Royal Tunbridge Wells tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is talking about Royal Tunbridge Wells property. As a property agent I like to comment on the Royal Tunbridge Wells property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Royal Tunbridge Wells as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Royal Tunbridge Wells has broken through the £1100 a month barrier as the average rent for a property in the town, now stands at £1144 per month, and whilst this was a drop of 1.6 % last month, rents for new lets are 7% higher than they were 12 months ago.

House price inflation has certainly eased in Royal Tunbridge Wells from the heady days of 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Royal Tunbridge Wells rents are a sign that the Royal Tunbridge Wells economy is picking up. 

This means Royal Tunbridge Wells landlords are continuing to capitalise on the Royal Tunbridge Wells property market. The most recent Land Registry data suggests the annual property price rises in the town have eased over 2015, leaving property values 8.41% higher than 12 months ago, so as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, there’s rarely been a better time to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the town, different types of properties are experiencing quite different changes.  For example, the average length of time the 32 Royal Tunbridge Wells properties up for rent between £250 to £500 per month is 81 days, whilst the average length of time the 126 properties at £500 to £1000 per month is 47 days and 84 properties that fall into the £1000 to £2000 per month price bracket is 42 days.

When you start comparing different parts of Royal Tunbridge Wells, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the Royal Tunbridge Wells Property Blog. In the Royal Tunbridge Wells Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Royal Tunbridge Wells property Blog 

Royal Tunbridge Wells Property Market - Asking Prices Drop but Values rise

Those of you who regularly read my weekly articles in the Royal Tunbridge Wells Property Blog will know I like to keep abreast of the Royal Tunbridge Wells property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.

 Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the town have dropped, yet property values have increased.  The average asking price of a Royal Tunbridge Wells property, according to Rightmove, fell 1.2% this month yet the average value of a Royal Tunbridge Wells property rose by 0.9%

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So how does this relate in monetary terms?  This anomaly has driven the average asking price of a Royal Tunbridge Wells property down slightly to £492,400 whilst the average value is now £434,900.

So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without research and can result in overpriced properties that don't sell. As the Summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property.

On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, in a nutshell, Royal Tunbridge Wells property values are continuing to rise and those homeowners in Royal Tunbridge Wells who have properties on the market, last month on average, reduced their asking prices .. great news for property owners and buyers alike!

In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Royal Tunbridge Wells home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate.

Most homeowners don’t want to sell and have nothing to buy.

But that’s the beauty of the much maligned English and Welsh house buying process. You can find a purchaser for your property, then ask them to wait. By agreeing a sale (subject to contract) before you try to buy sounds concerning to many, but with fewer properties for sale you need to have a buyer for your property or you will be treated as a less serious buyer yourself. If you cannot find the right home for you, you can slow the deal with your purchaser until it comes along. If nothing suitable does comes along and you lose your buyer then the worst outcome is that you have to find another purchaser or take your property off the market and stay put for now, and as long as you mention this at the start they must not commit to any costs until you have agreed your onward purchase.

However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 160 flats for sale, 54 terraced houses and over 80 semis for sale in Royal Tunbridge Wells.  Landlord/Buy to let investors can normally pick up some bargains in the Autumn months, as sellers who are selling their homes often have a pressing need to sell by this time.

The types of houses a Royal Tunbridge Wells landlord typically buys, are not the same types as the homeowners wanting to move to a posher area of the town as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones). There are in fact too many of these smaller properties for sale .. just look at the numbers of properties for sale (mentioned in the previous paragraph).

If you are a landlord or thinking of become one for the first time, and you want to read more articles like this about the Royal Tunbridge Wells Property Market together with regular postings on what I consider the best buy to let deals in Royal Tunbridge Wells, out of the many properties on the market,  irrespective of which agent is selling it, then you might like to visit the Royal Tunbridge Wells Property Blog

Claremont catchment area properties outperform Royal Tunbridge Wells average by 59.04%

I was having a chat with a Royal Tunbridge Wells property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property.  Anecdotally, I have always known this to be true, a good school creates good demand and good demand does affect house prices.  So, I asked my colleagues on the front line, who take the phone calls from people putting themselves on our mailing list and they confirmed that most people cite location as their number one factor.

After looking through our mailing list, it confirms there is a close correlation between the high demand areas of Royal Tunbridge Wells and the close proximity to a good primary school.  Talking to my team in a recent morning meeting, they agreed many people would look to increase their budget quite significantly, whilst others would consider downgrading their property requirements to be close to a good primary school.

Those of you who regularly read this blog will know I like a challenge, so I decided to look at the science behind these assumptions.  According to the SchoolGuide website, Claremont Primary School is one of the best primary schools in Royal Tunbridge Wells.  Its figures are certainly impressive. Their last Ofsted Report classified it as Outstanding, 92% of 11-year pupils achieving Level 4 or above in maths, reading and writing whilst 46% of them achieved level 5.  Finally, the schools’ KS2 rating was classed as Excellent.

Looking at property sales within half a mile of Claremont, property values have risen in value since 2001 by 161.46%, whilst according to recent figures, the Royal Tunbridge Wells average as a whole has risen in the same time frame by 101.52%.

That means the parents of Claremont have seen the values of their properties rise proportionally 59.04% more than the Royal Tunbridge Wells average ... interesting don’t you think?

However, whilst a good primary school significantly contributes more to house prices, the same can’t be said for secondary schools. There are two reasons for this, firstly, as secondary schools are much larger, so their catchment areas are correspondingly much larger, meaning parents don’t need to live so close to the school. Secondly, in the UK, whilst the difference between the top 25% and bottom 25% of secondary schools is not insignificant, in the primary school sector, the difference between the top 25% and bottom 25%, according to the London School of Economics, is considerably and significantly more.

Many other Royal Tunbridge Wells landlords, both who are with us and many who are with other Royal Tunbridge Wells agents, like to pop in for a coffee or ring/email us to discuss the Royal Tunbridge Wells property market, to consider how Royal Tunbridge Wells compares with its closest rivals and hopefully we can answer all their questions. You must take lots of advice and seek out the best opinion. One good source of opinion, specific to the Royal Tunbridge Wells property market is the Royal Tunbridge Wells Property Blog. I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion.

Royal Tunbridge Wells’s £1.9 billion Mortgage Powder Keg

Eight years ago, in the summer of 2007, hardly anyone had heard of the term ‘credit crunch’, but now the expression has entered our daily language and even the Oxford Dictionary.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Royal Tunbridge Wells Property market, but in November / December 2007, and for the following seventeen months, Royal Tunbridge Wells property values dropped each and every month like the proverbial stone. The Bank of England soon realised in the late summer of 2008 that the British economy was stalling under the continued pressure of the Credit Crunch. Therefore, between October 2008 and March 2009, interest rates dropped six times in six months from 5% to 0.5% to try and stimulate the British economy. 

Thankfully, after a period of stagnation, the Royal Tunbridge Wells property market started to recover slowly in 2010, but really took off strongly in late 2013 / early 2014 as property prices started to rocket. However, the heat was taken out of the market in late 2014/early 2015, with the new mortgage lending rules and some uncertainty, when some people had a dose of pre–election nerves.  

With the Conservatives having been re-elected in May, the Royal Tunbridge Wells property market regained its composure and in fact, there has been some ferocious competition among mortgage lenders, which has driven mortgage rates to record lows. Whilst I have no actual figures to back this up, I know an awful lot of long serving bank managers, mortgage arrangers and people in the finance industry, all of whom have told me on previous occasions when interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise that was the catalyst for many homeowners and landlords to remortgage but the second or third increase.  The reason being that it was only by the time of the third rate rise,  it started to hit the wallet.  However, the issue is, by the time of the second or third rate rise the best fixed rates, were in all instances, no longer available as they had been pulled by the banks months before.

But here is the good news for Royal Tunbridge Wells homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  I read that the well respected UK financial website Moneyfacts said only a couple of weeks ago, the average two year fixed rate mortgage has fallen from 3.6% twelve months ago to just under 2.8%.

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK.  So what about Royal Tunbridge Wells?  In Royal Tunbridge Wells, if you added up everyone’s mortgage, it would total £1.9 billion.  Even more interesting is when we look at Royal Tunbridge Wells and split it down into the individual areas of the town,

• TN1 - Royal Tunbridge Wells town centre £279.2m
• TN2 - Pembury £613.3m
• TN3 - Langton Green, Groombridge, Frant, Speldhurst, Lamberhurst £352.3m
• TN4 - Southborough £683.3m

Since 1971, the average interest rate has been 7.93%, making the current 0.5% very low.  So, if interest rates were to rise by only 2%, according to my research, the 4,636 Royal Tunbridge Wells homeowners, who have a variable rate mortgage would, combined, have to pay an approximate additional £21,660,000 a year in mortgage payments.  That means every Royal Tunbridge Wells homeowner with a variable rate mortgage, will on average have to pay an additional £4,672 a year or £389 a month in interest payments.

 I know over the last couple of posts, I have talked about mortgages a lot however, I am not a mortgage arranger but a letting / estate agent and as regular readers know, I always talk about what I consider to be the most important issues when it comes to the Royal Tunbridge Wells Property market and at the moment, in my humble opinion, this is the most important thing!

Buy to let is all about maximising your investment, increasing income and reducing costs.  I give advice, opinions, thoughts, concerns, worries, expectations and fears about the Royal Tunbridge Wells Property market in my blog on the Royal Tunbridge Wells Property Blog.  If you are interested in the Royal Tunbridge Wells Property Market, you might learn something by visiting the blog.

Interest rates set to rise – How will that affect the Royal Tunbridge Wells property market?

A couple of weeks ago, I mentioned in this blog about how the Bank of England has been indicating recently that UK interest rates will be going up in the not too distant future. Therefore, if you are one of the 8,133 homeowners in Royal Tunbridge Wells, who own your own home with a mortgage, then you need to consider your options and start to budget for an interest rate rise. However, if you are a landlord, who owns one of the 5,075 rental properties in the town, whilst your exposure to interest rate rises is lower, it is most certainly something you should be aware of.

Since the spring of 2009, British interest rates have been at a record low of 0.5%. It’s not a case of if, but when, they will rise. Some people think it will be before Christmas, although I am of the opinion, it will early in the New Year around Easter time, when they do rise. I also expect those rises will be slow, steady and limited. It depends on what is happens to UK wage rises, UK inflation and the general state of the British economy. Nevertheless, as much most of us in Royal Tunbridge Wells would love to pull the shutters and stick two fingers up to the world, we have to recognise we are part of a global economy and global economic worries still exist to prevent an abrupt and instantaneous rate rise.

Those Royal Tunbridge Wells landlords, who do have a mortgage, need to realise that as interest rates rise, their monthly mortgage costs rise. It’s easy to say you will look at your mortgage next month, then before you know it, Christmas will be here!  Don’t forget, mortgage lenders have always removed the juicy low rate mortgage deals a few months before interest rate rise. Speak to a qualified mortgage arranger, there are lots of them in Royal Tunbridge Wells and seriously consider fixing your mortgage rate now.  You didn’t buy your Royal Tunbridge Wells buy to let property for it to become a millstone around your neck. It’s all about mitigating your costs and maximising your income to make your Royal Tunbridge Wells buy to let property the investment you want it to be.

However, on the other side of the coin, two in three landlords who have bought property since 2007, have done so without a mortgage. A rise in interest rates might be a good thing. Let me give you some background first, then I’ll explain why. Royal Tunbridge Wells landlords have see their return on investment for their Royal Tunbridge Wells buy to let property, over the last couple of years, perform very well indeed with Royal Tunbridge Wells property values rising by 28.43% since the Spring of 2009. However, when rates do rise, whilst more expensive mortgage rates will ease the demand for borrowing, on the other hand, it may temper house price growth, making the property market more competitive... and therefore, we should see the return of some bargain property buys in Royal Tunbridge Wells!

Finally though, can I ask all Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords, who have a mortgage that isn’t fixed, they need to recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels.  I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage arranger and, if appropriate, fix your mortgage before interest rates rise. Don’t say I didn’t warn you!

In the meantime, if you are a landlord looking for a bargain now, don’t despair ... there are plenty out there, if you know where to look! One place is Rightmove, another Zoopla and another OnTheMarket. However, sometimes, you can’t see the wood for the trees. At the time of writing, Rightmove had 422 properties for sale in Royal Tunbridge Wells, Zoopla 232 properties for sale in the town and OnTheMarket 178 properties ... where do you start? 

A lot of savvy Royal Tunbridge Wells landlords like to visit the Royal Tunbridge Wells Property Blog  where, irrespective of which agent is selling it, I regularly post what I consider out of the hundreds of properties on the market, to be the best buy to let deal in Royal Tunbridge Wells.   

Crisis in the Royal Tunbridge Wells Property Market ..probably?

I don’t know about you, but if you watch Sky News every waking hour or read the newspapers, it always seems we as a Country, Europe or the World seem to lurch from one crisis to another. Another week, another crisis averted. It was only last summer the soothsayers were predicting the end of the world over the supposed house price bubble that many believed was developing in the South. Property prices were rising at 20%+ per annum in London, only for things to ease as the property market in the Capital showed a controlled slowdown and cooling in activity with price growth easing to a more realistic 8% to 9% per annum. Interestingly, there was no panic when some modest price drops were seen in some of London’s highest priced suburbs.

However, this month’s crisis is the buy to let boom and as George Osborne always likes to be topical, in the July emergency budget, he declared that he will start to scale back, from 2017, the tax relief that those high income tax rate landlords with a mortgage have benefited from. The Daily Mail ran headlines stating it was the end of the private landlord; predicting many landlords will give up on buy to let altogether and we will be inundated with rental properties up for sale as landlords feel squeezed from the market.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy to let property market could destabilise the whole UK property market. He was concerned landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

End of the world then?   .. this week, yes probably, but next week .. that’s another story!  Before we all go and live like a hermit in the Scottish highlands, let me explain to you my perspective on the whole subject. As I mentioned a few weeks ago, two thirds of buy to let properties bought in the last eight years have been bought mortgage free – so they won’t be affected by the Chancellors’ tax changes.  Also, something I feel is often overlooked but very important, is the fact that landlords historically have only been able to normally borrow up to 75% of the value of the rental property.  In the last property crash of 2008, property values dropped by the not so insignificant figure of 17.93% in Royal Tunbridge Wells, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no landlord would have been in negative equity in Royal Tunbridge Wells.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy to let, and the property market as a whole, will carry on relatively intact. It’s true reducing tax relief will hit landlords who pay the higher rate of income tax and this may slightly diminish buy to let as an investment vehicle, but I doubt people will sell. Many landlords have been lazy with their investments, buying with their heart, not their head. You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Royal Tunbridge Wells property market as a buy to let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Royal Tunbridge Wells buy to let market still offers good investment opportunities to new and old alike. Those who have bought in the last twelve to eighteen months have reaped the benefit from buying in Royal Tunbridge Wells, because the town offered a combination of reasonable house prices with subsequently increasing rents.  Property values have risen by 13.18% in the last eighteen months in Royal Tunbridge Wells, whilst looking at rents, in Q2 2015, average rental values for new tenancies were 11% higher than Q2 2014, which is particularly interesting as they only rose by 4.5% between Q2 2013 and Q2 2014.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Royal Tunbridge Wells Property Blog where I have similar articles to this about the Royal Tunbridge Wells property market and what I consider to be the best buy to let deals around at anyone time in the City, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Royal Tunbridge Wells .. you are missing out! .. 

Royal Tunbridge Wells Property Values 8.6% higher than year ago

Royal Tunbridge Wells property values rose by 0.3% last month, meaning they are 8.6% higher than 12 months ago. Overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the city, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Royal Tunbridge Wells property market), the steady long term growth in Royal Tunbridge Wells property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Royal Tunbridge Wells property market is likely to continue in the second half of 2015.

However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Royal Tunbridge Wells property market.  The two main points being low interest rates and a lack of supply of property.

Interest rates first - Mark Carney (Chief of the Bank of England) said in a speech a few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people that had a mortgage (57% to exact) had a variable rate mortgage, compared with more than one in seven (73% to be exact) in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going on one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, the affect on home movers sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth.

Shortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Royal Tunbridge Wells is at an all time low. One reason is the large number of buy to let landlords who have bought Royal Tunbridge Wells property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market ... thus restricting supply and sales. In fact over the last four months, only 7,197 properties in the Kent County Council area have changed hands and sold, compared to 8,030 in the same time frame in 2014, a not so insignificant drop of 10.37%. 

If you are planning on investing in the Royal Tunbridge Wells property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Royal Tunbridge Wells Property Blog

My concerns about the Royal Tunbridge Wells Property market

I am genuinely concerned about the Royal Tunbridge Wells property market, but in a way that might surprise you.  Rightmove announced that average ‘asking prices’ fell slightly last month by 0.4% in the South East, leaving them 5.8% higher than a year ago.  Whilst it could be said that monthly change is very modest, in the same period a year ago, we saw a monthly fall of 0.6% in the South East, which is more the norm given the onset of  schools breaking up and everyone going on holiday.

Looking at all the data on the Royal Tunbridge Wells property market; putting aside the need for more houses to be built in the next decade to balance out the increase in population (helped in part by inward European migration) but not matched by a similar increase in housing being built; my research shows there is a widening gap between what property buyers want and what is available to buy. In a nutshell, many more buyers are looking for the smaller one and two bed properties (the typical semi detached and smaller terraced houses/apartments), whilst there is an oversupply of the four and five bed properties, which are the typical large detached properties available.

Demand for smaller properties comes from both first time buyers and the growing number of buy to let landlords, where it is more cost effective and efficient to buy smaller properties to let out compared to larger properties which tend to offer poorer returns.  Also, landlords with larger loans (on those larger more expensive properties) will also be hit harder with the changes in the way tax is paid on buy to let investments, which start in 2017.

If you recall, a few weeks ago I did some research on how different types of properties had performed in Royal Tunbridge Wells since the year 2000.  I revisited those calculations and it hit me how different types of properties had performed over the last 15 years.  In a nutshell, this mismatch of demand and supply isn’t a new phenomenon, it’s been happening under our noses for years!

In the last 15 years, the average terraced house in Royal Tunbridge Wells has risen in value from £122,243 to £330,928 whilst the detached house has risen in value from £307,777 to £809,383.  Nothing seems amiss until you look at the percentage growth.  The terraced has grown in value by 171% whilst the detached by only 163% meaning the gap between the inexpensive terrace’s and expensive detached properties has in percentage terms narrowed (this isn’t just a Royal Tunbridge Wells thing, it has happened all across the Country).

I am concerned because more houses need to be built, not only in Royal Tunbridge Wells, but in the South East and the UK as a whole.  In particular, there is specific need for more affordable starter homes for the growing demand from both tenants (and the landlords that will buy them) and first time buyers.  The Tories need to face up to the fact that unless they can get the builders, the planners (to release more building land), the banks (to finance it) and themselves together, to ensure long term plans can be made, and implemented, this issue will continue to worsen.

The country needs 200,000 houses a year to be built to keep up with demand, let alone reverse the imbalance between demand and supply.  Last year, only 141,040 properties were built, the year before 135,510 and 146,850 in the year before that.  This means only one thing for Royal Tunbridge Wells landlords.  Unless David Cameron starts to rip up huge swathes of the British countryside and build on acres and acres of green belt, demand will always exceed supply when it comes to property for the foreseeable future.

Therefore, investment in the local Royal Tunbridge Wells property market as a buy to let investment could be the best move to make as the stock market investments are possibly on the wane.  Everyone is different and trust me, there are many pitfalls in buy to let.  You must take lots of advice and seek out the best opinion.

Royal Tunbridge Wells – The 10 year Time Bomb on Home Ownership

Many people think the British obsession with owning your own home started with Thatcher in the early 1980’s, when she allowed council tenants to buy their council houses under the right to buy scheme. However, the growth actually started just after the Second World War. Looking at the country as a whole in 1951 30% of residential property was owner occupied then, every ten years that rose incrementally to 39% by 1961; 51% by 1971; 58% by 1981 and 68.07% by 2001 but after that, it dropped to 63.4% by 2011 and continues to drop today.

Young adults tend to start to think about settling down and moving out of the family home in their early-mid twenties.  After a couple of years, they will have a choice of either buying their first house (albeit with a mortgage) or decide to privately rent for the long term (because the Council House waiting list is measured in decades at the moment!). The ratio of people owning a house with a mortgage verses privately renting is an extremely important guide to what people are doing about their housing needs and what their attitude to renting vs buying is.  With that in mind, within the next ten years, I am predicting there will be more people renting privately in Royal Tunbridge Wells than own a property with a mortgage and that the British love affair of property ownership will fade as the decades roll on.

This is a really important change in the way we live, as I explained to a local Royal Tunbridge Wells landlord the other day, knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in the town; Royal Tunbridge Wells property prices and Royal Tunbridge Wells rents.

In the Tunbridge Wells Borough Council area as a whole there are 7,412 households that are privately rented via a landlord or letting agency verses 16,264 households that are owned with a mortgage, so my prediction appears to be outrageous. However, when we look deeper (as the devil is always in the detail), 7,986 of those 16,264 households are 35 to 49 year olds and 5,055 are households of 50 to 64 year olds. I would expect all the 50+ years to be paying their mortgage off as they enter retirement as I would with some of the people in their mid/late 40’s. 

Meanwhile, at the other end, in the 25 to 34 age range (the age most people bought their first home in the 1970’s/80’s/90’s) only 2,100 of the 4,433 households occupied by those 25 to 34 year olds are owner occupiers with mortgages, because 2,333 households are privately rented. This means only 47.3% of 25 to 34 year olds have bought their house (with a mortgage). Twenty years ago, that would have a much higher percentage of homeowners (between 75% to 85%).

It can be seen that as the older generation pay their mortgages off as they start to get to retirement and the younger generation aren’t jumping on the property ladder like they were 20 or 30 years ago, the private rental sector will take up the slack as more and more people will want a roof over their head, but won’t buy one but rent one. With Local Authorities and Housing Associations not building houses anywhere near like the number of houses they were building in the 1950’s, 60’ and 70’s, the private landlord appears to have good demand for their rental properties for many decades to come.

This will create a polarisation in the housing market between those, mostly older, households who own outright and those, mostly younger, households who rent. Our housing market is very much turning into the European model. However, all is not lost, the younger generation will inherit their parents properties, which in turn will enable them to buy, albeit later in life.

If you are a landlord or thinking of become a landlord, and would like to read more articles like this and other information on the Royal Tunbridge Wells Property Market, then please visit the Royal Tunbridge Wells Property Blog 

George Osborne – The Royal Tunbridge Wells landlord’s friend?

Well the last few weeks has been rather hectic as Royal Tunbridge Wells landlords, some who use us to manage their properties and other landlords who just read our Royal Tunbridge Wells Property Blog, have been sending me emails or picking the phone up to me about the new rules on buy to let taxation announced in the recent budget. George Osborne confirmed in the recent summer budget that the tax relief given to landlords on mortgage interest payments, on their buy to let (BTL) properties, would be reduced over the coming years for higher rate income tax payers. The Chancellor said the tax relief that private buy to let landlords (who pay the higher rate of income tax) would change in 2017 from the current 45%/40% and would steadily reduce over the following four years to the existing 20% by 2020.

With 21.4% of residential property in the Tunbridge Wells area being privately rented (as there are 5,353 privately rented properties in the Local Authority area), these changes are potentially something that will not only affect most Royal Tunbridge Wells landlords, but also the tenants and the wider property market as a whole. The choice of rental properties could drop, especially at the top end of the market which could push up rents.

However, Royal Tunbridge Wells landlords could protect themselves by reassigning one or more rental properties into a company structure (e.g., a Limited Company, Partnership or Sole Trader) and by doing so, the total tax paid is greatly reduced, because a company only pays tax on the profit. Nonetheless, before everyone goes off setting up companies for their BTL portfolios, it must also be noted, if a sole trader firm is started, stamp duty needs to be paid, yet if the owner is in business with a partner, they could enjoy some stamp duty relief.  The biggest tax variation is Capital Gains Tax (CGT) where the tax bill will be much higher when you come to sell your portfolio. 

In essence, by going into business with your BTL properties, you will potentially have a modest stamp duty to pay when you start, but you will have a lot less monthly tax to pay, irrespective of the interest rate, but the CGT bill will be much higher when you come to sell ... as you can see, it is not a ‘get out of jail card’. Now it must be remembered, I am not a tax advisor, so you must take advice from a qualified person.

Those planning to purchase a BTL property will have to factor these new rules into their calculations, and this could affect the offers they are willing to make. However, I am not that concerned, as the scaremonger reports fail to see the fact that two out of three BTL properties that have been bought since 2007 have been purchased without the support of BTL mortgage. With those two thirds of landlords paying cash for the purchase of their rental properties, that means two thirds of landlords will be totally unaffected by the changes.

So what of the future? The British love their Bricks and Mortar, it’s an asset that they can touch and feel and has a 70 year track record of capital growth that has out stripped inflation. Buy to let will still be attractive to Royal Tunbridge Wells investors and let me explain why. If you invested £80,000 in Royal Tunbridge Wells property in September 1987, today it would be worth £314,836. If you had invested the same £80,000 in to the London Stock Market (the FTSE 100 to be exact), it would be only be worth £229,012 today, whilst Inflation would have taken the original £80,000 and pushed it up to £166,254.

It’s true some central London landlords relying solely on the tax breaks rather than high yields may be forced out of the market, but even those landlords could seek to recoup any losses by increasing rents. However, those landlords may leave the market and this could constrict the availability of rented houses even more than it is already, increasing rents and thus pushing yields even higher for landlords and BTL investors still in the market... thus attracting new landlords into the market because of those higher yields.

The reality is, there is too much demand and not enough supply of homes for people to live in in the town. Official figures show the population in Tunbridge Wells is rising by 1,101 persons per year (i.e., demand rising), but only 447 properties are being built each year (i.e., supply is low). This sets up the Royal Tunbridge Wells (and UK) property market to continue to create strong and steady returns, irrespective of any tax loophole being there (or not as the case maybe).

Royal Tunbridge Wells Landlord’s mortgages top £300 million!

The Brits can’t stop talking about property. The hot topic of discussion at the posh dinner parties of Langton Green, Speldhurst and Neville Park’s movers and shakers is the subject of the Royal Tunbridge Wells Property market, but in particular, buy to let. These people are buying up buy to let properties quicker than an ace Monopoly player .. or so it would seem if you read the Sunday papers. So is the buy to let market a sure fire way to make money?  Is it something everyone should be jumping into? Is it a sure fire way to make money? 

The answer is Yes and No to all those questions!

Firstly, the government gives tax breaks to landlords, as it allows the mortgage interest payments on a buy to let property to be tax deductible. Also, a landlord only has to flick through Rightmove or Zoopla, pick any property at random and agree a price. Then, find a modest deposit of 25% (often by remortgaging their own home) which for an average Royal Tunbridge Wells terraced house, would mean finding £82,732 for the deposit (as the average Royal Tunbridge Wells terraced house is currently worth £330,928) and borrow the rest with a low interest rate buy to let mortgage.  Finally, the landlord would rent out the property in a matter of hours for top dollar and live happily ever after, with the rent then covering the mortgage payments, with loads of money to spare and come retirement have a portfolio of property that would have quadrupled in value in fifteen years. Sounds wonderful – doesn’t it? Or does it???

Let us not forgot that the half of one per cent Bank of England base rate is artificially low. The international money markets can be fickle and if interest rates do rise quicker and higher than expected because of some unforeseen global economic situation, that monthly profit will soon turn into a loss as the mortgage will be more than the rent. Even though tenants are staying longer in their rental property, tenants still come and go and my guidance to landlords is they should allow for void periods, plus the maintenance costs of a rental property and of course, agents fees. .. all things that eat into that profit.

Interestingly, by my calculations, there are approximately 1,603 Royal Tunbridge Wells landlords owing in excess of £300 million in mortgages on those Royal Tunbridge Wells buy to let properties.  An impressive amount when you consider Royal Tunbridge Wells only has 0.150% of all the rental properties in the Country. It really does come down to a number of important factors going forward to ensure you are water tight for the future. A lot of my existing landlords are fixing their mortgage rates. One told me that the Metro Bank are currently offering a 5 year fixed BTL remortgage rate at 3.79% for 5 years (based on a 75% loan). I don’t give financial advice, so you must speak with a qualified mortgage advisor.. but that sounds very fair!

However, one thing I do know is that buy to let is a long term investment, it’s a ten, fifteen, twenty year plan and property prices will go down as well as up. You wouldn’t dream of investing in the stock market without advice, so why invest in the Royal Tunbridge Wells Property Market without advice? We give bespoke detailed advice to our landlords to enable them to spot trends in the Royal Tunbridge Wells Property Market before others, enabling them to buy better properties at better prices. For example, did you know that semis are selling for around 14% lower than 12 months ago in Royal Tunbridge Wells yet flats are selling for 30% more (with every other type in between). This means we can advise on which properties will go up in value better (or lose less if property prices drop), we can also advise which have lower voids and which properties have higher maintenance issues.  

Information on the local property market and ability to process it is the strongest asset we can give you. As Lois Horowitz, the famous author says, ”Not having the information you need when you need it leaves you wanting. Not knowing where to look for that information leaves you powerless. In a society where information is king, none of us can afford that”. One place to find information on the Royal Tunbridge Wells Property Market is the Royal Tunbridge Wells Property Blog, where you will find many articles just like this. 

The ‘Liquorice Allsorts’ Royal Tunbridge Wells Property market

Despite the UK economy heading in the right direction with record low mortgage rates and unemployment  figures dropping,  the rate of property prices rising in Royal Tunbridge Wells have tempered since the start of the year. This slow but sure downward trend in the rate of growth has been in evidence since mid-2014.  Property value increases continue to outpace the growth in salaries, however the gap is closing, helped by a lift in salaries over the last 6 months.  Property values in the South East region as a whole are 9.1% higher than a year ago.  Compare this to the neighbouring regions of the East at 8.8% higher and South West at 3.6%, the majority of the country continue to see annual house price gains - the exception being Wales which recorded a slight  decline of -0.6%.

Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the second half of 2015 amid heightening activity in the Royal Tunbridge Wells property market.  As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Royal Tunbridge Wells property prices. Therefore, I my overall opinion is that Royal Tunbridge Wells property prices will rise by 6% over 2015 and roughly the same in 2016.

Property investment is a long term business.  Buying the right sort of property is vital. I have recently been speaking with a number of Royal Tunbridge Wells landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield.  So, what type of properties have performed best over the last few years in Royal Tunbridge Wells, especially in terms of their capital growth?

When comparing  what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present.  The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years:

• ·         Detached Houses in 2000 were selling on average for £307,777 and so far in 2015, they have been selling on average in Royal Tunbridge Wells for £809,383 a rise of 163%
• ·         Semi -Detached Houses in 2000 were selling on average for £141,962 and so far in 2015, they have been selling on average in Royal Tunbridge Wells for £386,900 a rise of 173%
• ·         Terraced Houses in 2000 were selling on average for £122,243 and so far in 2015, they have been selling on average in Royal Tunbridge Wells for £330,928 a rise of 171%
• ·         Flats and Apartments in 2000 were selling on average for £81,265 and so far in 2015, they have been selling on average in Royal Tunbridge Wells for £279,358 a rise of 244%

Moving forward, what should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

·         “Should I sell my property in Royal Tunbridge Wells?”

·         “Is the time right to buy another buy to let property in Royal Tunbridge Wells and if not Royal Tunbridge Wells, where?”

·         “Are there any property bargains out there in Royal Tunbridge Wells to be had?”

Many other Royal Tunbridge Wells landlords, who are with both us and other  Royal Tunbridge Wells letting agents, like to pop in for a coffee,  pick up the phone or email us to  discuss the Royal Tunbridge Wells property market, how Royal Tunbridge Wells compares with its closest rivals (Maidstone, Tonbridge and Rochester), and hopefully answer the three questions above.  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion and look forward to hearing from you.

Are ‘would be’ Royal Tunbridge Wells homeowners warming to the idea of renting?

I was reading a report the other day produced by the Halifax, about the UK property market and why more and more of the younger generation seem to be renting rather than buying. I find it fascinating that over the last ten years, the British obsession of buying a house almost as soon as you left school, and the fact that if you rented you were seen as a second class citizen, has turned on its head to a point where the hopes and dreams to own a nice home will be replaced by the ambition simply to live in one.

In the latter half of the 20th Century, you left school, got a job, bought a small house and kept buying and selling property, constantly upgrading until eventually they carried you out in a box. However, the perceived shame and stigma of renting is no longer the case, as it seems that the British are now beginning to accept a lifetime of renting. This is a very important consideration for both Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords as it will transform the way the Royal Tunbridge Wells property ladder looks in the future and I might ask whether or not it will exist at all for some people? The make up of households is one important factor, especially in the Royal Tunbridge Wells property market. The normal stereotypical married couple, two kids and dog of the 1970’s and 80’s has changed. More and more we have the need for larger houses where two families come together after divorces (+ kids) and need a property to house everyone through to an increase in the number of one person households.

Looking at the data for Royal Tunbridge Wells, of the 7,412 private rental properties in the Royal Tunbridge Wells District Council area, 36.23% of those rented properties are one person households (2,686 properties). However, when we compare the number of one person Royal Tunbridge Wells households who have bought their own property with a mortgage (ie therefore they are still in work), of the 30,999 owner occupied households in the area, only 2,416 of those properties are a one person household (ie 7.79%). 

Compared to a decade ago, this explosion in demand for decent high quality rental properties that one person households require has not been met with an increase in supply of such properties.  More and more I believe Royal Tunbridge Wells landlords need to consider this change in the make up of Royal Tunbridge Wells households, as I believe this could be an opportunity. As an aside, another interesting stat that raised an eyebrow was that 9.48% of those 7,412 rental properties (1,132 properties) are lone parents households as well. Again, another possible opportunity that Royal Tunbridge Wells landlords might want to consider in their future investment plans.

It is true that the Governments introduction in 2013 of the Help to Buy scheme, where first time buyers only needed a 5% deposit, changed the perception of peoples’ ability to buy without having to save ten’s of thousands of pounds for a deposit. However, it might surprise you, 95% mortgages were re-introduced within six months of the Credit Crunch in late 2009, so again it comes down to people’s own perception. Many youngsters think they won’t get a mortgage, so don’t even bother trying.

Coming back to the deposit, it’s still a fact that once you start renting it becomes that much harder to save for a deposit, regardless of the size. Interestingly, 7 out of 8 renters polled by the Halifax (86% to be exact) refuse to sacrifice the quality of accommodation they currently live in to reduce the amount of rent they pay in order to save for a deposit.  This is the crux and the real reason why people aren’t buying but renting... and why demand for renting will continue to grow in the future (ie good news for landlords). Royal Tunbridge Wells tenants can upgrade the quality and size of the property they live in for a minimal rent increase. 

The average rent of a two bed property in Royal Tunbridge Wells is £1,132pm, a three bed is £378pm more at £1,510pm, whilst the average four bed rent is £2,148pm. If you had to make that jump when buying, the monthly mortgage payments would be stratospherically more than that!  

Without any social pressure and better quality rental properties compared to a decade ago, we will become a nation of renters within the next generation, as the UK is becoming more like Europe, where renting is ‘the norm’. Who is going to supply all these properties to rent? Landlords! Whether you are an existing landlord looking to grow your portfolio or looking to become a ‘first time landlord’, my thoughts are take advice from as many people as possible. However, as the majority of landlords buy their buy to let properties in the same town they live, you will need specific advice about Royal Tunbridge Wells itself. One place for such advice and opinion is the Royal Tunbridge Wells Property Blog

Royal Tunbridge Wells Property Market – House prices up 8.3%

The Land Registry have just released their latest set of figures for the Royal Tunbridge Wells Property market. It makes interesting reading, as average property values in Royal Tunbridge Wells rose by 0.4% in May. This leaves average property values 8.3% higher than 12 months ago, meaning the annual rate of growth in the town fell to its lowest level since May 2014. When we compare Royal Tunbridge Wells against the regional picture, South East property values rose by 0.9%, leaving them 9.1% higher than a year ago.

Obviously this is a far cry from the price rises we were experiencing in Royal Tunbridge Wells throughout 2014. At one point (November 2014 to be exact) property values were rising by 11% a year. All the same, even with the tempering of the Royal Tunbridge Wells property values in 2015, property values are still higher. This is good news for local homeowners who had been affected by the downturn after 2007 and still find themselves in negative equity.

However, the thing that concerns me is that the average number of properties changing hands (ie selling) has dropped substantially over the last 12 months in the town. In Mar 2014, 118 properties sold in Royal Tunbridge Wells but in March 2015, that figure dropped to 87.  I have been in the Royal Tunbridge Wells property market for quite a while now and the one thing I have noticed over the last few years has been the subtle change in the traditional seasonality of the Royal Tunbridge Wells property market. It has been particularly noticeable this year in that the normal post Easter flood of properties coming onto the market was not seen. This has made an imbalance between supply and demand, with less houses coming onto the market there is simply not as much choice of properties to buy in Royal Tunbridge Wells and with the population of Royal Tunbridge Wells ever increasing, this will generally strengthen house price growth for the foreseeable future.

So what does all this mean for Royal Tunbridge Wells landlords or those considering dipping their toe into the buy to let market for the first time? For many people, buy to let looks a good investment, providing landlords with a decent income at a time of low interest rates and stock market unpredictability.

However, if you are thinking of investing in bricks and mortar in Royal Tunbridge Wells, it is important to do things correctly. As an investment to provide you with income, for those with enough savings to raise a big deposit, buy to let looks particularly good, especially compared to low savings rates and stock market yo-yo’s. I must also remind readers, landlords have two opportunities to make money from property, not only is there the rent (income), but with the property market bouncing back over the last few years, property value increases has spurred on more investors to buy property in the hope of its value continuing to rise.

Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must rise and you need to know your property can stand that test. I saw some Royal Tunbridge Wells landlords struggling in the mid noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having to make up a shortfall in the mortgage payments of £100 per month in 2007.

Its true many landlords were thrown a life raft when the base rate dropped to 0.5% in March 2009. Whilst interest rates have remained there since, mark my words, they will rise again in the future. However, even with the potential for costs to rise, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and thus rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Royal Tunbridge Wells property market.

If you are planning on investing in the Royal Tunbridge Wells property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Royal Tunbridge Wells Property Blog 

Why are less Royal Tunbridge Wells people moving house?

During my school years, my parents seemed to move every other year (or it seemed that way). In reality, looking back at the house moves, we actually moved three times before I left home. However, whilst my parents kept the removal van people in business whilst I was at school, from research I have carried out it shows things have changed considerably in Royal Tunbridge Wells over the last few decades, and interestingly, the trend is getting worse ... for the removal van people at any rate!

In Royal Tunbridge Wells, there are 24,962 properties. However, after we remove the 3,725 council houses, 5,353 privately rented houses and 239 houses where the occupants live rent free, that leaves us with 15,645 owned properties (be that 100% outright, with a mortgage or shared ownership). This means 62.7% of the properties in Royal Tunbridge Wells are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Royal Tunbridge Wells, over the last 12 months, has only been 1,453. This means on these figures, the homeowners of Royal Tunbridge Wells are only moving on average every 10.76 years.

These are the reasons. Firstly, the cost of moving house has risen over the last twenty years. Secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2002 to be exact) for property values to double to today’s levels.

This change to a relatively low inflation Royal Tunbridge Wells property market (i.e. Royal Tunbridge Wells property values not rising quickly) is significant because the long term consequences of sustained low house price growth is that it eats into mortgage debt more slowly than when property price inflation is higher. Royal Tunbridge Wells homeowners cannot rely on inflation to shrink their debt in real terms as much as they did in say the 1970’s and 1980’s

.

So what does this all mean for Royal Tunbridge Wells buy to let landlords? Well for the same reasons existing Royal Tunbridge Wells homeowners aren’t moving, less ‘twenty something’s’ are buying their first home as well. Royal Tunbridge Wells youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. As a society, we expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit? Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit if there is no longer a social stigma in renting or pressure to buy as there was... say... a generation ago?

Even though, in real terms, property prices are 5% cheaper than they were ten years ago (when adjusted by inflation), 21.4% of Royal Tunbridge Wells properties are privately rented (nearly double it was twenty years ago). As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing? For advice and opinion on the Royal Tunbridge Wells Buy To let property market, one source of information is The Royal Tunbridge Wells Property Blog

Affordability of housing in Royal Tunbridge Wells

Talking to an elderly relative recently, he reminded me that in his day, you could have bought a property for the same price of what a decent second hand car would sell for today and that his father was buying property for the same price as a decent 50 inch LCD TV!  Now of course, these are only headline prices and we have had wage growth and inflation.  Interestingly, since the Second World War, property values in Royal Tunbridge Wells doubled in 1961, 1971, 1975, 1980, 1988, 2000 and 2006.

Looking at more recent times, since the start of the Millennium, these increases in property values have generated large increases in equity for many homeowners but on the other side of the coin also making housing unaffordable for other people.  It might interest readers to note that most of Europe experienced sharp increases in property values in the early years of 2000’s, with only Spain beating  us (although we know what has happened to the Spanish property market over the last few years!).  In the 2000’s, the British situation was different in two regards.  First the property value boom started earlier and saw more sustained increases, second, the regional pattern was fairly uniform.

However, since 2010, the regional pattern has been completely different in the UK.  Compared with  2007 (the last property boom), average property values today in England and Wales are 1.2% higher, whilst in Greater London, they are 35.7% higher, whereas in Royal Tunbridge Wells they are 7.07% higher. The London property market has been like a different country.  Looking specifically at Royal Tunbridge Wells though, it has continued for first time buyers to get on the housing ladder.  The best measure of the affordability of housing is the ratio of Royal Tunbridge Wells Property Prices to Royal Tunbridge Wells Average Wages, (the higher the ratio, the less affordable properties are).  In 1997  the average value of a Royal Tunbridge Wells property was 4.62 times higher than the average annual wage in Royal Tunbridge Wells) ie 4.62 to 1, then in subsequent years

· 2000 6.48 to 1
· 2002 7.95 to 1
· 2003 8.75 to 1
· 2007 9.31 to 1
· 2009 8.60 to 1
· 2012 8.46 to 1
· Today 9.44 to 1

You  can see quite clearly, even though we had an improvement just after the 2007 property crash (i.e. the ratio dropped), in following subsequent years with Royal Tunbridge Wells house price’s rising but wages not keeping up with them,  the ratio started rise.  This has meant there has been a deterioration in affordability of property in Royal Tunbridge Wells over the last couple of years.  This is one of the (many) reasons why the younger generation is deciding more and more to rent instead of buy their own house.  The local Council sold off council houses in the Thatcher years and for many on low incomes or with little capital, owning a home has simply never been an option.

With fewer people able to save up the deposit required by mortgage lenders, more and more people are looking to rent, this has also resulted in a change in attitudes towards renting over the last decade.  This delay in moving up the property ladder has driven rents up in Royal Tunbridge Wells over the last few years, as more people are seeking properties to rent.  All these things have combined to make the demand for rental property in Royal Tunbridge Wells rise.  If you are an existing landlord or someone thinking of become a first time landlord looking for advice and opinion and what (or not to buy in Royal Tunbridge Wells), one source of information is the Royal Tunbridge Wells Property Blog 

Fewer people are moving house in Royal Tunbridge Wells

Well the dust has settled and the General Election seems a distant memory, we can get back to a more normal property market, or that is what the London based ‘Fleet Street’ journalists would lead  you to believe.  You see I have been talking to many fellow property professionals in Royal Tunbridge Wells (solicitors, conveyancers and one the best sources of info – the chap who puts all the estate agent and letting boards up in Royal Tunbridge Wells, and all of them, every last one of them told me they didn’t see any change over April in business, compared to any other month on the lead up to the Election itself.

 I am now of the opinion that maybe in the upmarket areas of Mayfair and Chelsea, the market went into spasm with the prospect of a Labour/SNP pact with their Mansion Tax for properties over £2,000,000, but in little old Royal Tunbridge Wells, there has only been nine properties sold above £2,000,000 mark in the last 5 years.   

In a nutshell, the General Election in Royal Tunbridge Wells didn’t really have any impact on people’s confidence to buy property.  As I write this article, of  582 properties that have come on to the market in Royal Tunbridge Wells  since the 2^nd of April, 233 of them have a buyer and are sold subject to contract, that’s over two in five (40.03% to be precise).

I think that things are starting to change in the way people in Royal Tunbridge Wells (in fact the whole of the country as I talk to other agents around the UK) buy and sell property.  Back in the 1970’s, 80’s and 90’s, the norm was to buy a terraced house as soon as you left home and do it up.  Meanwhile, property prices had gone up, so you traded up to a 2 bed semi, then a 3 bed semi and repeated the process, until you found yourself in a large 4 bed detached house with a large mortgage. 

Looking into this a little deeper like I have said in previous articles Royal Tunbridge Wells people’s attitude to homeownership itself has changed over the last ten years.  The pressure for youngsters to buy when young has gone as renting, not buying, is considered the norm for 20 something’s. This isn’t just a Royal Tunbridge Wells thing, but, a national thing, as I have noticed that people buy property by trading up (or down) because they need to, not because ‘it’s what people do’.  This does means there are a lot less properties on the market compared to the last decade.

A by-product of less people moving is less people selling their property. My research shows there are a lot fewer properties each month selling in Royal Tunbridge Wells compared to the last decade.  For example, in February 2015, only 105 properties were sold in Royal Tunbridge Wells. Compare this to February 2002, and 120 properties sold and the same month in 2003, 111 properties.  I repeated the exercise on different sets of years, (comparing the same month to allow for seasonal variations) and the results were identical if not greater.  

So what does this all mean?  Demand for Royal Tunbridge Wells property isn’t flying away, but with fewer properties for sale, it means property prices are proving reasonably stable too. Stable, consistent and steady growth of property values in Royal Tunbridge Wells, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late2000’s might just be the thing that the Royal Tunbridge Wells property market needs in the long term.