I had this really interesting chat with some of my tenants
the other day on renewal of their tenancy agreement. They are a lovely couple
in their early thirties and I know they have decent jobs in Royal Tunbridge
Wells. They have been tenants of ours for quite a while, so I know them quite
well. We got talking and I enquired if
they ever thought of buying a property for themselves, to which they replied
back with the title of this article. It made me think and so I did some more
research into the subject which I want to share with you.
After the end
of the Second World War, just over a quarter of the UK population owned their
own home, the rest rented from private landlords or the local Council. If
someone told you in the 1970’s and 1980’s that they rented, they were
considered a second class citizen. Everyone wanted to own their own home .. it
was the done thing. We think that home ownership will inevitably
happen, but it won't.
It all
changed in the 1970’s, when two things happened. Firstly, the number of people
who owned their own home broke through the 50% barrier in 1971 and by 1981 it
was at 57%. Tied in with that, the average house prices in Royal Tunbridge
Wells were doubling at one point every four years in the 1970’s so property and
profit started to feed off each other.
To put that growth in context, if we were to look at the
last 85 years in Royal Tunbridge Wells, in 1930, the average Royal Tunbridge
Wells property was worth £825. It took 16 years for Royal Tunbridge Wells
property values to double, rising to £2,041 by 1946. Another 15 years and the
average Royal Tunbridge Wells property doubled again to £3,875 in 1961. The
next doubling only took 10 years, as by 1971 the average Royal Tunbridge Wells
property had reached £7,878 in value.
It was (as mentioned above) the 1970’s when things really
took off, as by 1975 (ie only four years) they had doubled to £16,488 and they
doubled again to £33,007 by 1980. It took another eight years for values to
double again, as an average Royal Tunbridge Wells property reached £69,041 in
1988. Twelve years had to pass until the doubled again in 2000 (£142,054) and
just six years to double again by 2006, when they reached £286,504. Where are we today? The average property
value in Royal Tunbridge Wells currently stands at £418,400.
We could blame Maggie Thatcher for making home ownership the
ultimate goal, but what we now need to consider is that the country is turning
on its head and we need to, as a Country, love renting again. Some blame the banks, but
obtaining a 95% mortgage is hard work, but nowhere near impossible. A typical Royal
Tunbridge Wells first time buyer would only need to save £12,500 for a deposit
and fees and they could buy a very decent property. For example, you could buy
a property on the Ramslye Estate in Royal Tunbridge Wells, and it would be cheaper
each month in mortgage payments than renting.
People might say on the surveys they want to buy, when it
comes down to it. If you have been living in a top of the range large property in
Culverden, but the bank will only lend you enough to buy a smaller property on
the Ramslye Estate, what would you do? Don’t get me wrong, the Ramslye Estate
has really pulled its socks up over the last ten years, but it isn’t Culverden,
is it? Again, if you were a twenty something, what would you do? Look again at
the title of the post ... “The way it works is, you have to rent where
you want to live, or buy where you don’t want to live,”
With tenant demand only going in one direction, that is probably
why more and more people are getting into buy to let in Royal Tunbridge Wells.
With the new rules on pensions and the ability to use them to buy residential
rental properties from April onwards, this could be the time for you to buy a
rental property. You must take advice on your pension from a Independent
Financial Advisor (there are plenty in Royal Tunbridge Wells) and you must take
advice from people who know what to buy (and not to buy) in Royal Tunbridge
Wells to ensure you get the best from your investment.
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