Thursday, 25 March 2021

Royal Tunbridge Wells Property Market Improved by 27.1% Over Pre-Pandemic Levels

Has there ever been a better time for Tunbridge Wells home sellers?


The Tunbridge Wells property market, for people looking to sell, is at its sturdiest for at least the last five years with home buyers jumping onto the Tunbridge Wells property ladder with abandon.


Tunbridge Wells house prices are anticipated to rise throughout 2021 after the Stamp Duty cut (and subsequent extension until the summer/autumn) and the newly revealed 95% mortgages for Tunbridge Wells first-time buyers (and Tunbridge Wells homeowners with minimal equity). 


In addition, the continued low interest rates and the demand for larger homes because of lockdown, means the Tunbridge Wells property market should remain bullish for a while. There is a surge in potential buyers putting themselves on mailing lists with Tunbridge Wells estate agents, making the biggest disparity between supply and demand for Tunbridge Wells property for many years. 


Fears of a cliff edge for the Tunbridge Wells housing market at the end of March have dispersed, somewhat due to the Stamp Duty tax deadline extensions, but also because the elevated level of buyer demand caused by the three lockdowns has continued to swell since the start of 2021 meaning that today …


54% of Tunbridge Wells properties on the market are Sold (STC)


Interesting, when utilising data from website, the Tunbridge Wells average for the last five years has only been 42%, meaning there has been an uplift of 27.1% in the proportion of Tunbridge Wells properties sold (STC) compared to that five year average.


Yet what can’t be forgotten is that 9 out of 20 Tunbridge Wells house sellers are also Tunbridge Wells house buyers as well, so whilst they do indeed achieve a higher price for their Tunbridge Wells property, they also have to pay more for the Tunbridge Wells property they want to buy.


So, how much will Tunbridge Wells house prices rise by?  


Like all things in life, it’s all about demand and supply. I have discussed the demand, yet what about the supply of properties for sale? 


There are 3% fewer Tunbridge Wells properties for sale today compared to 1 year ago


Whilst February saw a lower than normal level of new properties coming onto to the Tunbridge Wells property market, the easing of lockdown road map and faster rollout of the vaccine is also persuading more Tunbridge Wells homeowners (especially those older Tunbridge Wells homeowners who have had their jabs) to start making the first steps towards moving home in 2021.


This will mean there will be more Tunbridge Wells properties available for sale in the conventionally busier post Easter market in the coming weeks and months which should cause more equilibrium and help keep Tunbridge Wells property prices in check.


These are interesting times for the Tunbridge Wells property market. If you are a Tunbridge Wells homeowner or Tunbridge Wells landlord looking to buy or let your Tunbridge Wells property in the coming weeks or months, don’t hesitate to drop me a line to discuss what all the points raised in this article mean to you.

Tuesday, 9 March 2021

Royal Tunbridge Wells Home Buyers £14,157,329 Windfall as Stamp Duty Holiday Stretched to September...

  ... and new 5% deposit mortgages for Royal Tunbridge Wells first-time buyers

The Chancellor Rishi Sunak announced two initiatives to keep the Royal Tunbridge Wells property market firing on all cylinders into 2021. 


Firstly, the £500,000 zero-rate Stamp Duty band has been extended to the 30th June 2021. After then it will phase down to £250,000 for an additional three months, returning to the pre-pandemic levels on the 1stOctober 2021. Secondly, Mr Sunak announced a scheme that will allow Royal Tunbridge Wells first-time buyers to buy their Royal Tunbridge Wells home with a 5% deposit from this April. Let me look at what each initiative means to the Royal Tunbridge Wells property market.


1.    Stamp Duty Holiday extension for Royal Tunbridge Wells home buyers


Coming out of the first lockdown in the early summer of 2020, there was a lot of apprehension that the British property market would flounder. Therefore, when the Stamp Duty Holiday was announced back in July 2020 to boost the property market, the deadline was set at the 31st March 2021.  Little did anyone know of the snowball effect of people wanting to move because of the initial lockdown in the spring of 2020, the pent-up demand following the conclusion of the EU negotiations with the subsequent ‘Boris Bounce’ and then the Stamp Duty Holiday which made the perfect storm for what has been the busiest property market in Royal Tunbridge Wells since 2001/2.


The average stamp duty paid by a

Royal Tunbridge Wells homebuyer is £15,765


The reason the Stamp Duty extension is important is that many estate agents and solicitors have been warning for the last couple of months that home buyers would pull out of property deals or renegotiate if they could not complete their sale in time before the Stamp Duty Holiday ended.


So, by phasing down the Stamp Duty Holiday, this will allow some breathing space for burdened solicitors and mortgage lenders, thus decreasing the number of buyers pulling out of their property purchase because they unexpectedly have to find up to an extra £15,000 in Stamp Duty when property sales do not complete on time.


There are currently 898 properties that are sold STC in Royal Tunbridge Wells alone and the vast majority of those will save money on their stamp duty because of this extension



So, what does the Stamp Duty extension mean for Royal Tunbridge Wells house prices?


The extension has heightened confidence in the Royal Tunbridge Wells property market. The Government watchdog ‘The Office for Budget Responsibility’, has predicted that house prices in 4 years’ time will be just over 13% higher, compared to the pre-Christmas predicted figure  of 11% growth (over the same time frame).


 2. 5% deposit mortgages for Royal Tunbridge Wells first-time buyers


From next month, Royal Tunbridge Wells first-time buyers will be able to buy Royal Tunbridge Wells homes worth up to £600,000 with a 5% deposit and a Government-backed mortgage with a fixed rate of up to 5 years.


Rishi Sunak wants to turn the millennial ‘Generation Renters’ into ‘Generation Buyers’ and believes this initiative should be able to help two million people get on the property ladder. When we look at what that would mean for Royal Tunbridge Wells, I estimate …


1,860 Royal Tunbridge Wells people could be helped onto the Royal Tunbridge Wells property ladder with these 5% deposit mortgages


The Government backed scheme will be open to Royal Tunbridge Wells first-time buyers for 21 months (until the end of 2022) and available from lenders including NatWest, Lloyds and HSBC (plus others to be announced soon). It will be available on all Royal Tunbridge Wells homes new or second hand (previous schemes applied to new homes only).


5% deposit mortgages were all but withdrawn from the market at the start of the pandemic in spring 2020 with an almost default minimum deposit of 10% (even as high as 15% in the autumn just gone) putting homeownership out of reach for all but the wealthiest Royal Tunbridge Wells first-time buyers.


I must admit I found it a scandal that homeownership among the 25 to 34 year olds plummeted from 69% in 1981 to 36% by 2014, although with certain Government incentives and low interest rates since then, that had risen to 41% by last year, but it’s not enough


With so many young families paying huge sums in rent, who could effortlessly afford to make mortgage repayments on the same property, they haven’t been able to save enough for a 10% initial mortgage deposit, let alone 15%.


Yet now with these new 5% deposit mortgages, many Royal Tunbridge Wells first-time buyers will be able to afford to buy their first home in Royal Tunbridge Wells. Banks will typically lend between four and a half and five times the gross annual income – this means with a modest 5% deposit; many Royal Tunbridge Wells 20 and 30 somethings will now be able to buy their first home. Just before I finish this topic, the 5% deposit mortgages will also be available to current Royal Tunbridge Wells homeowners who don’t have the equity built up in their existing home – thus helping second or third (or more) time Royal Tunbridge Wells buyers as well.


How do both these changes effect Royal Tunbridge Wells buy-to-let landlords?


I know many of you Royal Tunbridge Wells landlords are adding to your Royal Tunbridge Wells rental portfolio because of the Stamp Duty Holiday and with the extension, you too will save some money from it. The issue of first-time buyer mortgages does mean the demand for private rented accommodation in Royal Tunbridge Wells might not be as strong in the coming decade.


Don’t get me wrong, tenant demand will continue to outstrip supply of Royal Tunbridge Wells rental properties for the foreseeable future, yet the tenant/landlord balance could alter slightly in the medium term. Royal Tunbridge Wells landlords need to take a long hard look at their properties and ascertain if they are fit for purpose both now and into the 2030’s. Tenants are becoming a lot more demanding of what their rental property offers. Wood chip wallpaper, avocado green bathroom suites and kitchens fitted in the 1990’s (or before) simply won’t cut the mustard in the next decade. 


The demand from Royal Tunbridge Wells tenants for properties with larger gardens, or the ability to keep pets or an extra reception room garden/office to allow them to enjoy their rented home more and also being able to work from home will ensure greater demand for your rental property … and the best bit, they will pay handsomely for that in higher rent.


If you are a Royal Tunbridge Wells homeowner, buyer, tenant or landlord and you want to discuss your options on selling, buying or renting a property in Royal Tunbridge Wells and the surrounding area, do not hesitate to contact me personally.