Monday, 29 August 2016

81.6% of Royal Tunbridge Wells Properties have 3 or more bedrooms – Problem or Opportunity?

The orthodox way of classifying property in the UK is to look at the number of bedrooms rather than its size in square metres (although now we are leaving the EU – I wonder if we can go back to feet and inches?). It seems that homeowners and tenants are happy to pay for more space. It’s quite obvious, the more bedrooms a house or apartment has, the bigger it is likely to be. The reason being not only the actual additional bedroom space, but the properties with more bedrooms tend to have larger / more reception (living) rooms. However, if you think about it, this isn’t so astonishing given that properties with more bedrooms would typically accommodate more people and therefore require larger reception rooms.

In today’s Royal Tunbridge Wells property market, Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords I talk to are always asking me which attributes and features are likely to make their property comparatively more attractive and which ones may detract from the price. Over time, buyers’ and tenants’ wants and needs have changed. In Royal Tunbridge Wells, location is still the No. 1 factor affecting the value of property, and a property in the best neighbourhoods, say Broadwater Down or Langton Green can command a price nearly 50% higher than a similar house in an ‘average’ area. However, after location, the next characteristic that has a significant influence on the desirability, and thus price, of property is the number of bedrooms and the type (i.e. Detached/ Semi/Terraced/Flat).

In previous articles, I have analysed the Royal Tunbridge Wells housing stock into bedrooms and type of property, but never before now have I cross-referenced type against bedrooms. These figures for the Tunbridge Wells Borough Council area make fascinating reading. It shows 81.6% of all properties in the area have 3 or more bedrooms

Terraced (including end-terrace)
1 bedroom
2 bedrooms
3 bedrooms
4 bedrooms
5 or more bedrooms

I was genuinely surprised at the low numbers of one and two bed properties, especially 2 bed semis detached houses, especially as tenants like the smaller one and two bed properties in Royal Tunbridge Wells. You see, it might interest the homeowners and landlords of Royal Tunbridge Wells, that there has been a change in the numbers of properties on the market and the split in bedrooms on the market over the last 12 months

·       12 months ago, 44 one bed properties were for sale in Royal Tunbridge Wells, today 29, a drop of 34%
·       12 months ago, 129 two bed properties were for sale in Royal Tunbridge Wells, today 134, a rise of 4%
·       12 months ago, 112 three bed properties were for sale in Royal Tunbridge Wells, today 135, a rise of 21%
·       12 months ago, 89 four bed properties were for sale in Royal Tunbridge Wells, today 102, a rise of 15%
·       12 months ago, 63 five + bed properties were for sale in Royal Tunbridge Wells, today 76, a rise of 21%

It can quite clearly be seen more Royal Tunbridge Wells properties have become available, which can only be good news for Royal Tunbridge Wells first time buyers and Royal Tunbridge Wells buy to let landlords looking for a bargain (especially post Brexit) as property prices have stopped rising at the silly rates they were 12/18 months ago. 

For several years Royal Tunbridge Wells buy-to-let investors have been the only buyers at the lower end (starter homes) of the market, as they have been enticed by high tenant demand and attractive returns. Some Royal Tunbridge Wells landlords believe their window of opportunity has started to close with the new tax regime for landlords, whilst it already appears to be opening wider for first-time buyers. This is great news for first time buyers ... but one final note for Royal Tunbridge Wells landlords ... all is not lost ... you can still pick up bargains, you just need to be a lot more savvy and do your homework ... one source of such information with articles like this is the Royal Tunbridge Wells property market Blog

Thursday, 25 August 2016

“Should I make an Offer?”

As a buyer you are in a powerful position, both in terms of the effect your buying decision will have on your own life, and on that of the person from whom you buy.
If buying a property were some form of commodity like petrol or milk, then you would simply buy the cheapest stock available. However, buying a home is much less mercenary, and emotions run high.
Over the years, homebuyers have become used to the idea of making a “starting offer” below the asking price, but it might be worth considering a few aspects of the implications of making a low offer.
Firstly, what does a low offer say about you to the vendor? That you don’t have the money and that any subsequent increase might stretch you beyond your ability to complete the purchase? Does it suggest you don’t really like their home, risking offence? A low offer can often start off the relationship with the vendor on the wrong foot.
And what if your low offer is accepted? Will the vendors experience regret and continue to market the property hoping to find a higher price with someone else? The chances of such a buyer being found are high as people usually want a property that someone else wants. We receive more interest about properties which are “under offer” than we do about those for sale!
Ultimately it’s about commitment. An offer at, close to, a realistic asking price tells the vendor you are committed to the property. In return the vendor is likely to demonstrate a level of commitment to you that will result in a successful purchase

Monday, 22 August 2016

29% Of Royal Tunbridge Wells Homes Are One Person Households

I was having an interesting chat with a Royal Tunbridge Wells buy to let landlord the other day when the subject of size of households came up in conversation.  For those of you who read my Brexit article published on the morning after the referendum, one of the reasons on why I thought the Royal Tunbridge Wells property market would, in the medium to long term, be OK, was the fact that the size of households in the 21st Century was getting smaller – which would create demand for Royal Tunbridge Wells Property and therefore keep property prices from dropping.

Looking at the stats going back to the early 1960’s, when the average number of people in a home was exactly 3, it has steadily over the years dropped by a fifth to today’s figure of 2.4 people per household. Doesn’t sound a lot, but if the population remained at the same level for the next 50 years and the we had the same 20% drop in household size, the UK would need to build an additional 5.28 million properties ( or 105,769 per year) .. When you consider the Country is only building 139,800 properties a year ... it doesn’t leave much for people living longer and immigration. Looking closer to home...

In the Tunbridge Wells Borough Council area, the average
number of occupants per household is 2.4 people

When we look at the current picture nationally and split it down into tenure types (i.e. owned, council houses and private renting, a fascinating picture appears.

The vast majority of homeowners who don’t have a mortgage are occupied by one or two people (81% in fact), although this can be explained as residents being older, with some members of the family having moved out, or a pensioner living alone.  People living on their own are more likely to live in a Council house (43%) and the largest households (those with 4 or more people living in them are homeowners with a mortgage – but again, that can be explained as homeowners with families tend to need a mortgage to buy. What surprised me was the even spread of private rented households and how that sector of population are so evenly spread across the occupant range – in fact that sector is the closest to the national average, even though they only represent a sixth of the population.

When we look at the Tunbridge Wells Borough Council figures for all tenures (Owned, Council and Private Rented) a slightly different picture appears...

1 person households in Royal Tunbridge Wells
2 person households in Royal Tunbridge Wells
3 person households In Royal Tunbridge Wells
4 person households in Royal Tunbridge Wells
5+ person households in Royal Tunbridge Wells

But it gets even more interesting when we focus on just private rental properties in Royal Tunbridge Wells, as it is the rental market in Royal Tunbridge Wells that really fascinates me. When I analysed those Tunbridge Wells Borough Council private rental household composition figures, a slightly different picture appears. Of the 7,412 Private rental properties in the Tunbridge Wells Borough Council area,

·       36.2% of Private Rental Properties are 1 person Households
·       35.0% of Private Rental Properties are 2 person Households
·       14.4% of Private Rental Properties are 3 person Households
·       8.5% of Private Rental Properties are 4 person Households
·       5.6% of Private Rental Properties are 5+ person Households

As you can see, Royal Tunbridge Wells is not too dissimilar from the national picture but there is story to tell. If you are considering future buy to let purchases in the coming 12 to 18 months, I would seriously consider looking at 2  bed apartments/houses. Even with the numbers stated, there are simply not enough 2 bed apartments/houses to meet the demand. They have to be in the right part of Royal Tunbridge Wells and priced realistically, but they will always let and when you need to sell, irrespective of market conditions at the time, will always be the target of buyers