Sunday 26 September 2021

Royal Tunbridge Wells Buy-to-Let Market on the Rise as Returns Rise by 30.9% in 5 Years


Tunbridge Wells landlords are becoming progressively more self-assured about expanding their rental portfolios; as Tunbridge Wells rents rise, mortgage interest rates fall and demand for decent Tunbridge Wells rental properties outstrips supply.

A number of reports nationally would suggest around a third of UK ‘portfolio’ landlords (i.e. landlords with more than one rental property) are actively looking to expand their rental portfolios in the next 12 to 18 months, that would locally mean…

712 Tunbridge Wells ‘portfolio’ landlords are looking to add to their rental portfolio by the end of 2022.

The pandemic has had a substantial change to what we want from a home. Many people think that relates just to homeowners, yet nothing could be further from the truth as it also applies to tenants.

Homeowner or tenant, many of us have spent a lot of time away from places of work. Many office workers face the outlook of the combination of working from home as well as at the office, meaning a change in what people look for in their home. People (including tenants) are looking for larger properties, with extra rooms for office space and decent sized gardens or to be closer to outside green space.

So, let’s look at the ‘scores on the doors’ as to why Tunbridge Wells landlords are on the up…

Tunbridge Wells house prices are 9.7% higher than 5 years ago.

Because some Tunbridge Wells first-time buyers are being priced out of the market due to these house price rises, they are being forced back into the rental market. Add the extra demand of the 1 in 10 Tunbridge Wells house sellers, who in the last 12 months have had to go into rented accommodation instead of buying, and this has created increased demand. Meaning…

Rents today in Tunbridge Wells are 5.7% higher than a year ago and 21.2% higher than 5 years ago.
The average rent of a Tunbridge Wells property today is £995 pcm.

In previous articles on the Tunbridge Wells property market, I was talking about the lack of properties to buy – yet that issue is also there in the British rental property market. Now let’s look at the supply of rental properties.

Would it surprise you that the number of private rented homes in the UK has fallen in the last 12 months by just over 2.5%?

Why? One reason has been many ‘accidental’ landlords have used this housing market to sell their property for a good price. That means the supply of available rental properties has decreased. The perfect storm of increased demand and lower supply, and with many Tunbridge Wells tenants competing for those larger Tunbridge Wells homes, they may find Tunbridge Wells rental prices pick up even more over the next year.

What about buy-to-let mortgages for Tunbridge Wells landlords?

The banks all but withdrew from buy-to-let lending in the first lockdown. Yet, since last summer, things have settled down and during 2021 there has been a mortgage price war.

Tunbridge Wells landlords can borrow 60% of the value of their BTL property on a two-year fixed rate of 1.18% from Platform and even those with a 20% deposit (that’s borrowing 80%) can borrow that money at 2.49% 2-year fixed rate from The Mortgage Works. Those looking to fix for a little longer can get 1.44% from The Mortgage Works and 1.79% at 75% loan to value from Santander.

(It must be noted there are some fees to these mortgages, and you must take advice from a qualified mortgage advisor before deciding which mortgage is best for you).

So, is now the best time to invest in Tunbridge Wells buy-to-let property?

If you are attracted to invest in Tunbridge Wells buy-to-let, it’s vital to do your homework first – particularly if you are new to the game.

When estimating the expected rental returns on investment, capital growth and yields, many Tunbridge Wells landlords look to what has happened with house prices and rental prices, yet past performance does not always deliver a future guaranteed return.

Smart Tunbridge Wells landlords will speak with agents like myself and others in Tunbridge Wells, prudently researching the Tunbridge Wells property market to discover what types of properties are in high demand (and short supply) from tenants.

Whether you are a landlord of ours or not, please feel free to drop me a line via email or social media for no nonsense advice on the important matters to look out for before investing in Tunbridge Wells buy-to-let

Thursday 9 September 2021

Royal Tunbridge Wells Homes Asking Prices Down 1%

With Rightmove announcing a national drop of 0.3% in average asking prices in August, some are asking if the steam has been let out of the property market. Yet with the gains we have seen in the last 12 months, is this just a minor bump in the road? Alarm bells normally ring when new homeowners coming to the market for the first time are having to lower their initial asking price when compared to the market as a whole.

So, what is actually happening in the national and local property market to asking prices and the number of properties for sale, and where does that leave Tunbridge Wells homeowners and Tunbridge Wells landlords?

1 in 7.4 homes already on the market today have reduced their asking price in the last two weeks

That means new sellers bringing their property to the market for the first time, are having to curtail their initial asking price to remain competitive. Normally, this should ring alarm bells, particularly when this is the first time this has happened in 2021. Therefore, it’s vital to ‘look under the bonnet’ of the figures and see what, exactly, is happening locally.

Average asking prices for Tunbridge Wells homes are 1% down compared to July.

However, that figure hides some interesting anomalies - the average asking price of Tunbridge Wells detached houses are 3% lower than in July (that doesn’t mean they have dropped in value by that much – just the headline asking prices) whilst semi-detached properties have seen the average asking price rise by 5% in the last month.

So, if this is what is happening to Tunbridge Wells asking prices, what about the number of properties for sale. Looking nationally first…

there are currently just 285,970 properties for sale in the UK, which means 1 in 67 British homeowners are presently on the market – interesting when compared to 2005, it was 1 in 13.5 homeowners on the market.

With such little supply of properties for sale nationally, demand remains robust. Yet the property buyers in the market are being a little more reserved with the offers they are making compared to the Stamp Duty holiday frenzy times seen earlier in the year. They will pay handsomely, and yet top dollar won’t offer the ‘crazy price’ levels some Tunbridge Wells buyers were offering in the spring – hence the recent reduction in asking prices to a more realistic level.

Looking at the movement in the available properties for sale and to rent in Tunbridge Wells over the last few months, an interesting picture arises.





The number of Tunbridge Wells properties for sale (and rent) is still at record lows when compared to the 30-year long term average.

The choice for Tunbridge Wells tenants is limited as well, as many tenants aren’t moving home. With the additional increase in demand from 1 in 10 Tunbridge Wells homeowners choosing to go into rented accommodation (albeit temporarily) Tunbridge Wells landlords with exceptional properties are getting decent rents, as discussed in a recent article I wrote about the level of rents in Tunbridge Wells.

With the current level of Tunbridge Wells properties for sale being around 40% to 50% below the long-term average (depending on the type of Tunbridge Wells property you own),

it means when a Tunbridge Wells property is properly priced, given the intense competition, often it comes down to the position of the buyer and not the price they are prepared to pay.

When I say, “position of the buyer”, I mean, do they have a chain, do they have to sell their own property to buy another property?

Many Tunbridge Wells house sellers are selling their home before they buy. Selling before you buy can be a fruitful approach in a fast-moving property market. That does mean your own purchaser will have to demonstrate a certain amount of patience whilst you wait for the right home to come on to the housing market.

However, because it is currently taking on average 19 weeks between sale agreed and exchange of contracts, with mortgage providers and solicitors taking their time due to the backlog, this often allows you to potentially play catch-up if it takes a couple weeks to find the right property for you.

Many home sellers are going even further by selling their Tunbridge Wells home first and then going into transitional rented accommodation. This subsequently puts them in pole position when their forever home comes up for sale as they have no chain. Although this takes a lot of determination and resilience, it does mean you will be in the very best position when the property of your dreams comes up.

The choice they say, as always, is yours!

If you would like a chat about the Tunbridge Wells property market and the best thing for you and your personal circumstances, do drop me a line. In the meantime, what are your thoughts on the current Tunbridge Wells property market? Do share in the comments.