13.94 Babies Born for Each New Home Built in the Royal Tunbridge Wells areA

As more babies are being born to Royal Tunbridge Wells mothers, I believe this increase will continue to add pressure to the over stretched Royal Tunbridge Wells property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 13.94 babies were born for every new home that was built in the Tunbridge Wells council area in 2016.  I believe this has and will continue to exacerbate the Royal Tunbridge Wells housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Royal Tunbridge Wells rents and Royal Tunbridge Wells property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Tunbridge Wells council area had an average of 61.2 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region it’s also 61.7 births per 1,000 women aged 15 to 44.

The number of births from Royal Tunbridge Wells women between the ages of 20 to 29 are much higher than the national average, but those between 35 and 44 were significantly lower.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Royal Tunbridge Wells area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing ... a huge increase in the need for housing in Royal Tunbridge Wells.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Royal Tunbridge Wells people.

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) ... demand for property is simply outstripping supply.

The simple fact is more Royal Tunbridge Wells properties need to be built … be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of the Cotswolds, but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Royal Tunbridge Wells, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

For more thoughts on the Royal Tunbridge Wells Property market – visit the Royal Tunbridge Wells Property Blog

Royal Tunbridge Wells Flats Out Perform Property Market Average by 36%

According to the Land Registry's latest House Price Index for Royal Tunbridge Wells and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.

Values of apartments in Royal Tunbridge Wells have increased by 5.25% over the past year, which is proportionally 36% more than the Royal Tunbridge Wells average rise of 3.86%. The last time flats/apartments in Royal Tunbridge Wells out performed all the other types of property, by such a gulf, was back in the summer of 2003. For comparison, the other property types performed as follows ..

• ·      Detached homes rose by 2.85%
• ·      Semi-detached homes rose by 3.38%
• ·      Terraced/Town-Houses rose by 3.68%

This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Royal Tunbridge Wells property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Royal Tunbridge Wells on a number of occasions in my Royal Tunbridge Wells Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers.

The average property value in Royal Tunbridge Wells

now stands at £485,300.

When split down into property types ..

• ·      Royal Tunbridge Wells Apartments at £281,200
• ·      Royal Tunbridge Wells Detached at £845,500
• ·      Royal Tunbridge Wells Semi-Detached at £446,400
• ·      Royal Tunbridge Wells Terraced/Town-House at £369,900

So why have Royal Tunbridge Wells apartments performed so well, and is it just a Royal Tunbridge Wells thing? When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.

So, should Royal Tunbridge Wells apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Royal Tunbridge Wells house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.

Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.

So, what next for the Royal Tunbridge Wells Property market? I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.

I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all. HMS Royal Tunbridge Wells Property Market…. “Nice and steady as she goes”, says the Captain

Royal Tunbridge Wells rents rise by 22.6% since 2005

The Royal Tunbridge Wells Property Market is a very interesting animal and has been particularly fascinating over the last 12 years when we consider what has happened to Royal Tunbridge Wells rents and house prices.

There’s currently much talk of what will happen to the rental property market following Brexit. To judge that, I believe we must look what happened in the 2008/9 credit crunch (and what has happened since) to judge rationale and methodically, the possible ramifications for long-term investors in the Royal Tunbridge Wells property market. You see, an important, yet overlooked measure is the performance of rental income vs house prices (i.e. the resultant yields over time). In Royal Tunbridge Wells (as for the rest of Great Britain), notwithstanding a slight drop in 2008 and 2009, property rentals have been gradually increasing.

The income from rentals has been progressively increasing over the last 12 years. Today, they are 22.6% higher than they were at the beginning of 2005. In fact, over the last five years, the average growth has been 2.4% per annum. From a landlord’s point of view, increase in average rental income is not to be sneered at. However, the observant readers will be noting that we are ignoring an important factor – our friend inflation.

Turn the clock back to 2005, and we have a property being rented for say £900 a month and that is still being rented at £900 a month today, in Spring of 2017. While the landlord is not getting any less income, this £900 is no longer worth as much. Let me explain, in 2005, £900 may have bought a two-week 4* holiday in Italy. Yet, holidays have increased in line with inflation (which has been 38.5% since 2005), so our holiday would cost today £1,246 (£900 + 38.5% inflation = £1,246). Therefore, the landlord could no longer afford the same holiday, even though having the same amount in pound notes from their rental property.

This means when we compare rents in Royal Tunbridge Wells to inflation since 2005, Royal Tunbridge Wells landlords are worse off today, when they receive their monthly rental income, than they were in 2005 by 15.9% in real terms (rents increased by 22.6% since 2005, less the 38.5% inflation since 2005 – net affect 15.9% drop) 

However, rental income is not the only way to generate money from property as property values can increase. Although in the short term, cash flows are diminishing, many Royal Tunbridge Wells landlords may be content to accept that for a colossal increase in capital value.

Property values in Royal Tunbridge Wells have risen by 59.06% since 2005

This equates to a reasonably salubrious 4.92% per annum increase over the last 12 years. Even more interesting that this includes the 2008/9 property crash, this will make those Royal Tunbridge Wells landlords and investors feel a little better about the information regarding rents after inflation.

Moving forward, the prospects of making easy money on buy to let in Royal Tunbridge Wells have diminished, when compared to 2005. Last decade, making money from buy to let was as easy as falling off a log – but not anymore.

It would be true to say, my rental income verses property prices study does lead to noteworthy thoughts. I am often asked to look at my landlord’s rental portfolios, to ascertain the spread of their investment across their multiple properties. It’s all about judging whether what you have will meet your needs of the investment in the future. It’s the balance of capital growth and yield whilst diversifying this risk.

If you are investing in the Royal Tunbridge Wells property market, do your homework and do it well. While some yields may look attractive, there are properties in many areas that do not have the solid rudiments in place to sustain them. If you are looking for capital growth, you might be surprised where the hidden gems really are. Take advice, even ask your agent for a portfolio analysis like I offer my landlords. The clear majority of agents in Royal Tunbridge Wells will be able to give a detailed analysis of past and anticipated investment opportunity (especially the awful effect of inflation) on your portfolio. However, if they can’t help – well, you know where I am, the kettle is on!

For more thoughts on the Royal Tunbridge Wells Property market – visit the Royal Tunbridge Wells Property Blog

Should the 6,779 home owning OAP’s of Royal Tunbridge Wells be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Royal Tunbridge Wells’ society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Royal Tunbridge Wells home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Royal Tunbridge Wells’ homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it)

Looking at the statistics for Royal Tunbridge Wells, of the 6,779 Homeowners who are 65 years and older, whilst 4,351 of them described themselves in good or very good health, a sizeable 1,922 home owning OAPs described themselves as in fair health and 506 in bad or very bad health.

7.46% of Royal Tunbridge Wells home owning OAP’s are in poor health

But if you look at the figures for the whole of Tunbridge Wells Borough Council, there are only 398 specialist retirement homes that one could buy (if they were in fact for sale) and 823 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Royal Tunbridge Wells downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Royal Tunbridge Wells population and specialist retirement properties for the ones who aren’t in such good health ... we need to build more appropriate houses in Royal Tunbridge Wells.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

...and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Royal Tunbridge Wells is ... more houses and apartments need to be built in the Royal Tunbridge Wells area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Royal Tunbridge Wells property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!