Average Rent Paid by Tenants in Royal Tunbridge Wells rise to £1,088 per month

Back in the Spring, there was a surge in Royal Tunbridge Wells landlords buying buy to let property in Royal Tunbridge Wells as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1^st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in TN1.

Jan 2016 – 26 properties sold

Feb 2016 – 27 properties sold

March 2016 – 55 properties sold

April 2016 – 15 properties sold

May 2016 – 17 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Royal Tunbridge Wells - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

.. but it’s not all bad news for tenants. Whilst average rents in Royal Tunbridge Wells since 2005 have increased by 22.6%, inflation has been 38.5% over the same time frame, meaning Royal Tunbridge Wells tenants are 15.9% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

Year	Average Rent in Royal Tunbridge Wells per month
2005	887
2006	908
2007	928
2008	958
2009	973
2010	960
2011	983
2012	1005
2013	1020
2014	1035
2015	1058
2016	1088

I found it particularly interesting looking at the rent rises over the last five years in Royal Tunbridge Wells, as it was five years ago we started to see the very early green shoots of growth of the Royal Tunbridge Wells economy.  As a whole, following the Credit crunch (2011), rents in Royal Tunbridge Wells have risen by an average of 2.4% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Royal Tunbridge Wells professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

Royal Tunbridge Wells Property Values increase by 0.63% ... good or bad news?

“How's the Royal Tunbridge Wells housing market doing?” asked an upbeat Royal Tunbridge Wells landlord last week.  “Quite strange”, I replied. Our landlord was perplexed! Let me explain...

Even the Brexit vote has not hindered Royal Tunbridge Wells’s steady rise in property value, as Royal Tunbridge Wells property values went up 0.63% last month alone, leaving Royal Tunbridge Wells values 11.56% higher than a year ago. An increase in demand from buyers and an uninspiring level of supply (i.e. the number of properties on the market) has driven up the value of the Royal Tunbridge Wells’s housing.

...And that is where the issue is. With Brexit, the coalition of the 2010-15, a double-dip recession and post credit crunch fallout – I was perplexed that the Royal Tunbridge Wells property market (and values) has remained so strong, still 21.2% higher than 20 months ago. That is until you start to look into the real reasons why we find ourselves in such a great place.

The Royal Tunbridge Wells (and the UK) housing market is built on the foundations of basic economic rules that any GCSE Economics student should understand. However, at a time when, as a country, we seem eager to uncouple ourselves from all manner of proven facts, anything is up for grabs.

Even the wary RICS said throughout the UK, most of its Chartered Surveyors anticipated house prices to increase in the next six months, which seems contradictory given economic cautions from Mr Hammond and HM Treasury. Even though inflation will rise to around 2% to 3% in 2017 and perhaps a little more in 2018 because of Sterling’s devaluation, together with a high probability of a decelerating GDP and a slight rise in unemployment, how can the RICS and most of my landlords be so confident about the value of our homes?

Well, look at from where we are starting. Nationally, a base of low unemployment, low inflation and preposterously low interest rates, while in Royal Tunbridge Wells, the local economy is doing quite well for itself. Confidence also plays a part. Confidence can supersede basic economic facts for a short time at least, which is why actual property market changes tend to be more exaggerated, as confidence can turn both positive and negative very quickly. The fact is, there is a long-term relationship between property values, wages and unemployment. For example, looking at the graph below, you can quite clearly see the ratio of property values to earnings is nowhere near as high as it reached in 2008 and currently is in the middle of the range for the last 30 years. As a country, we are in a good place.

By April 2017, Article 50 will be invoked. This will bring additional political tomfooleries and economic ups and downs. With both purchasers and vendors predisposed by the 24-hour news cycle, which let’s face it, gets more haphazard by the day, it is likely to prove a challenging couple of years … and yes, Royal Tunbridge Wells property values might drop slightly in 2017, but based on what we know of the UK plc now, the UK and Royal Tunbridge Wells property values are not projected to move that much over 2017 or 2018.  Going into the next two years, we are in much better financial shape as a country compared to the last two crashes of 1987 and 2008.

But, on the other side of the coin, what we also know is that we don't know much about the form of our economic future or indeed many other facets of our lives. Confidence will continue to be the key player in the Royal Tunbridge Wells housing market for a while longer - yet this may spur some much needed second-hand market activity? Now, where is my crystal ball?

Royal Tunbridge Wells Housing Crisis? Only 2.4% of Royal Tunbridge Wells Homes Are For Sale

The Royal Tunbridge Wells Property Market continues to disregard the end of the world prophecies of a post-Brexit fallout with a return to business as usual after the summer break.

The challenge every Royal Tunbridge Wells property buyer has faced over the last few years is a lack of choice – there simply hasn't been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Royal Tunbridge Wells, the market is likely to see upward pressure on property values continue.

However, there may be hope for first time buyers, with homeowners looking to move upmarket and buy to let landlords looking for their next investment, the Royal Tunbridge Wells property supply crisis just might be starting to ease, as the number of new properties coming onto the market in Royal Tunbridge Wells has increased.

For example, last month TN4 saw 117 new properties coming on to the market, not bad when you consider for the last year the average has been predominantly in the 70 to 90 range. With the average Royal Tunbridge Wells property value hitting a record high, reaching almost £475,000 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller' average property figure, but there is a glimmer of hope that the Royal Tunbridge Wells supply crisis may be starting to ease.

As I write this article, 2.41% of Royal Tunbridge Wells’ properties are up for sale. In terms of actual chimney pots, that equates to 502 properties on the market in Royal Tunbridge Wells (within 3 miles of the centre of Royal Tunbridge Wells) – which, when compared to only a year ago when that figure stood at 471, is a steady increase in the number of properties available to buy. Split down into the type of property, it makes even more fascinating reading...

 

·      Detached Properties in Royal Tunbridge Wells  - 139 on the market a year ago compared to 168 on the market now – an increase of 21%

·      Semi Detached Properties in Royal Tunbridge Wells - 87 on the market a year ago compared to 101 on the market now - an increase of 16%

·      Terraced Properties in Royal Tunbridge Wells - 42 on the market a year ago compared to 40 on the market now – a decrease of 5%

·      Flats / Apartments Properties in Royal Tunbridge Wells  - 165 on the market a year ago compared to 169 on the market now - an increase of 2%

 This is evidence of strength in the Royal Tunbridge Wells housing market that many didn't expect. Many believed that the Royal Tunbridge Wells property market wasn't going to be strong enough post Brexit - as what was a sellers' market before the Brexit vote and Buyers' market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

However, all this will mean property values won't continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This won't be down to Brexit but a re-balancing of the Royal Tunbridge Wells Property Market – which is good news for everyone.

Private Renting set to grow by 2,300 Royal Tunbridge Wells households by 2025

I was having a most interesting chat the other day with a Royal Tunbridge Wells landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Royal Tunbridge Wells, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the Royal Tunbridge Wells Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Royal Tunbridge Wells.

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Royal Tunbridge Wells? The fact is, as a country, we are facing a precarious rental shortage and need to get Royal Tunbridge Wells building in a way that benefits a cross-section of Royal Tunbridge Wells society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 25,000 households in Royal Tunbridge Wells, currently 10,900 tenants live in 5,300 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Royal Tunbridge Wells needs to rise by 2,300 (i.e. 42.8%) .. taking the total number of rented properties in the city to 7,600.

That means Royal Tunbridge Wells landlords need to buy around 200 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 4,700 people will want to live in all those 'additional' Royal Tunbridge Wells rental properties – so why is the government penalising landlords?

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Royal Tunbridge Wells house prices, the majority of new Royal Tunbridge Wells households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Royal Tunbridge Wells society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.