Royal Tunbridge Wells Homeowners 227% More Likely To Live in a Home with 3+ Bedrooms than those that Privately Rent

The conventional way of categorising property in Britain is to look at the number of bedrooms rather than its size in square metres (square feet for those of you over 50!). My intuition tells me that homeowners and tenants are happy to pay for more space. It’s quite obvious, the more bedrooms a house or apartment has, the bigger the property is likely to be. And it’s not only the tangible additional bedrooms, but those properties with those additional bedrooms tend to have larger (and more) reception (living) rooms. However, if you think about it, this isn’t so surprising given that properties with more bedrooms would typically accommodate more people and therefore require larger reception rooms.

In todays Royal Tunbridge Wells property market, the Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords I talk to are always asking me which attributes and features are likely to make their property comparatively more attractive and which ones may detract from the price. Over time buyers’ and tenants’ wants and needs have changed. 

In Royal Tunbridge Wells, location is still the No. 1 factor affecting the value of property, and a property in the best neighbourhoods can achieve a price almost 50% higher than a similar house in an ‘average’ area. Nevertheless, after location, the next characteristic that has a significant influence on the desirability, and thus price, of property is the number of bedrooms and the type (i.e. Detached/Semi/Terraced/Flat).

The number of bedrooms for owner-occupiers very much depends on the size of the family and the budget, whilst Royal Tunbridge Wells landlords have to consider the investment opportunity. In this article, I have analysed Royal Tunbridge Wells’ housing stock into bedrooms and tenure. Initially looking at Royal Tunbridge Wells homeowners..

And now the Private rented sector … 

It can quite clearly be seen that Royal Tunbridge Wells owner-occupiers tend to occupy the larger properties with more bedrooms. This would be expected due to the demographic of homeowners and people that privately rent.

However, this shows there could be opportunities for Royal Tunbridge Wells buy to let landlords to purchase larger properties with more bedrooms to attract tenants requiring properties with more bedrooms. However, before you all go buying larger 4 bed and 5 bed mansions to rent them out, a lot of bigger properties in Royal Tunbridge Wells don’t make financial sense when it comes to buy to let.

For numerous years Royal Tunbridge Wells buy to let landlords have been the lone buyers at the smaller one and two bed starter homes of the market, as they have been lured by elevated tenant demand and eye-catching returns. Some Royal Tunbridge Wells landlords believe their window of opportunity has started to close with the new tax regime for landlords, whilst it already appears to be opening wider for first time buyers. This is great news for first time buyers .. but one final note for Royal Tunbridge Wells landlords .. all is not lost .. you can still pick up bargains, you just need to be a lot more savvy and do your homework ..one source of such information with articles like this is the Royal Tunbridge Wells Property Market Blog 

As OAP’s set to rise to 1 in 4 of Royal Tunbridge Wells’ population by 2037 – Where are they all going to live

With constant advances in technology, medicine and lifestyles, people in the Royal Tunbridge Wells area are, on average, living longer than they might have a few decades ago. As Royal Tunbridge Wells' population ages, the problem of how the older generation are accommodated is starting to emerge. We, as a town, have to consider how we supply decent and appropriate accommodation for Royal Tunbridge Wells’ growing older generation’s accommodation needs while still offering a lifestyle that is both modern and desirable. 

In 1997 in Royal Tunbridge Wells, around one in every six people (17%) were aged 65 years and over (and the local authority area as a whole), increasing to nearly one in every five people (19%) in 2017 and it is projected to reach around one in every four people (26%) by 2037, meaning..

Over the next 19 years, the growth of the over 65 population in Royal Tunbridge Wells will grow by 36.8% - a lot more than the overall growth population of Royal Tunbridge Wells of 6.1% over the same time frame.

In fact, the number of those over 90 is expected to more than double in our local authority from 1,371 (1.2%) in 2017 to 3,100 (2.5%) by 2037.

And looking at the proportional percentage changes over those years..

Looking at Royal Tunbridge Wells and the local authority as a whole, there is a distinct under supply of bungalows and retirement living (i.e. sheltered) accommodation. The majority of sheltered accommodation fit for retirement is in the ex-local authority sector whilst the majority of private sector bungalows were built in the 1960s/70s/80s and are beginning to show their age (although that means there is often an opportunity for Royal Tunbridge Wells investors and Royal Tunbridge Wells buy to let landlords to buy a tired bungalow, do it up and flip it/rent it out).

In the medium to longer term, we need to build more bungalows and sheltered accommodation and, if we do that, that won’t only be of benefit to the elderly population of Royal Tunbridge Wells – it will have a direct knock-on effect to the younger and middle-aged population by unlocking those family homes the older generation homeowners live in.  

There have been 17 Housing Ministers since 1997. No one ever seems to stay in the job long enough to create a consensus and direction in Government Policy on the vital issue of the country’s housing shortage, yet the sound bites and White Papers seem only to focus exclusively on first-time buyers when there is an even more severe and disregarded shortage in suitable housing for the older generation.

This scantiness affects both mature homeowners trapped in unsuitably big family properties, unable to find smaller bungalows or suitable retirement apartments, whilst the waiting list for Council sheltered accommodation is putting a strain on other aspects of social care. In both circumstances, policy coming (or not coming) out of Government is repressing the supply and type of accommodation mature people desire, need and want, whilst at the same time, increasing the cost (and taxes) for social and NHS care.

Maybe we need tax breaks for people to downsize or planning permissions that stipulate bungalows only. Whichever way you look .. there are challenging times ahead for us all.

The ‘Home Owning’ Movers and Shakers in Royal Tunbridge Wells in 2018

It’s now commonly agreed amongst economists and the general public that the dramatic rise in Royal Tunbridge Wells’ property prices of the last six years has come to an end. 

Read the National newspapers, and they talk of doom and gloom in the British housing market with such things as strained buyer affordability (as property prices have increased over the past six years at a far faster pace than average salaries), a lack of new properties being built and the Brexit uncertainties over the last two and half years being blamed for the slow down - yet in the last 12 months, people have still been moving, buying and selling in Royal Tunbridge Wells at levels similar to the last six years - something tells me we have a case of ‘bad news selling newspapers’. \

So instead, let me share with you what, exactly, is happening in the Royal Tunbridge Wells property market, and more specifically, who is moving and why. Most of the sales in Royal Tunbridge Wells over the past twelve months were flats, which on average sold for £285,800. Terraced properties had an average sold price of £391,550 and semi-detached properties averaged at £465,250.

In Royal Tunbridge Wells, in the homeowner sector in 2018 (i.e. owner occupation), 447 households moved within the tenure (i.e. sold the home they owned and bought another one) and 87 new households were created (i.e. they moved from living with family/friends and bought their first home without privately renting).

What does this mean for Royal Tunbridge Wells buy to let landlords? Well looking at the graph, it appears bad news for landlords. There were 208 households that moved into the home owning (owner occupation) tenure from the private rented sector, whilst on the other side of the coin, 164 Royal Tunbridge Wells households moved to the private rented sector from owner occupation … which appears on the face of it, a reduction in the private sector.

My research has calculated that in 2018, an additional 217 new households in the Royal Tunbridge Wells private rental sector were created

...and it will continue to grow at those levels for the foreseeable future.

I have one final thought and opportunity for you property investors in Royal Tunbridge Wells. 108 owner occupied households in Royal Tunbridge Wells sold in last year where the homeowners had passed away. These properties can be a potential goldmine and offer great returns. The reason being is some members of the older generation who have owned these homes for decades have spent money on high capital items (double glazing / central heating etc.) but not spent money on more superficial low-ticket items such as up to date carpets, kitchen, bathroom and decorating (vital if you want to sell your property for top dollar). These properties can often be bought cheaply because most buyers can’t see past the avocado or brown bathroom suite from the 1970’s and the dated decor, so if you were to buy wisely and do the works, you could sell it on for a healthy profit.

So, whatever is happening in the world with Brexit, Trump, China, and the Stock Market … the Royal Tunbridge Wells housing market is in decent shape for the medium to long term. If we do have small corrections in values in the next 12 to 18 months, in the long term, house prices have always returned ... and returned with vengeance. Like I say to anyone buying a property, be they a first time buyer, landlord or homeowner ... property is a long game ... and if you play the long game, you will always win (although isn’t that true in most aspects of life?).

1 bed, 2 bed or 3 bed homes – Which Sell the Best in Royal Tunbridge Wells?

A few months ago, I wrote an article on the Royal Tunbridge Wells Property Blog about the length of time it took to sell a property in Royal Tunbridge Wells and the saleability of the different price bands (i.e. whether the lower/middle or upper local property markets were moving slower or quicker than the others). For reference, a few months ago it was taking on average 55 days from the property coming on the market for it to be sold subject to contract (and that was based on every Estate Agent in Royal Tunbridge Wells) … and today … 115 days  .. does that surprise you with what is happening in the UK economy?

Well, a number of Royal Tunbridge Wells landlords and homeowners, who are looking to sell in the coming months, contacted me following that article to enquire what difference the type of property (i.e. Detached/Semi/Terraced/Apartment) made to saleability and also the saleability of property by the number of bedrooms) As I have said before, whether you are a Royal Tunbridge Wells landlord looking to liquidate your buy to let investment or a homeowner looking to sell your home; finding a buyer and selling your property can take an annoyingly long time… but anything you can do to mitigate that is helpful to everyone.

So, I did some research on the whole of the Royal Tunbridge Wells property market .. and these were my findings …  to start with by type (i.e. Detached/Semi/Terraced/Apartment)
….

As you can see, the star players are the semi-detached variants of Royal Tunbridge Wells’ property, whilst detached seem to be sticking in Royal Tunbridge Wells.

Next I looked at what the number of bedrooms does to the saleability of Royal Tunbridge Wells property.. 

… and as you can see the five bed properties seem to be taking the longest time to sell ..and to answer the question in the title .. it’s two bed properties!

So, what does this mean for Royal Tunbridge Wells’ buy-to-let landlords and homeowners?  

There is no doubt that there is a profusion of properties on the market in Royal Tunbridge Wells compared to 18 months ago … it’s not because more houses are coming on to the market, it’s because they are also taking a little longer to sell. This makes it slightly more a buyer’s market than the seller’s market we had back in 2014/5/6. Therefore, in some sectors of the Royal Tunbridge Wells property market, it is much tougher to sell, especially if you want to sell your Royal Tunbridge Wells home fast.

Therefore, to conclude, on the run up to the New Year, if you are looking to buy and plan to stay in the buy to let market a long time, perhaps take a look at the Royal Tunbridge Wells properties that are sticking as there could be some bargains to be had there? Want to know where they are .. drop me a line and I will tell you a nifty little trick to find all the properties that are sticking.

Live in Royal Tunbridge Wells? About to Retire and Privately Rent? You Could be £6,000 a Year Worse Off!

You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis ... where people aren’t saving enough for their retirement. But it’s not the lack of future pension incomes of the Royal Tunbridge Wells people that are my immediate concern. The fact is that so many of the future retirees in Royal Tunbridge Wells over the coming decade, who never bought their home in the Millennial years of the 1990’s and 2000’s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.

In Royal Tunbridge Wells, there are 709 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

A Royal Tunbridge Wells retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Royal Tunbridge Wells is £1,080 a month - a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet...

The maximumhousing benefit for a couple in Royal Tunbridge Wells is currently £586.56 per month … leaving a significant gap when you consider the average rent in Royal Tunbridge Wells is £1,080 per month

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more Royal Tunbridge Wells people retire and continue to rent from a private landlord. Numerous Royal Tunbridge Wells private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse. 

The average Royal Tunbridge Wells retiree will need to find £5,921 pa to stay in their privately rented home after retirement

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Royal Tunbridge Wells homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow ... yet lets be frank - they aren’t building bungalows in large numbers in Royal Tunbridge Wells anymore.

And for the Royal Tunbridge Wells landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Royal Tunbridge Wells’ tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings. 

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer. 

The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built ... but back to reality ... that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Royal Tunbridge Wells buy to let landlords!

Top 25 Most Saleable Streets in Royal Tunbridge Wells

Following on from my last article, if you recall I said that Queens Road had the most properties sold in the TN4 Royal Tunbridge Wells postcode, yet I felt that this information wasn’t telling the whole story, as some roads in Royal Tunbridge Wells have more properties on them than others. Therefore, I promised that I would compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold) more often than the rest of the locality. 

To give some foundation to the article, in 2017 Royal Tunbridge Wells’ homeowners had, on average, lived at their existing address for 17 years and 6 months. However, when I looked at the difference between homeowners with and without a mortgage; Royal Tunbridge Wells homeowners without a mortgage had lived in their Royal Tunbridge Wells home for an average of 23 years and 9 months compared with 10 years and 1 month for homeowners with a mortgage. Interestingly, Royal Tunbridge Wells’ Council house tenants have on average resided at their present home for 11 years and 4 months, whilst finally for those who rent from a private landlord, tenants generally have lived in their property for an average of 3 years and 11 months (up from 3 years 5 months only five years ago).

The TN4 street in the top 25 saleable streets with the highest number of households on it is Culverden Park Road, which has 348 residential addresses. Yet since 1995, only 206 properties have changed hands (some multiple times!)  .. which means the street’s saleability or churn rate is 59.2%.

However, the street or road that has the highest saleability or churn rate is St Pauls Street … which has 49 households on it, yet since 1995 there have been 130 house sales … a saleability rate of 265.3%. Here is the full breakdown of the top 25 streets … 

So, as you can see, some interesting statistics and a lot more correlation between saleability rate and property values (unlike the article last time where we compared value to ‘out and out’ raw sales figures).

Therefore, what does this all mean to Royal Tunbridge Wells homeowners and Royal Tunbridge Wells landlords? Well these 25 streets are the best performing streets out of the 315 streets in the Royal Tunbridge Wells (TN4) area so if you live/own a property on those 25 streets … you are sitting on a very saleable street. If you want to find out how saleable your street is .. please drop me a line and we can discuss this further.

Queens Road, Royal Tunbridge Wells …the road where people move the most

Many folks say moving home is the most stressful thing. Moving home is like someone (and that someone is usually you and you are the cause of this devastation) has collected all your worldly goods, put them into brown boxes and into a lorry making your whole life look like a Amazon delivery van, only to spend the next six months unpacking it all, whilst unable to find important things like your bank cards, ‘those’ shoes or special jewellery!

We wish we could be instantly transported like in Star Trek “Beam me up Scotty to a blissful moved in state”. Yet the week you move, it’s like an episode from the original 1960’s series Star Trek, when the crew had a transporter accident with an ion-storm sends Kirk and Spock into an alternate reality, where the caring Federation is the merciless Terran Empire, and the USS Enterprise is a warship and chaos eschews!!!

Star Trek aside, when you decide to move and before the stress of living out of cardboard boxes for months descends; first you trawl the portals (Rightmove/Zoopla/On The Market) to find a new house, which out of the hundreds of properties available to buy, you will probably only view around four or five of them, for no more than 20 minutes each. Then, you will arrange a second viewing of one or two of those initially viewed properties for the estate agency industry stated average of 30/45 minutes maximum (fascinating when you think most people take hours to decide what clothes or shoes to buy but minutes to spend hundreds of thousands of pounds on their next home!).  Then you put your property on the market with an estate agent, find a buyer for your Royal Tunbridge Wells property, agree a price for both, then instruct solicitors. The property becomes sold ‘subject to euphuism’ ... sorry ‘contract’ … as solicitors and surveyors and mortgage companies pick holes in the paperwork, threatening to wreck the chain at any moment, whilst you can’t get too attached to the property you want to purchase in case the sale falls through … phew - stressful or what??!!

Is it worth it? Worth the stress? The brown cardboard boxes? Well many Royal Tunbridge Wells people think so.

In the last 12 months, 382 families have sold and moved home in Royal Tunbridge Wells (TN4)

Yet the question I want raise is ... do people on certain streets in the TN4 postcode move more often than others? Well, the answer might surprise you. I looked at the Land Registry for the all the property sales going back 23 years (to 1995) in the TN4 postcode whilst also calculating the average value of a property on a particular street/road (to see if there was a correlation between price and moving). So initially looking at the top 10 streets in the postcode, in terms of pure out and out house sales, Queens Road is the winner with an average of 15.78 house sales per year(since 1995) as on the graph below.

And to look at the bigger picture, the table below shows the top 25 streets, with the average value of a property on that street.  As you can see, there is no correlation between the average value of a property and the number of times a property gets sold on that street.

However, I still felt the information wasn’t telling the whole story … some roads in Royal Tunbridge Wells have many more properties on than others, so I wanted to then compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold more often) than the rest of the locality. 

In the next article, (and I promise I won’t mention Star Trek again), I will answer that question in great depth ... and the results should (as they did me) certainly raise an eyebrow. The question is ... do you live on one the top 25 Royal Tunbridge Wells most saleable streets in Royal Tunbridge Wells (TN4)?   

Come back to my Royal Tunbridge Wells Property Blog for the next article to find out!

Royal Tunbridge Wells Homeowners Have Made an Annual Profit Of £18,887 Since the Millennium

As we go full steam ahead into 2019, it’s certain that the Royal Tunbridge Wells housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Royal Tunbridge Wells homeowner, having owned their property since the Millennium, has seen its value rise by more than 235%.

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Royal Tunbridge Wells property values has come from the growth in Royal Tunbridge Wells property values, while some of it will have been enhanced by extending, modernising or developing their Royal Tunbridge Wells home.

Taking a look at the different property types in Royal Tunbridge Wells, and the profit made by each type, makes interesting reading..

However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.

 So the ‘real’ value of the profit, after inflation, in Royal Tunbridge Wells has been £11,530 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Royal Tunbridge Wells property, property values dropped between 15% and 20% in 18 months … Royal Tunbridge Wells homeowners over the long term are still better off than those renting. 

Moving forward, the question I get asked time and again is what will happen in the future to the Royal Tunbridge Wells Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium tolongterm to ensure that this level of house price growth is maintained in Royal Tunbridge Wells is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come). 

Another factor is that whilst Royal Tunbridge Wells’ landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Royal Tunbridge Wells see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Royal Tunbridge Wells buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Royal Tunbridge Wells in 2018, most Royal Tunbridge Wells buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Royal Tunbridge Wells buy to let landlord, ensure that continues? 

Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Royal Tunbridge Wells whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements. If you would like such advice, speak with your current agent – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line.

34.5% of All Royal Tunbridge Wells Properties were Bought Without a Mortgage in the Last 7 Years

For most Royal Tunbridge Wells people, a mortgage is the only way to buy a property. However, for some, especially Royal Tunbridge Wells’ homeowners who have paid off their mortgage or Royal Tunbridge Wells’ buy to let landlords, many have the choice to pay exclusively with cash. So the question is, should you use all your cash, or could a mortgage be a more suitable option?

Well, looking at the numbers locally...

4,456 of the 12,896 property sales in the last 7 years in Tunbridge Wells were made without a mortgage (i.e. 34.5%)

Interesting when compared with the national average of 31.9% cash purchases over the last seven years. Next, I wanted to see that cash percentage figure split down by years. As you can see from the graph, this level of cash purchases vs mortgage purchases has remained reasonably constant over those seven years...

Next, if you are going to go for a mortgage, the next question has to be whether you should fix the rate or have a variable rate mortgage. In the last Quarter, 90.57% of people that took out a mortgage, had a fixed rate mortgage at an average interest rate of 2.27%, although what did surprise me was only 65.79% of the £1.429 trillion mortgages outstanding in the whole of the UK were on a fixed rate. The level of mortgage debt compared to the value of the home itself (referred to as the Loan to Value rate - LTV) was interesting, as 61.9% of people with a mortgage have a LTV of less than 75%. Although, one number that did jump out at me was only4.33% of mortgages are 90% and higher LTV - meaning if we do have another property slump, the number of people in negative equity will be relatively small.

Next, looking at the actual number of properties sold, it can be clearly seen the number of house sales has dipped slightly in 2018…

So those are the numbers ... let us have a look at the pros and cons of taking a mortgage, with specific focus on Royal Tunbridge Wells buy to let landlords.  

Taking a mortgage will help a landlord increase their investment across more properties to maximise the return, rather than putting everything into one Royal Tunbridge Wells buy to let property. This will enable the landlord to ensure if there a void in the tenancy, there should still be rent coming from the other properties. The flip side of the coin is that there is a mortgage to pay for, whether or not the property is let.

The other great motivation of taking a mortgage is that landlords can set the mortgage interest against the rental income, although that will only be at the basic rate of tax by 2021 due the recent tax changes. Banks and Building Societies will characteristically want at least a 25% deposit (meaning Royal Tunbridge Wells landlords can only borrow up to 75%) and will assess the borrowing level based on the rental income covering the mortgage interest by a definite margin of 125%.

A lot will depend on what you, as a Royal Tunbridge Wells landlord, hope to attain from your buy to let investment and how relaxed you would feel in making the mortgage payments when there is a void (interestingly, Direct Line calculated a few months ago that voids cost UK landlords around £3bn a year or an average of £1000 per property per year). You also have to consider that interest rates could also increase, which would eat into your profit ... although that can be mitigated with fixing your interest rate (as discussed above).

So, with everything that is happening in the world, does it make sense to buy rental properties? Now we help many newbie and existing landlords work out their budgets, taking into account other costs such as agent’s fees, finance, maintenance and voids
in tenancy. The bottom line is we as a country aren’t building enough property, so demand will always outstrip supply in the medium to long term, meaning property values will keep rising in the medium to long term. That’s not to say property values might fall back in the short term, like they did in 2009 Credit Crunch, the 1988 Dual MIRAS crash, the recession of the early 1980’s, the 1974 Oil Crisis, the early 1930’s Great Depression ... yet every time they have bounced back with vigour. Therefore, it makes sense to focus on getting the best property that will have continuing appeal and strong tenant demand and to conclude, buy to let should be tackled as a medium to long term investment ... because the wisest landlords see buy to let investment in terms of decades - not years.

The £7,002,045 Ticking Time Bomb for Royal Tunbridge Wells Landlords

“I just love looking over and keeping up to date the 108 pieces of legislation that govern the rental of residential property in the UK”  

...No Royal Tunbridge Wells Landlord, ever

  

If you are one of the 2,088 Royal Tunbridge Wells landlord’s that manages your own property, would it surprise you to know that there are 108 separate pieces of legislation that govern the rental of private houses to tenants. Oh, and on top of the 108 pieces of law, there are further 300+ regulations in the mix. Whilst Royal Tunbridge Wells’ landlords may once have preferred to manage their Royal Tunbridge Wells buy-to-let properties themselves to boost their profits, many Royal Tunbridge Wells landlords are starting to see this as a false economy.

In the last four years, an additional 803 landlords in Royal Tunbridge Wells have converted from self-managed to having their property managed by a letting agent in Royal Tunbridge Wells, taking the total number of properties under management in Royal Tunbridge Wells to 3,265 (out of a total of 5,353 private rental properties in Royal Tunbridge Wells).

Now, don’t get me wrong, self-managing your Royal Tunbridge Wells rental property can be a very fulfilling experience, allowing you, as a Royal Tunbridge Wells landlord, to build a deep relationship with your tenant and your emergency 24 hour plumber, builder (happy to do small jobs at a drop of a hat), decorators, first name terms with their deposit provider, lawyer and EPC provider to name but a few. (Wow!)

Also, did you know if your tenants deposit isn’t registered, or doesn’t continue to be registered after the end the periodic tenancy upon renewal ... you could be fined up to three times your deposit? With the average rental deposit in Royal Tunbridge Wells being £1,118, each self-managed landlord in Royal Tunbridge Wells could be fined £3,354 per tenancy if the deposit isn’t currently registered. Therefore...

...if every deposit of every Royal Tunbridge Wells self-managed landlord’s property wasn’t registered, the total fines would amount to £7,002,045

Now of course, I am not suggesting for one minute all the self-managed landlords of Royal Tunbridge Wells haven’t registered their deposits, yet almost on a daily basis, I come across horror stories to that effect. Another two (but by no means all) hot issues that the Courts are cracking down on, are doing immigration ‘Right To Rent’ checks on all tenants (yes all tenants) and confirmation proving the tenant received the ‘How to Rent’ guide. If that second issue cannot be proved (a ‘sent’ email won’t suffice), the landlord cannot serve the section 21 Notice, meaning the tenant cannot be served notice to vacate the property.

To many, it’s really a case of DIY or getting a qualified professional in … as those additional Royal Tunbridge Wells landlords mentioned above have done since 2014. You might say, “Of course you are going to say all this – you are a Letting Agent”. Well the choice really comes down to your time and your knowledge. If a Royal Tunbridge Wells landlord is not equipped, or able, to devote time keeping up-to-date of legislation and law nor doesn’t want to be bothered 24/7/365 about a blown light bulb, dripping taps, have that confrontational conversation with their tenants about missing rental payments, or arbitrate arguments and disagreements between your tenant and the neighbours, it is perhaps better to pass this accountability/responsibility onto a letting agent.

One thing I would say is all letting agents aren’t the same. Would it surprise you to know that letting agents aren’t regulated?

The landlords of Royal Tunbridge Wells that do use a letting agent should not forget that passing over management to a letting agent doesn’t mean they can disregard legislation and they are still responsible for deposit/rent repayment legal directives, civil fines or action if the letting agent makes a mistake. Therefore, it’s important to pick a respectable letting agent from the start. 

Nevertheless, for those Royal Tunbridge Wells landlords that see their job as a professional landlord and want to be intricately involved in the day to day administration of their rental properties, it can be worthy pursuit.

If you are a self-managed landlord in Royal Tunbridge Wells, and want to know if your paperwork is in order please feel free to drop me a line and I am more than happy to do an ‘MOT’ on it to ensure you are the right side of the law.

Royal Tunbridge Wells First Time Buyers Need 13.2 Times Annual Salary to Get on Housing Ladder

What is it to be British? Our stubbornness, long-suffering stoicism, our vexation at injustice, our obsession with football and rugby, we are weather obsessed external awkward noncommittal modest people whilst underneath seething like a volcano because someone jumped the queue….. and our No.1 obsession is with the property ladder.

This ‘love affair’ with owning our own home has been both good and bad for the UK as a whole; giving people financial freedom in their later years whilst also reducing the quantity (and quality) of housing provision whilst adding the extra pressure of a ‘them and us’ society. Strong words I know .. but let me explain more.

I honestly believe that most Governments since the end of the 1970’s, Conservative and Labour, have attempted to nourish our addiction to home ownership (to keep the housing market on track) with the Council House Right to Buy sell off in the 1980’s, tax relief of mortgages, relaxation of the mortgage rules in the late 1990’s/early 2000’s and most recently, the Help to Buy scheme.

But the Brits haven’t always had this obsession.

Roll the clock back 100 years and, in 1918, just under a quarter of all Brits owned their own homes and the other 77% rented. Go back 50 years to 1968, and only 46% of people owned their own home, the rest rented. This homeownership thing is quite a recent phenomenon.

According to my research, anyone looking to get a foot onto the property ladder as a first-time buyer in Royal Tunbridge Wells today, AS A SINGLE PERSON, would need to spend 13.2 times their earnings on a Royal Tunbridge Wells first time buyer property. 

Using the numbers from the Office of National Statistics (ONS), the average value of a first-time buyer property in Royal Tunbridge Wells today is £265,000, compared to £180,000 in 2007. If we divide those property values by the average annual earnings of first time buyers - in 2007, that was £17,758 pa and that has risen to £20,097 pa .. giving us the ratio of 13.2 to 1.

However, what must be remembered is that these are raw statistics from the ONS and don’t take into account other factors, like most people buy their first home as a couple. Also, mortgage rates are at an all-time low and who can remember mortgage rates of 15%+ in the 1990’s, meaning borrowing today is relatively cheap. Also, 95% Loan to Value first time buyer mortgages have been available since the end of 2009  (i.e. you only need to save a 5% deposit) and first time buyer rates of 2.19% fixed for 5 years can be obtained (correct at time of writing this article)… it is cheaper to buy than rent .. fact!

I believe there has been a mind-set change to owning a home. Home ownership was the goal of the youngsters in the latter half of the 20^thcentury. Britain is changing to a more European model of homeownership, where people rent in early to mid-life, wait to inherit the money from their parents when in their 50’s and then buy.. thus continuing the circle - albeit in a different way to the last Century.

This means the demand for privately rented accommodation will, in the long term, only continue to grow. If you would like to know more about where the hot spots are for that growth in Royal Tunbridge Wells, then one place would be my property blog or if you want to drop me an email or telephone call, feel free to pick my brain on the best places to buy (and not to buy) in Royal Tunbridge Wells to ensure your rental investment gets you want you want. The choice is yours!

Royal Tunbridge Wells House Prices vs Royal Tunbridge Wells Rents since 2006

It doesn’t seem two minutes ago that it was 90 degrees Fahrenheit in the shade (32 degrees Celsius for my younger readers), hosepipe bans looked likely and it was simply too hot to sleep at night, yet early indications were, that as the temperatures soared, the Royal Tunbridge Wells property market appeared to be doing the reverse and was already starting to cool down. 

22.12% less people moved home in the Tunbridge Wells area in the first part of 2018, when compared to the average number of people moving home (in the same time frame) between 2014 and 2017

The average number of households who sold and moved locally between 2014 and 2017 in the winter and spring months was 151 homes a month.. yet in the same time frame in 2018, only 118 (on average) sold and moved.

So, what is the issue? Many have cited Brexit as the issue – but I think its deeper than that. 

Brexit seems to be the “go to excuse” for everything at the moment – my neighbour even blamed it for the potholes! Anyway a few weeks ago, I was out for a family get together in another part of the UK when one of my extended family said that they were planning on buying their first home this autumn most of those present said they were stupid to do so because of Brexit. Nonetheless, half an hour later, another distant cousin said to the same family crowd that they were planning to sell their home; to which most said they were also daft to do so because of Brexit.

Both sides of the argument can’t be right! So, what exactly is happening? 

Well if you have been reading my blog on the Royal Tunbridge Wells property market over the last few months, I have been discussing the threats and opportunities of the current state of fluidity in the Royal Tunbridge Wells property market, including the issue of OAPs staying in homes that are too big for them as their children have flown the nest, interest rates, inflation, lack of new homes being built and the long term attitude to homeownership.. yet I have noticed a new trend in the last few months.. the emergence of the ‘sell to renter’.

Sell to Renter?

I have seen a subtle, yet noticeable number of Royal Tunbridge Wells homeowners that have been selling their Royal Tunbridge Wells homes, renting and wagering that, in the next few years, the Royal Tunbridge Wells property market will tumble by more than what they spend on their short-term rental home, before they buy another Royal Tunbridge Wells home in a couple of years i.e. a ‘sell to renter’. This type of ‘sell to renter’ is mostly predominant at the middle to upper end of the Royal Tunbridge Wells property market – so I’m not too sure if it will catch on in the main ‘core’ market?

So, what does this all mean for Royal Tunbridge Wells homeowners and Royal Tunbridge Wells Buy To Let landlords?

Well, in the short term, demand for middle to upper market Royal Tunbridge Wells rental properties could increase as these ‘sell to renters’ demand such properties. I would however give a note of caution to Royal Tunbridge Wells landlords buying in this sector of the Royal Tunbridge Wells property market as yields in this sector can be quite low. However, for homeowners of middle to upper market Royal Tunbridge Wells properties, you might have less people wanting to buy your type of property, as some buyers are turning to renting? 

Like I have always said, Royal Tunbridge Wells properties are selling if they are realistically priced (realistic for the market – not a rose-tinted version where someone will pay 10% over the odds because everyone has access to the market stats with the likes of Rightmove and Zoopla!).

P.S Notice the spike in the graph, where the number of property sales jumped to 271 in the month of March 2016? That was all the Royal Tunbridge Wells buy to let landlords snapping up buy to let properties before the stamp duty rules changed! 

Royal Tunbridge Wells House Prices vs Royal Tunbridge Wells Rents since 2006

The Royal Tunbridge Wells housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a ‘property bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Royal Tunbridge Wells, the market has certainly changed for both buyers and sellers alike (be they Royal Tunbridge Wells buy to let landlords, Royal Tunbridge Wells first time buyers or Royal Tunbridge Wells owner occupiers looking to make the move up the Royal Tunbridge Wells property ladder).

Royal Tunbridge Wells House Values are 1.88% higher than a year ago, and the rents Royal Tunbridge Wells’ tenants have to pay are 1.5% higher than a year ago

When we compare little old Royal Tunbridge Wells to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).

However, if we look further back...

Since 2006, Royal Tunbridge Wells House Values are 77.6% higher, yet the rents Royal Tunbridge Wells’ tenants have had to pay for their Royal Tunbridge Wells rental property are 26.4% higher

...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Royal Tunbridge Wells tenants are 15.6% better off in ‘real spending power terms’.

Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Royal Tunbridge Wells house values (in red) in the years of 2008 and 2009 ... yet as Royal Tunbridge Wells property values started to rise after the summer of 2009, see how Royal Tunbridge Wells rents dipped 6/12 months later (the yellow bars)…. Fascinating!

So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Royal Tunbridge Wells property.

However, maybe an even more interesting point is for the long-term Royal Tunbridge Wells buy to let landlords. The performance of Royal Tunbridge Wells’ rental income vs Royal Tunbridge Wells house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).

Whilst, it’s true Royal Tunbridge Wells landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Royal Tunbridge Wells buy to let portfolio. More and more I am sitting down with both Royal Tunbridge Wells landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Royal Tunbridge Wells portfolio, to ensure your investment will meet your future needs of capital growth and income. If you don’t want to miss out on such a MOT check up, drop me a line – what have you got to lose? 30 minutes of time againstpeace of mind - the choice is yours.