Tunbridge Wells?

Well the answer if both “yes” and “no”.  Yes because the headline price that property sells for in Royal Tunbridge Wells  is only 2.2% below the figures that were being achieved in 2007, yet No, because those headline figures don't take into account inflation. Since 2007, inflation has risen by around 19%. So instead of property values being nearly (2.2% nearly) as expensive as the 2007 boom, they are in fact 21.2% cheaper than the boom  (19% inflation plus 2.2% equates to 21.2%). People think inflation is a bad thing, eating away at the real value of your savings. It can however, be advantageous to property investors

My answer to landlords is get the best advice and opinion you can. Speak to me, speak to others, do your homework and drive a hard bargain when buying, thus ensuring you are in pole position.

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