Saturday, 28 February 2015

What properties are actually selling in Royal Tunbridge Wells?

Prices up, prices down, prices stable .. the newspapers are full of good news, bad news and indifferent news about the Brit’s favourite subject after the weather .. the property market. The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way.  At one end of scale is London, which has seen average prices grow in the last twelve months by a shade under 19% (and again that is an average because some Borough’s  in London have risen by 26%) whilst in the land of Daffodils , by contrast, Wales only saw a 2% increase in property values (although in the Merthyr Valleys they dropped by over 11%).

Well we can’t ignore the rest of the UK, and we can’t forget that the Chancellor’s Stamp Duty reforms have polarised the London property markets above £1,000,000 because at the top end of the market, punitive Stamp Duty charges will dampen demand further. While the Bank of England warned of the growing London property price bubble in the Spring of 2014, even talk of a recovery in some areas was premature. In 2015, irrespective of where you are in the UK, one story will unite the patchwork quilt of markets –  really slow property value growth.

But what about Royal Tunbridge Wells? Well, we haven’t had the December figures from the Land Registry yet but the last few months’ activity and prices achieved would suggest neither house price growth nor drops.  In fact, most sellers are buyers anyway, so if you need to take less for yours, you won’t have to pay as much for the one you want to buy ... and that is good news for everyone as most move up market when they move. This is even better for landlord investors, as they can bag a bargain as well.
The question you should be asking though is not only is what happening to property prices, but which price band exactly is selling? I like to keep an eye on the property market in Royal Tunbridge Wells on a daily basis because it enables me to give the best advice and opinion on what (or not ) to buy in Royal Tunbridge Wells. 

If you look at Royal Tunbridge Wells and split the property market into four equalled sized (into terms of households) price bands. Each price band would have around 25% of the property in Royal Tunbridge Wells, from the lowest in value (the bottom 25% ) all the way through to the highest 25% (in terms of value).  Over the last two months (63 days to be precise),....
  • In the lowest quartile, (those with asking prices under £227k) 96 properties have come onto the market in Royal Tunbridge Wells and 48.9% of them (47 properties have a buyer and sold stc. 
  • The next quartile, between £227k to £300k, of the 101 properties that come on to the market, 35.6% of them (36 properties) have a buyer. 
  • The £300k - £525k price range has seen 119 properties come on to the market, and 26.8% of the properties have a buyer (32 properties). 
  • The most expensive 25%, the £525k plus range, has seen 34 of the 84 properties that came on to the market find buyers (40.4%).   

Fascinating don’t you think?

The next three months’ activity will be crucial in understanding which way the market will go this year and I honestly believe we will not see any house price growth or drops this side of the election. Election or no election, people will always need a roof over their head and that is why the property market has rode the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. ... there is always a silver lining when it comes to the property market! 

Thursday, 12 February 2015

The Sherwood Estate’s property market outperforms Culverden’s by 85%

A couple from the Culverden area came to our offices to discuss potentially investing in property for Buy to Let in Royal Tunbridge Wells. I reminded them that one of the most important considerations you will have to make before investing is considering the balance between annual return/yield and the annual value increase/capital growth of the property that you buy.
One of the most sought after places to live in is Culverden on the North Western side of Royal Tunbridge Wells. There are 4,081 households here and an impressive 1,198 of those households in Culverden are owner occupied (representing 53.8%) and 1,565 of those households (or 38.3%) are privately rented. Culverden has many different types of housing, but the larger executive properties sell for around £850,000 to £860,000 and this type of property rents on average  for £2,050 per calendar month.

The Sherwood Estate on the other hand is a different story altogether yet very similar to Culverden. Of the 3,001 properties in the Sherwood Estate, 1,573 are privately owned which amounts to 52.4% home ownership.  However, there are only 245 privately rented houses (representing 8.2% of households)  because the majority of properties are in the social housing sector where 977 (or 32.6%) of households are rented from the Council.

With this in mind, I carried out some further research and found that the Sherwood Estate’s property market has outperformed the Culverden property market where those detached houses are. This is because a three bedroom mid terraced / semi-detached house on The Sherwood Estate have been selling on average recently for £218,700 and the achievable rents have been £950 per calendar month. The yield which could be achieved from property on The Sherwood Estate is therefore around 5.2% per year. When we compare this to the possible 2.8% per year yield on Culverden, that yield/return is 85% proportionally higher in The Sherwood Estate than Culverden.
We must remember however that yield is not the sole consideration when investing in Buy to Let properties. Areas which offer good yields (ie The Sherwood Estate), normally suffer from poor capital growth (ie the properties in the area with poor yields don’t up in value as quick as the posher areas.) Looking at average property values in Culverden back to 1999, the average property in Culverden has risen by 158% to today. However, average values in The Sherwood Estate have only risen by 121% in the same time frame.  It just goes to show, do you want yield or you want capital growth when in investing in buy to let property?
If you would like more information on investing in Royal Tunbridge Wells’s property market, please call me on  01892 54 38 56 or pop into our offices on Vale Road, Royal Tunbridge Wells.

Tuesday, 3 February 2015

Are there any property bargains in Royal Tunbridge Wells?

Newspapers report property prices in England have soared to a record high – sparking predictions that the country is facing another dangerous property bubble. Values in Kent are still 1.35 per cent higher than their previous peak in the Autumn of 2007. Even with that news, I have been speaking to a couple of landlords over the last few weeks who had concerns in some quarters that the state backed schemes to boost the supply of mortgages such as Funding for Lending and Help to Buy are inflating a new housing bubble. Those landlords are asking if this means the end of property bargains in Royal Tunbridge Wells?

Well, if you do your homework, there are still plenty of good buys in Royal Tunbridge Wells. Don’t expect them to come on the more popular streets in the town. The first rule of buy to let investment is that it is isn’t you that is living in the property, it’s the tenant, and there is always demand for every street in Royal Tunbridge Wells.

Back in late Summer of 2012 a two bedroom top floor apartment located in the purpose built Sand Rock House development with views over Dunorlan Park  came onto the market with an asking price of offers over £250,000.  The property was pleasantly presented inside although a little dated. I kept the photos of the inside and it had a white modern bathroom suite and a kitchen that was not unpleasant.  It sold in the Spring of 2013 for £230,000.  Fifteen months later with what I can see was just some inexpensive new carpets,  some emulsion on the wall  and a bit of modern furniture, it sold again for £375,000 in the Summer of 2014 just gone.  In essence the new owners spent, in my opinion, no more than £5,000-£10,000 but made a profit after costs of £100,000 to £110,000, increasing the value of the flat by 38.8%.  Over the same time frame average property prices in Royal Tunbridge Wells only rose by 16.25%.

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 freely to anyone who asks, be they an existing landlord of ours or of another agents. I will also give it to anyone thinking of becoming a buy to let landlord for the first time.

I do not charge for this service, because if I offer you a honest and straight forward opinion, you could 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.