£10.26bn – The total value of all Royal Tunbridge Wells Property Market

“How much would it cost to buy all the properties in Royal Tunbridge Wells?”

This fascinating question was posed by the 11-year-old son of one of my Royal Tunbridge Wells landlords when they both popped into my offices before the Christmas break (doesn’t that seem an age away now!). I thought to myself, that over the Christmas break, I would sit down and calculate what the total value of all the properties in Royal Tunbridge Wells are worth … and just for fun, work out how much they have gone up in value since his son was born back in the autumn of 2005.

In the last 11 years, since the autumn of 2005, the total value of Royal Tunbridge Wells’ property has increased by 55% or £3.64 billion to a total of £10.26 billion. Interesting, when you consider the FTSE100 has only risen by 30.78% and inflation (i.e. the UK Retail Price Index) rose by 37% during the same 11 years.

When I delved deeper into the numbers, the average price currently being paid by Royal Tunbridge Wells households stands at £446,688.… but you know me, I wasn’t going to stop there, so I split the property market down into individual property types in Royal Tunbridge Wells; the average numbers come out like this ..

Royal Tunbridge Wells Property Market
Average Value of a Detached Property	Average Value of a Semi-Detached Property	Average Value of a Terraced/Town House Property	Average Value of an Apartment
£683,378	£445,952	£310,231	£293,582

... yet it got even more fascinating when I multiplied the total number of each type of property by the average value. As detached houses are so expensive, when you compare them with the much cheaper terraced/town houses and apartments, you can quite clearly see how valuable detached properties are in terms of total pound note value, when compared to the value of the terraced/town houses and apartments.

Total Value of all the Royal Tunbridge Wells Detached Properties	Total Value of all the Royal Tunbridge Wells Semi-Detached Properties	Total Value of all the Royal Tunbridge Wells Terraced/Town House Properties	Total Value of all the Royal Tunbridge Wells Apartments
£3,402,539,062	£2,841,606,144	£1,422,719,366	£2,597,613,536

So, what does this all mean for Royal Tunbridge Wells?  Well as we enter the unchartered waters of 2017 and beyond, even though property values are already declining in certain parts of the previously over cooked Central London property market, the outlook in Royal Tunbridge Wells remains relatively good as over the last five years, the local property market was a lot more sensible than central London’s.

Royal Tunbridge Wells house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with continued immigration and population growth.  Secondly, with 0.25 per cent interest rates, borrowing has never been so cheap and finally the simple lack of new house building in Royal Tunbridge Wells not keeping up with current demand, let alone eating into years and years of under investment – means only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Royal Tunbridge Wells has always, and will always, ride out the storm.

In the coming weeks, I will look in greater detail at my thoughts for the 2017 Royal Tunbridge Wells Property Market. As always, all my articles can be found at the Royal Tunbridge Wells Property Market Blog 

£44m a year black hole in the Royal Tunbridge Wells Property Market - Is Buy to Let Immoral? (Part 2)

An Englishman’s Home is His Castle as Maggie Thatcher lauded - everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Royal Tunbridge Wells buy to let properties as an investment. Royal Tunbridge Wells first time buyers were in competition with Royal Tunbridge Wells landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Royal Tunbridge Wells landlords fanning the flames of the Royal Tunbridge Wells housing crisis bonfire?

Photo Credit - ThinkGlink

I believe that the landlords of the 5,353 Royal Tunbridge Wells rental properties are not exploitive and are in fact, making many positive contributions to Royal Tunbridge Wells and the people of Royal Tunbridge Wells. Like I have said before, Royal Tunbridge Wells (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Royal Tunbridge Wells …

For Royal Tunbridge Wells to meet its obligation on the building of new homes, Royal Tunbridge Wells would need to build 217 households each year. Yet, we are missing that figure by around 91 households a year.

For the Government to buy the land and build those additional 91 households, it would need to spend £44,565,458 a year in Royal Tunbridge Wells alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Royal Tunbridge Wells families or Royal Tunbridge Wells people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.

 So only you, the reader, can decide if buy to let is immoral, but first let me ask this question - if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

Royal Tunbridge Wells’s private renting set to hit 7,548 households by 2021 - Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Royal Tunbridge Wells citizens for the current housing crisis in the town?

Also known as the ‘Baby Boomer Generation’, these Royal Tunbridge Wells people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Photo Credit Networking Times

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

...Yet some have suggested these Royal Tunbridge Wells baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,

but average Royal Tunbridge Wells house prices rose by 136.04%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents ... it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Royal Tunbridge Wells (and UK) property market in the later half of the 20^th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Royal Tunbridge Wells.

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays ... no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you ... I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!

So, in Part Two on Monday, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).