Tuesday, 27 January 2015

Royal Tunbridge Wells’s property market has outperformed Chislehurst’s by over 49%

Within Kent we have many towns and areas that make up our fine County, from the up market posh areas of the Sevenoaks, Chislehurst and Cranbrook all the way to the working class non nonsense areas of Chatham, Ramsgate and Sheerness.  In fact I have a few landlords from Chislehurst, one in particular who has a decent portfolio of buy to let property in Chislehurst, Royal Tunbridge Wells and other parts of West Kent. 

Chislehurst is an affluent town on the outskirts of Kent and is popular because of its’ local private schools, great choice of properties and fast links to London but with all the flexibility of living in the countryside.  Chislehurst offers a comprehensive of upmarket shopping facilities and  all of these factors make the average value of a property in Chislehurst around £650,600.

Our town of Royal Tunbridge Wells has an excellent choice of shops, banks and restaurants, but not in the same league as Chislehurst’s. Our town offers excellent rail and road links and there is a good choice of schooling within the area, including the excellent Claremont, St James & St Peter’s and St John’s Schools.  All these factors make the average value of a property in Royal Tunbridge Wells around £413,200.

In the last 12 months, the average value of a property in Chislehurst and Royal Tunbridge Wells has risen in both places by roughly the same amount (Chislehurst £42,200 and Royal Tunbridge Wells £38,800). However, that doesn’t tell the whole story, because average property values are much lower in Royal Tunbridge Wells. As a percentage, values in Chislehurst have increased by a modest 6.9%, but in Royal Tunbridge Wells they have increased by nearly half as much again, (in fact 49% proportionally more) at 10.3%. It shows that Royal Tunbridge Wells is a town that people want to invest in.

By keeping an eye on the local market, I am able to judge if a property is good value to buy for a landlord. I give this advice and opinion at no charge to anyone who asks, be they an existing landlord of ours or indeed another agent. I will also give it to anyone considering becoming a buy to let landlord for the first time. I do not charge for this service, because if I offer you an honest and straight forward opinion, you may consider using me to manage your property. However, I must stress there is no obligation to do so. Feel free to pop your head through our door on Vale Road in Royal Tunbridge Wells to chat about the ups and downs of the property market in Royal Tunbridge Wells.

Friday, 16 January 2015

What has the Help to Buy scheme done to the Royal Tunbridge Wells property market?

The Conservative’s and Liberal Democrats launched Help to Buy eighteen months ago to give a boost to the housing market. The Help to Buy scheme involves the Government guaranteeing up to 15 per cent of a mortgage, acting as an indemnity for the banks and building societies who sign up (so far only three banks have done so). This means lenders can provide mortgages more confidently to borrowers with a 5 per cent deposit. It will apply to all types of properties, first-time buyers, home movers and re-mortgagers.

Quite interestingly, first timer buyers have had access to 95% mortgages since 2010 so I am not sure what it will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Royal Tunbridge Wells continues to have a buoyant property market. Prices are rising, but not at the double digit level that was experienced in the early to mid 2000’s. If the scheme enables those who want to buy, to buy, then that can only be good for everyone in the town.

Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Royal Tunbridge Wells to let out. Carrying out a quick search on one of the price comparison websites, I was able to find in seconds that landlords can get fixed rate buy to let mortgages from as low as 3.65% until the end of 2011. With rental yields in Royal Tunbridge Wells of around 4% to 6% per year and the values increasing by 10.3% in Royal Tunbridge Wells, the overall average yearly return is the region of 14.3% to 16.3% per year.  

However, buying a buy to let property is full of pitfalls. If you have a good tenant, in a good property and a good relationship between tenant and agent, then not much can go wrong, as long as the relationship between the landlord and agent is exceptional. I pride myself on exceptional relationships with my landlords and their continued business speaks for itself.

If you are considering becoming a new buy to let landlord, feel free to pop your head through the door of our agency on the Vale Road in Royal Tunbridge Wells for some advice and opinion on what (or not) to buy. It is true the property market is showing signs of good improvement, but, if you know where to look, and more importantly, what to look for, there are still bargains in Royal Tunbridge Wells to be had.

Saturday, 10 January 2015

Royal Tunbridge Wells Property Market – should you be buying?

A number of people have approached me recently, asking about the Royal Tunbridge Wells property market. Earlier in 2014 we had headlines of massive increases in property values in the UK, and then more recently, we have had reports of potential massive crashes. So, should we be worried?

Property values in Royal Tunbridge Wells have risen, on average by 9.7 % in the last 12 months, which sounds impressive, but when I looked at the South East as a whole, prices have risen by 13.2% (although nationally they are only 8.7% higher). However, when you take the perspective of comparing 2014 to the boom years of 1999 to 2003, when property values in Royal Tunbridge Wells increased in 1999 by 11%,  2000 by 17.4% and 11.4% in 2001, 16.6% in 2002 and 17% in 2003, I cannot see why some are concerned about an unsustainable price boom.

Looking at my own findings and speaking to other property professionals in Royal Tunbridge Wells, the issue isn’t house price inflation, but a lack realistically priced properties coming onto the market for sale, a lack of supply. In the whole of May 2014, an impressive 135 properties came on to the market for sale in Royal Tunbridge Wells. In November, only 71 properties came on to the market.

So should you be buying a property in Royal Tunbridge Wells?  Now is a good time to buy, provided you accept prices may fall again in a few years. It depends on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it. Royal Tunbridge Wells first time buyers preparing to take the plunge should bear these factors in mind. The biggest issue must be that buyers ensure they can take the hit of future interest rate rises and therefore, I ask the first time buyers of Royal Tunbridge Wells to make sure you'd be happy in your new home, because you could be stuck there in five years' time.

Landlords tend to buy for the long term, so these short term movements don’t tend to affect them as much. The lack of supply in Royal Tunbridge Wells of new properties coming onto the market indicates people wanting to buy have to move quickly, and don’t have the luxury of a few weeks to decide to view the property. However, my findings show that first time buyers and landlords in Royal Tunbridge Wells aren’t prepared to pay over the odds for a property to secure it. Maybe, just maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Royal Tunbridge Wells property market?

Thursday, 1 January 2015

Why don’t people buy instead of renting in Royal Tunbridge Wells?

Quite often, when talking about the rental market, we talk about the property and the landlords and seem to forget the other party in the equation, the tenant. Without tenants, there is no demand for the rental property. The profile of the Royal Tunbridge Wells tenant has changed and continues to change. Although this is in part due to the credit crunch, job mobility and the raising of deposits, an increased number of people in their twenties are choosing to rent rather than buy and have done so, even when they were in a position when they could have bought a property.

Since the credit crunch, rents have been good value for money for most tenants outside London. Few rents (outside London) have kept pace with inflation as they tend to track wage inflation. In 2008, the average median gross wage according to Office of National Statistics in Royal Tunbridge Wells was £30,817. Latest figures for Royal Tunbridge Wells in 2014 show average salaries in the town had risen to £34,855, an increase of 13.1%. I was reading some research from the Bank of England which suggests with regards to inflation, goods and services that cost £100 in 2008 would cost £119 in 2014, making inflation 19% over those seven years.

Royal Tunbridge Wells tenants are paying less than both wage and goods inflation. Royal Tunbridge Wells rents are in fact still only around 5.4% above the level being achieved in 2008 but the tenants are being paid 13.1% more. That is why we have seen a greater demand for Royal Tunbridge Wells rental properties with more and more people becoming tenants. So renting has since the credit crunch, on average, delivered good value for money for tenants and hence the healthy demand and lack of void periods for most property.

Overall, considering the recent rises in property prices over the last 12 months, we are just 0.3% above the 2007 boom prices in Royal Tunbridge Wells. With reasonable rents, many would-be first time buyers in Royal Tunbridge Wells have been wise to remain in the private rental sector. Rents tend to move in line with wages as opposed to inflation and if something goes wrong with the property, inevitably landlords pick up the bill, so tenants aren’t hit with awful expenditure surprises as a normal homeowner would be. In addition, renting offers better mobility both from a location perspective, but also from a trading up or down perspective in terms of rent commitment which, in this tough job market, could be considered a wise move.

From the landlords point of view, the consequence of this steady / solid market throughout the Royal Tunbridge Wells area, with good tenant demand, decent long term capital growth (as mentioned in last week's article) and average yields between 4 and 7%, with home owners it used to be buy, sell, buy, sell as one rose up the property ladder.. Now it’s buy, hold, buy, hold.

If you would like to discuss my thoughts on the rental markets in Royal Tunbridge Wells, feel free to pop into our offices on Vale Road, or email me on david.rogers@martinco.com

Happy New Year everyone!