Friday 22 May 2020

The Lockdown Landlords of Royal Tunbridge Wells


 Despite Government regulations that have been in place since the 26 March 2020, where in-person viewings have been illegal, Royal Tunbridge Wells buy to let landlords have during that time been chomping at the bit to build their property empire by looking at buying additional properties to their buy to let portfolio.

There are plenty of investors who think nothing of legally committing to buying a property ‘off plan’ before it’s built – yet over the last few weeks, it has become the norm in the second-hand Royal Tunbridge Wells property market and they have now stolen a march and bagged some property bargains.

Normally, the face to face viewing is step one of the second-hand house buying process ... yet now it’s becoming the ‘new normal’ that have meant some Royal Tunbridge Wells agents are carrying out semi-professional video viewings or 360-degree video tours. Even homeowners are getting in on the act and managing a Facetime or Zoom video viewing by walking around their house with their mobile phone. 

Yet the Government announced on Wednesday, 13th May 2020 that the Estate & Letting Agency industry could reopen meaning people could view houses, visit agents and move home be they tenants, buyers, landlords or home sellers. This is all subject to general and specific social distancing rules, specific hygiene regulations and suitable PPE being used.

What has been happening in the last few weeks in the Royal Tunbridge Wells property market?

The average time between sale agreed and exchange/completion of contracts on a house sale (i.e. the keys and monies get sorted) is 17 to 19 weeks, which means buying today would mean you wouldn’t be getting your hands on the property until late September or October at the earliest. 

Spring is the time when most properties come onto the market, yet as one would expect, the number of Royal Tunbridge Wells properties coming onto the market has been somewhat reduced since lockdown as…

Only 27 Royal Tunbridge Wells properties have been
put up for sale in the last month

This reduction in supply of new properties coming onto the market, combined with this pent-up demand from both Royal Tunbridge Wells landlords and the ‘Boris-Bounce’, could in fact be good news for the Royal Tunbridge Wells property market, let me explain…

Rightmove stated that people going to their website initially dropped by 40% at the start of lockdown, yet now has recovered with a near doubling of people searching for properties with gardens (for both sales and renting). For many Royal Tunbridge Wells buy to let landlords (and in fact Royal Tunbridge Wells homebuyers), now is the very best time to do research into the Royal Tunbridge Wells property market. All the portals have access to 25 years of property sales with pictures, so you can compare and contrast what has happened to various different property types around Royal Tunbridge Wells to spot those under-priced bargains, meaning you can get moving quickly after lockdown.

Rather than feeling trapped or powerless, this time can be used fruitfully by Royal Tunbridge Wells buyers and Royal Tunbridge Wells sellers to get their ducks in a row

One of the biggest barriers in April was mortgage lending. In the early days of the pandemic, most mortgage lenders removed many of their best deals and enormously restricted their capacity. Currently though, we are seeing a revitalisation in the mortgage market. In May, with many mortgage products becoming accessible again for borrowers and with many mortgage companies integrating more digital processes (including Virtual Surveyor Mortgage Valuations in some cases) the mortgage market now has plenty of options available to those who are keen to obtain borrowing.

There is no doubt the Royal Tunbridge Wells housing market got off to a sturdy start in 2020. With Brexit at least partly resolved, the ‘Boris-Bounce’ was starting to take off. With Royal Tunbridge Wells house prices being robust and rental demand was high, the Royal Tunbridge Wells property market was already in a good place to deal with the subsequent Covid-19 issue.

I know there are a few doom mongers in the National Press spouting about a massive crash in the UK property market. There is a natural tendency for newspapers to latch onto the worst-case scenario in any economic forecast. Who can forget the country received similar projections in the lead-up to the 2016 Brexit vote with HMRC itself stating that UK house values would drop by at least 10% in the first 12 months should the UK vote for Brexit and 20% in two years! 

With the rollercoaster of the stock market in recent months, investing one’s money into good old-fashioned bricks and mortar has started to seem a good place again. 

Buying a property for investment means you have a tangible asset, something you can touch and feel (and understand). The returns from investing in property come from both capital appreciation and income from the rent, and yes whilst property values can go up as well as down, successful buy to let landlords are inclined to take a long-term view on their property investments. 
£992 per month
The average gross profit from a Royal Tunbridge Wells terraced/town house

To give you an example of the current buy to let returns, the average Royal Tunbridge Wells terraced/town house sells for £412,700. By taking the ‘The Mortgage Works’ BTL 5-year fixed rate of 1.64%, with only £5,094 in up-front fees, a 20-year repayment mortgage would cost you £1,246 per month or interest only mortgage would just cost £348 per month .... considering the average rent for a terraced/town house in Royal Tunbridge Wells is £1,340 per month ... even before management, tax, maintenance and other associated costs, that’s a decent gross profit (the £992 gross profit is an illustrative example using the interest only mortgage and the capital element would need repaying at the end of the term). 

Isn’t it funny the newspapers aren’t latching on to some reports to say the property market might go in the other direction? Remember – bad news sells newspapers!

So, should you wait to buy your Royal Tunbridge Wells buy to let investment?

Before you buy, consider factors like the strength of your financial future, your credit score and the current state of the property market and even more importantly, the state of the mortgage market. Look at the current interest rates, they have never been so low and deliberate the experts’ opinions and just as equally your own opinions as to whether Royal Tunbridge Wells property values are on the rise, will stay the same or are likely to fall.

Interest rates are at record lows, meaning borrowing money is cheap money now, so it may be a good time to buy, as you will pay a reduced cost for the pleasure of borrowing money to buy that investment. Yet, if you waited and Royal Tunbridge Wells property values are on the decline, it may be a good idea to wait, as you could end up getting a better deal on the same type of home, yet if that happens, access to the cheap finance might dry up (meaning you could save some purchase price, but the cost of borrowing could go up). It can be very hard to accurately predict what interest rates or property values will do, so these shouldn’t be deciding factors – but they are worth considering.

So, what will happen to the Royal Tunbridge Wells (and UK) property market?

To be honest – nobody knows. What I do know is the Swine Flu in 2009 caused some volatility in the UK property market, but the market stabilised within months. Even in disaster scenarios such as the current one, property remains comparatively stable and will continue to be one of the best places to invest in. 

Yes, we could see unemployment rise in the next 6 months (yet the Furlough Scheme has been extended until the autumn) and historically, it has been proved house price falls are not caused by high unemployment; yes GDP will drop drastically because of lockdown yet it could bounce back like it has in China; yes, the number of property transactions will drop, yet that will only really effect the pockets of Royal Tunbridge Wells removal people, Royal Tunbridge Wells solicitors & estate agents and the Chancellor of the Exchequer in lost stamp duty receipts; yes there is £82bn worth of property sales on ice during this lockdown (some of which might not complete) ... it’s all ifs, buts and maybes.

Calamity changes things: with every predicament, humanity shifts to become more productive - it’s the way it’s always been

The national debt at the end of the Napoleonic Wars of 1815 in today’s money was an eye watering £4,421,000,000,000 (£4.42 trillion) and even with the eye watering borrowing to fund Covid-19, it stands at £1,821.3 trillion – we have been here before and we came out stronger.

The Bank of England failed in 1825, yet we recovered stronger, the Great Depression of the 1930’s cut the Stock Market by 90%, yet we recovered, WW2 took national debt to 200% of GDP like it had in the Napoleonic Wars in the early 1800’s – yet we recovered, the oil crisis quadrupled oil prices in the 1970’s – and we came back …. the list goes on with hyper-inflation in the 1970s of 25%, mass unemployment in the 1980’s, Black Monday in 1987, Dot-com bubble in 2001 and credit crunch in 2008/9.  

With every economic crisis, the long-term effects of them make people look at their decision making differently

The simple fact is for decades, demand for homes has outstripped supply – hence why property values have remained so robust. People are living longer (71.1 years in 1960 and 81.1 years nowadays), the mass exodus of EU nationals has not taken place since Brexit and the birth rate has increased by 9.1% since the Millennium, which means since 2000, the country has needed at least 240,000 households more per year to satisfy the demand. On average, we have only built 150,000 households a year, meaning we have a shortfall of 90,000 households each year for 20 years … a true shortfall of 1.8m households ... and until we start building anything over that 240,000 requirement … demand will always outstrip supply – and we all know what happens to prices when that happens!

The Soothing Power of TUNBRIDGE WELLS’S Pets During Lockdown

How the pets of TUNBRIDGE WELLS are helping people in lockdown.

In this two-minute read, we look at the ways pets are bringing comfort, companionship, and calmness to people across TUNBRIDGE WELLS. And what you can do to help your furry friends in return.

It’s often said the UK is made up of animal lovers.

And since the lockdown began that love affair has grown even stronger.

According to a 2019 survey by a company called Statista, more than 40 per cent of households across the UK own pets.

Dogs and cats are the most popular, but also rabbits, turtles, indoor birds and even snakes are being kept in their thousands.

And here are four fabulous reasons why our furry friends (and all the others) are good for us, especially in lockdown.

1) During lockdown walking the dog has become an outlet for extra exercise and breaking the monotony of being stuck indoors.

2) Pets of all shapes and sizes have been providing much-needed companionship for many of us who are self-isolating or social distancing.

3) Stroking a dog, cat, or other animals has been proven to lower blood pressure and help you feel calmer, less stressed and more content.

4) Being playful with your pet increases your levels of the chemicals serotonin and dopamine, which create feel-good sensations in your brain.

For many pets, dogs, in particular, the period of lockdown has been enjoyable as they have had longer than usual walks, more cuddles, and a lot more attention from their owners and families.

But some animals, including our canine chums, need a little extra care during this uncertain period.

The renowned Battersea Cats and Dogs Home has issued advice for owners and people caring for animals during lockdown who are facing difficult circumstances. The link is at the end of this article.

From a property perspective, if you are selling or letting your property now, it’s advised that cats and dogs are kept away from anyone who is viewing it, just to be on the safe side.

At Martin & Co we want all our clients and community to know we are taking every possible step to protect people (and their pets) as we go about our work safely and sensibly.

We’d love to see photos of your handsome hounds, cute cats, happier hamsters, and any other types of pets that are helping you raise a smile during the lockdown.

Thanks for reading, and we hope you and your beloved pets stay safe and well.


PS: Here’s that link: https://www.battersea.org.uk/pet-advice/how-care-your-pets-if-youre-ill-or-have-self-isolate-due-coronavirus

Friday 8 May 2020

The Rights, Obligations & Responsibilities of the 2,167 Royal Tunbridge Wells Landlords & 5,353 Tenants During the Virus Outbreak

The last three or four weeks, unquestionably, have been one of the most life-changing times we have seen since WW2. The imminent threat of the Coronavirus has taken over the world, the UK and Royal Tunbridge Wells and will challenge you, our families, our relationships and test us all.

The drive of this worldwide action of social distancing is not just to stop you from getting ill with the virus; the bigger drive is to slow down the development of this virus so the NHS will not become overwhelmed with those who are most likely to need hospital care. Yet the issue of social distancing has certainly raised many questions around the landlord/tenant/agent relationship, so in this article I wanted to share with all the 2,167 Royal Tunbridge Wells landlords their rights, obligations and responsibilities to their Royal Tunbridge Wells tenants. I also wanted to highlight the rights, obligations and responsibilities of the 5,353 Royal Tunbridge Wells tenants in return.

These will be trying times for Royal Tunbridge Wells’ landlords and Royal Tunbridge Wells’ tenants alike, so let’s start…

A landlord has the responsibility to ensure the property is fit for habitation, so what if the Royal Tunbridge Wells landlord/agent is incapable of undertaking an emergency repair (or say the annual gas safety check) because the tenant is self-isolating or actually has the virus? The answer is the landlord should use their best efforts to fix the problem if it’s an urgent repair, yet if the landlord/agent are unable to do so they should record this fact and that it is related to the Coronavirus epidemic. One should then re-try as soon as is possible and appropriate, having full respect for information on self-isolation, personal-safety and social-distancing and ensure that you make a written note for future issue. My advice is that you or your agent (as we are with our Royal Tunbridge Wells tenants) need to uphold good lines of communication with the tenants touched by these current circumstances, so they are clear on what action you are taking and the timescales for this. 

Yet at the same time, there will be very few situations in the coming weeks when the contractors who the landlord/agent use will also be in self-isolation, meaning a handful of  the 5,353 Royal Tunbridge Wells tenants might have to wait for repairs to be sorted. We have some excellent Royal Tunbridge Wells contractors with their own backup plans and so together we will use our best endeavours to find an alternative contractor to fix any issues. If your agent has issues, then maybe we can help – do call me. Yet whatever you do, if this occurs, document everything and that it is related to the Coronavirus epidemic.

The total rent paid by Royal Tunbridge Wells’ tenants
each month is £6,150,600
It’s true the UK government has demanded that building societies and banks give a three-month mortgage holiday to those landlords that are unable to make mortgage payments. This is not free cash, the mortgage payments are basically postponed with interest to be collected at the end of this crisis, meaning your obligation as a Royal Tunbridge Wells tenant to pay the rent still exists. HM Government is offering employers an 80% wage support with the furloughing to avoid having to make people redundant and the rent for your Royal Tunbridge Wells rental home will be treated in the same way as the landlord’s mortgage.

The average Royal Tunbridge Wells rental payment currently
stands at £1,149 per month

Therefore, if you are incapable of being able to pay your rent, it will still build up and accumulate during this virus predicament and you will need to start a payment plan to pay it back on top of your normal monthly rent.  So if your rent is £1,149pm and you have already been living there for 2 months into a 12 month tenancy, there is still £11,490 to be paid over the next 10 months, so should you not pay anything for 3 months your rent would increase by 43% a month for the last seven months or you face eviction due to arrears (remember arrears have been put on hold – not removed during the virus outbreak). One option, subject to status and agreement by all parties, could be to renegotiate a new longer lease to pay off the arrears over a longer period. Again, the point here is communication from all sides – making sure there are no nasty surprises.

So, if you are in this predicament, there is a lot of help accessible from the HM Government including Universal Credit or Employment Support as soon as possible to escape any interruptions to your payments. Remember, your Royal Tunbridge Wells landlord will need proof of your Universal Credit or Employment Support claims to give to their mortgage company to be able to start the mortgage holiday, so my advice to all the 5,353 Royal Tunbridge Wells tenants is keep in contact with your agent to ensure your Royal Tunbridge Wells landlord doesn’t suffer any avoidable hardship (which ultimately may end up with your home being repossessed because the mortgage payments were missed because you were unable to furnish the landlord with your own claim documents).

Communication is the #1 priority here. Whilst most agent’s premises are closed including our own, all are open for telephone and email enquiries, with staff working from home. This is a fast-changing time for everybody, for the 2,167 Royal Tunbridge Wells landlords and 5,353 Royal Tunbridge Wells’ tenants correspondingly and we will be ever vigilant to oversee the financial and monetary backdrop in the coming months. 

These are going to be tough times for the people of Royal Tunbridge Wells (and the world), financially and mentally; yet together we will come out of this stronger. By working together, working in partnership, again keeping lines of communication open with regards to your finances and your housing, by keeping safe and protecting our families and most of all by being kind to each other ... we will get through this, a little battered and bruised – yet hopefully better human beings for it?