Wednesday, 31 May 2017

Hard Brexit could cause 1,400 properties to be dumped onto the Royal Tunbridge Wells Property market

So all cards up in the air! A general election will be on the books, but one thing is for sure ... whoever gets the job to deal with Brexit has a hard job on their hands (I'm just glad its not me!) As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Royal Tunbridge Wells (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.

Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Royal Tunbridge Wells ... but nothing could be further from the truth.

Of the 112,622 people who are resident in the Tunbridge Wells Borough Council area, 101,667 were born in the UK, 2,552 were born in EU countries from West Europe and 1,601 were born in EU countries from the former Soviet States in East Europe (the rest coming from other countries around the world).

The rights of these EU citizens living in the Royal Tunbridge Wells area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Royal Tunbridge Wells will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.

So, what would a hard Brexit do to the Royal Tunbridge Wells property market?

Well a hard Brexit could mean the nuclear option when it came to the Royal Tunbridge Wells housing market. It could mean that every EU citizen would have to leave the UK.

In the Tunbridge Wells area, 1,698 of the 2,552 Western European EU citizens own their own home and (so they would all need to be sold) and 1,138 of the 1,601 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.

Hard Brexit and mass EU Migration would mean c. 1,400 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Royal Tunbridge Wells property values and rents, causing negative equity for thousands of Royal Tunbridge Wells homeowners and many buy-to-let landlords would be out of pocket.

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Royal Tunbridge Wells (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Royal Tunbridge Wells (and the surrounding area) to get work and provide for their families. Many Royal Tunbridge Wells people have invested their life savings into buying a buy to let property.

Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK ... politics aside - a hard Brexit is in no one’s interests.

Friday, 26 May 2017

What will the General Election do to 15,422 Royal Tunbridge Wells Homeowners?

In Royal Tunbridge Wells, of the 24,962 households, 7,289 homes are owned without a mortgage and 8,133 homes are owned by a mortgage. Many homeowners have made contact me with asking what the General Election will do the Royal Tunbridge Wells property market?  The best way to tell the future is to look at the past.

I have looked over the last five general elections and analysed in detail what happened to the property market on the lead up to and after each general election. Some very interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that weren’t certain were the last two (2010 with the collation and 2015 with unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005 when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 ... in terms of the number of houses sold and the prices achieved.

Look at the first graph below comparing the number of properties sold and the dates of the general elections

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season - i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections but this time compared that to what happened to property values (pink line).

It is quite clear none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself also means that any property buyer’s indecisiveness and indecision before the election will have less of an impact on the market.

So finally, what does this mean for the landlords of the 5,353 private rented properties in Royal Tunbridge Wells? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Royal Tunbridge Wells will be more subdued in the coming few years for reasons other than the general election. The growth of rents has taken a slight hit in the last few months as there has been a slight over supply of rental property in Royal Tunbridge Wells, making it imperative that Royal Tunbridge Wells landlords are realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy ... the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet. If you want to read more about the Royal Tunbridge Wells property market – then why not visit the Royal Tunbridge Wells Property Market Blog for more information?

Royal Tunbridge Wells Rents To Rise Quicker Than Royal Tunbridge Wells Property Prices In Next 5 Years

The next five years will see an interesting change in the Royal Tunbridge Wells property market. My recent research has concluded that the rent private tenants pay in Royal Tunbridge Wells will rise faster than Royal Tunbridge Wells property prices over the next five years, creating further issues to Royal Tunbridge Wells’ growing multitude of renters. In fact, my examination of statistics forecasts that ..

By 2022, Royal Tunbridge Wells rents will increase by 23%, whereas Royal Tunbridge Wells property values will only grow by 18%.

Let me explain why I have come to those conclusions:

Over the last five years, property values in Royal Tunbridge Wells have risen by 38.9%, whilst rents have only risen by 18.6%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Royal Tunbridge Wells tenants will have fewer properties to choose from, which will push rents higher. In fact, talking to fellow property professionals in Royal Tunbridge Wells, there appears to be privation and shortage of new rental properties coming on to the Royal Tunbridge Wells lettings market.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tory’s have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector. They can’t expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. They didn’t invest in buy to let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords … if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most the Council houses were sold off in the 1980’s!).

With the challenges ahead, with the ‘B’ word (that’s budget if you wondered!), house price inflation will be tempered over the coming five years in Royal Tunbridge Wells. As I have discussed in previous articles, the number of properties on the market in Royal Tunbridge Wells remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why I believe property values in Royal Tunbridge Wells will only be 18% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Royal Tunbridge Wells people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Royal Tunbridge Wells rental property currently standing at £1,391 per month …

Over the next five years, I predict the average rent
in Royal Tunbridge Wells will rise to £1,711 per month

These are interesting times. There is still money to be made in buy to let in Royal Tunbridge Wells – Royal Tunbridge Wells landlords will just need to be smarter and more savvy with their investments. If you are looking for such advice and opinion to help you meet those investment goals, one place you can find more information is the Royal Tunbridge Wells Property Blog 

Saturday, 20 May 2017

473 Properties For Sale in Royal Tunbridge Wells ... is this a good time to sell?

2017 has started with some positive interest in the Royal Tunbridge Wells property market.  Taking a snap shot of the Royal Tunbridge Wells property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Type of Royal Tunbridge Wells Property
Number of Properties on the Market 12 months ago
Number of Properties on the Market now
% change




So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 473 properties for sale today compared with 427 a year ago, a rise of 11%.

Next, Royal Tunbridge Wells asking prices, compared
to the same as a year ago, are 5% lower.

With that in mind, I wanted to look at what property was actually selling for in Royal Tunbridge Wells. Taking my information from the Land Registry, the last available six months property transactions for TN4 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

£830,818 (11)
£953,672 (12)
£804,150 (10)
£826,500 (8)
£765,750 (8)
£762,400 (5)
£349,783 (27)
£488,027 (26)
£441,636 (22)
£424,997 (15)
£378,000 (10)
£345,529 (17)
£314,643 (14)
£345,613 (15)
£338,145 (20)
£320,785 (10)
£305,400 (5)
£332,430 (15)
£230,515 (13)
£275,849 (15)
£246,593 (21)
£259,900 (15)
£263,450 (11)
£260,382 (11)
£399,766 (65)
£491,980 (68)
£406,833 (73)
£418,610 (48)
£421,498 (34)
£365,346 (48)

So what does all this mean for the property owning folk of Royal Tunbridge Wells?

Well, with more property on the market than a year ago and asking prices 5% lower, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Royal Tunbridge Wells property ladder, have much more price information about the Royal Tunbridge Wells property market at their fingertips than ever before.

Those Royal Tunbridge Wells people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Royal Tunbridge Wells estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Royal Tunbridge Wells property-market has an unassailable demand for property – there is one saying that always rings true - as long as the property is being marketed at the right price it will sell.

If you want to know if your Royal Tunbridge Wells property is being marketed at the right price, send me a web link and I will give you my honest opinion.