Friday, 17 April 2015

Royal Tunbridge Wells Landlords invest £1.38bn in the Royal Tunbridge Wells Property market

South East property asking prices jumped by more than £6,400 to £363,900 in February according to Rightmove, an increase of 1.8% from January and 8.1% higher than a year ago. After the traditionally quiet months of January and February, the property market has started to warm up, but talking to some Royal Tunbridge Wells Estate Agents, they are reporting their lowest ever stocks of quality property for sale. However, asking prices have no relation to what property sells for (ie their REAL value), is the issue a lack of supply?

Putting aside Royal Tunbridge Wells’s continual housing supply shortage, (we only built 4,479 properties in the last decade but the population of Royal Tunbridge Wells grew by 11,019), this is now, according to some people, being exaggerated by an increase in homes being owned by buy to let investors, who tend to be buying a property as part of a long term pension plan and are more likely to keep it for longer than an owner occupier would. I have also seen unwillingness among homeowners looking to move, to put their own property on the market as they can find few suitable properties to make it worth their while going through the whole moving process.

Talking to some Royal Tunbridge Wells landlords only last week, I said that I believe this is the new norm in the Royal Tunbridge Wells property market, and is the consequence of over 35 years of not enough homes being built to meet the escalating growth in household numbers, resulting in a lack of quality homes for sale in many popular areas of Royal Tunbridge Wells.

When one looks at the historic data, in October 2008, there were 1,246 properties on the market in Royal Tunbridge Wells compared to today’s 405. Should we be worried?  Well in March 2010, there were only 465 properties for sale in Royal Tunbridge Wells but five months later in August 2010 this had jumped to 763 properties, for it to drop to 309 properties in March 2014. The number of properties on the market is a cyclical thing in Royal Tunbridge Wells, it always has been and always will be. As we go into the Spring of 2015, the number of new properties coming onto the market will increase ... just as the daffodils will flower.

So are landlords to blame? Well, on one side of the coin, yes they are. If they buy a property to rent out, that means someone can’t buy it to live in. However, it doesn’t matter if someone wants to live in a property if they can’t afford the deposit and upkeep .. and the youngsters of Royal Tunbridge Wells still need a roof over their head. So on the other side of the coin, if the Council aren’t building any properties and people can’t afford the large deposit for the mortgage, then Royal Tunbridge Wells landlords have stepped in and bought property to rent out to them. Royal Tunbridge Wells landlords have bought 3,320 properties over the last decade (investing approximately £1.38bn buying those Royal Tunbridge Wells rental properties), meaning there were at the last count, 7,412 Royal Tunbridge Wells properties being privately rented out to tenants. 

Royal Tunbridge Wells tenants are in fact getting a good deal as well, as average rents in Royal Tunbridge Wells are 5.9% above where they were seven years ago. That sounds like a win-win situation for everyone to me. Stop blaming landlords and start building more properties in Royal Tunbridge Wells .. that is the only answer.

In the meantime, the demand from Royal Tunbridge Wells tenants for Royal Tunbridge Wells property is only set to rise over the coming years.

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