Are Buy to Let Landlords to Blame for Royal Tunbridge Wells’ Housing Crisis?

Isn’t it funny that nobody boasts they are a buy to let landlord anymore? Roll the clock back to the early millennium and you couldn’t go to the local golf club or shop at a Waitrose without someone dropping buy to let into the conversation as easily and as often as the weather. 

Yet now, Royal Tunbridge Wells buy to let landlords have almost pariah status, as they place a brown paper bag over their head when they enter a letting agency, lest they be recognised as such. They can easily be recognised though, as the average age of a UK tenant is 32 years old, whilst the average age of a UK landlord is between 40 and 61 years old.

Joking aside, if it wasn’t for buy to let landlords – Royal Tunbridge Wells and the UK would be in a rather difficult position when it comes to housing our local people. Many people believe that if you take buy to let landlords out of the loop of the UK property network, then it would be the land of milk and honey for first-time buyers priced out of the market. Those Royal Tunbridge Wells landlords provide those tenants with a mixture of homes to live in and using market forces, ensure the right number of Royal Tunbridge Wells homes are available. In fact, the stats show that…

Royal Tunbridge Wells buy to let landlords provide 5,353 homes

for 10,874 Royal Tunbridge Wells tenants

Yet the retort from many tenant organisations would be that Royal Tunbridge Wells landlords are wealthy middle -lass people, voraciously exploiting the failing Royal Tunbridge Wells property market for their profit and greed. Of course, the demographic of an average Royal Tunbridge Wells landlord is they tend to come from more fortunate backgrounds, with 3 in 4 landlords aged between their late 40’s to late 60’s and 4 in 10 having a degree level qualification.

It also wouldn’t surprise anyone to learn that those who invest in buy to let Royal Tunbridge Wells property are likely to be better off than those who have not yet been able to buy a home. Yet, that is the nature of the country we live in and it’s a consequence of a competitive free market economy (the alternative didn’t go too well in Soviet bloc). Indeed, asserting that the buy to let landlords represent a transfer of wealth and money from tenants to landlords is like saying that the pub represents a transfer of wealth from drinkers to the pub landlord.

Don’t get me wrong, the tax loopholes for landlords up until 3 or 4 years ago were a little ‘too’ generous, still these were closed by the Tory’s themselves. However, should the Government try to place even more burden on landlords like some are suggesting, forcing them to sell, I am certain some Royal Tunbridge Wells first time buyers would find it cheaper to buy their first home. This is because they wouldn’t be in competition with Royal Tunbridge Wells landlords to buy the starter homes both types of buyers crave, meaning house prices would drop (simple economics would dictate that). 

Yet, if the supply of Royal Tunbridge Wells privately rented homes contracted at a greater rate (because landlords were selling up) than demand, this would make renting more expensive (again simple economics) for the vast majority of Royal Tunbridge Wells tenants who were still renting a local home. Irrespective of whether property values dropped, it might take years for a tenant to save for a deposit, whilst for the rental properties the landlords wants to sell, the tenants only need to be given two months’ notice to leave so the property can be put on the market. 

One might ask why don’t the local authorities build more council houses?

Well, Government funding has been tight because of the Credit Crunch deficit since 2009 and going forward because of the current situation with Covid-19, it will get even worse. In fact, of the 617,230 new homes built in the country over the last 4 years, only 8,270 or 1.33% were built by local authorities, meaning only just over 1 in 100 of all new properties built in the last 4 years were built by the local authorities.

This is important as the number of people in rented property has been growing over the last 20 years. In fact, when you look at all the tenants in council and private rented accommodation locally…

34.3% of Royal Tunbridge Wells people live in a rented property

Interestingly, the demographic of a council house tenant is totally different to that of a tenant in a private rented home. The average age of a council house tenant is 52 years old (compared to 32 years for a private rented tenant), so it appears the older generation have the upper hand on council houses. So again, who exactly is going to house the people of Royal Tunbridge Wells, especially the younger generation that can’t afford to buy?

Local authorities haven’t got the money, housing associations get their money from central Government, so the only other source of housing is private landlords. The problem existed before private landlords filled the gap. No doubt many Royal Tunbridge Wells landlords have certainly gained from the problem, especially between 2000 and 2007, yet at the same time, they have helped home millions of people. 

Consequently, are Royal Tunbridge Wells landlords greedy and selfish?  For most law abiding Royal Tunbridge Wells landlords, who look after their tenants and their properties really well, nothing could be further from the truth… and yes they have made some money – yet if you take into account property maintenance, mortgage finance, taxation, agent fees, surveys and inspections – it’s really not the gold mine many think it is. 

Not until all the political parties stop using the housing issue as a political football will this issue be sorted. For example, it makes sense to allow mass building in the South East, again driving up supply and making property more affordable, yet that would wind up the Tory voting home county heartlands. It’s a shame because we do have the room to build more homes, in fact…

Only 1.2% of the country has houses built on it

The country needs a massive root and branch change to sort things out, yet I have grave misgivings that any politician has the stomach or the political resolve to do anything about it. 

If Covid-19 does affect the confidence in the property market that will in fact be good news for Royal Tunbridge Wells landlords, as long as the Government doesn’t put its big ‘size 9’s in to the rental market by taking even more money out landlords pockets.

Historically, ambiguity in the property market typically results in an expansion in activity in the private rental market. Prospective home movers will rent in between selling their home and buying the next one, while budding first time buyers typically postpone their purchase and stay in the private rental market for marginally longer … which all increases demand for rental property.

GREAT NEWS FOR FIRST-TIME BUYERS IN TUNBRIDGE WELLS AS POPULAR MORTGAGES RETURN

We look at the return of 90% loan to value mortgages (LTV) and the flurry of activity in the housing market.

The property market has received a shot in the arm with some lenders including Nationwide reintroducing 90% LTV mortgages for first-time buyers.

As Nationwide is Britain’s second-biggest lender, the decision is another piece of good news for the sector which has roared back into action in recent weeks.

Metro Bank, Coventry for Intermediaries and Platform, the intermediary arm of the Co-operative Bank, have also brought back 90% LTV products.

Why are 90% LTV mortgages such a big deal?

For many first-time buyers, the most significant barrier to purchasing their own place is getting the deposit together.

With their 10% deposit requirement, 90% LTV mortgages are the most accessible option for those striving to buy their first home.

So, when lenders pulled their 90% LTV deals in June due to uncertainty over the economy, first-time buyers felt the squeeze. This was a broader concern for the industry because if property newbies can’t enter the market, it affects all the other players in the property chain.

First-time buyers are a driving force in the housing market, responsible for more than a third of all sales (according to property portal Zoopla). But now good mortgage deals are back on the table, things are looking up.

Back on track – big-time

After months in the doldrums due to lockdown, there has been a flurry of activity in the TUNBRIDGE WELLS housing market.

Miles Shipside, commercial director, and housing market analyst at Rightmove, said: “There’s been record demand for property on Rightmove since the market reopened.”

*IN ENGLAND AND NORTHERN IRELAND ONLY 

The big-ticket decision in the Chancellor, Rishi Sunak’s recent mini-budget, was a Stamp Duty holiday on the first £500,000 of a property – a move that could save buyers up to £15,000.

The special measure is only available until the end of March 2021 but is a double whammy of good news for first-time buyers when combined with the 90 % LTV announcement.

The Perfect Time to Move in TUNBRIDGE WELLS

Crucially, it’s not just buyers who have returned to the TUNBRIDGE WELLS market. Sellers, many of whom were forced to sit tight during the lockdown, are now ready to move.

It’s estimated that lockdown prevented about 175,000 sellers across the UK bringing their property to market. Many of those are now making up for lost time.

With so many sellers keen to move after being held up by lockdown, the stamp duty holiday and the mortgage news now is the perfect time for first-time buyers to get onto the ladder.

If you know someone who might find this article of interest, please share it with them or tag them below.

Here at Martin & Co Tunbridge wells, we’re here to help you make your move. Whether you’re a first-time buyer, or someone looking for pastures new, we can make it happen.

What Rishi Sunak’s latest pledges mean for landlords in TUNBRIDGE WELLS

WHAT LANDLORDS IN TUNBRIDGE WELLS NEED TO KNOW ABOUT STAMP DUTY AND THE GREEN HOMES GRANT

In this three-minute read, we look at what the Stamp Duty holiday and a new grant scheme for green home improvements mean for landlords.

Chancellor Rishi Sunak made two big announcements about the property market last week and triggered a flurry of activity.

Both initiatives represent attractive propositions for savvy landlords. But, as always, it pays to do your homework first.

Stamp Duty holiday

The Chancellor’s headline-grabbing announcement was a Stamp Duty holiday. He raised the threshold to £500,000, a move that means a potential Stamp Duty saving of up to £15,000, depending on the price of the property. 

But all holidays must come to an end, and this one runs out at the end of March 2021. So, buyers will have to move relatively quickly, given the time it takes to complete on transactions. As they say, you snooze, you lose.

What it means for landlords

For buy-to-let investors who wish to expand their portfolio, this is a significant opportunity even though the current 3% surcharge that applies to second homeowners still stands.

But - and sorry to state the obvious here - it only represents a saving if you buy at the right price. Landlords also need to weigh up the state of the lettings market to gauge their rental returns. 

While most rental markets are holding firm, given how much has happened in recent months, it’s worth getting expert advice first. Talk to us about where the TUNBRIDGE WELLS rental market is heading before you make any big decisions.

Green Homes Grant

The second big announcement was the Green Homes Grant scheme which aims to encourage property owners to make their homes more sustainable. 

Full details on the scheme are still to come but, in essence, landlords can get a grant that covers two-thirds of the cost of energy efficiency improvements up to the value of £5,000. The scheme covers insulation, eco-friendly boilers, double glazing, draught-proofing, solar panels, and heat pumps.

To be eligible landlords will need to make an online application (the government promises the website will be up and running from September). Local suppliers will then quote on the work, and if the government approves the submission, it will issue a voucher.

So, if you’ve been thinking about replacing the rattling single-glazed windows at your property, or installing solar panels, now is an excellent time to take the plunge (once you’ve received the nod from the government, of course).

 

Providing the work is carried out to a high standard, this will be a good move for the environment and your pocket.

It’s also an opportunity to make a property more appealing to tenants (who doesn’t want to live in a home with low running costs?).

And should you wish to sell further down the line, it makes the property more marketable.

For advice about how best to make your property energy efficient, speak to us.

We’re used to advising clients about energy efficiency standards and can provide feedback about the most effective green measures. 

For up-to-date analysis of the lettings market or advice about making a property more energy-efficient, contact us here at Martin & CO.

We’re here to help landlords realise the full potential of their investments.

The Royal Tunbridge Wells Post Lockdown Property Market - What have we learned in the first month?

From talking to most of the Royal Tunbridge Wells estate and letting agents and our own findings, it might surprise many of you that new enquiries from homebuyers, tenants, landlords and home sellers have been at record levels since lockdown was lifted from the property market in mid-May.

There are a number of reasons for this. Firstly, we had the pent-up demand for Royal Tunbridge Wells property from the Boris Bounce in January and February. Next, many Royal Tunbridge Wells people were planning to move this spring yet were prevented doing so because of lockdown, and finally, surprisingly, an advance wave of home movers seeking to bring their Royal Tunbridge Wells moving plans forward because of a fear of a second Covid-19 wave later in the year.

So, what does all that look like and how does it compare to the last 12/18 months?

Data from Yomdel, the live chat and telephone answering service for a quarter of UK estate and letting agents, is able to track objective and more current information from across the UK on what is really happening. Each week, they are dealing with thousands of enquiries including: 

·       Seller enquiries (i.e. house sellers looking to put their property on the market) 

·       Buyer enquiries (i.e. people looking to view a property on the market with the intention of buying it) 

·       Landlords enquiries (i.e. landlords looking for tenants for their rental property) 

·       Tenant enquiries (i.e. people looking to view a property on the market with the intention of renting it) 

They have created a rolling weekly average of those enquiries for the whole of the UK for the 62 weeks before the country went into lockdown. Then they compared that 62 week average with specific time frames, namely the 10 weeks of the run up to the General Election, the 8 weeks of Post Boris Bounce in January and February 2020, the weeks of lockdown in March, April and early May and then finally, from mid-May, the post lockdown. 

You might ask why tracking estate and letting agency enquiries is so important? 

Enquiries in letting and estate agencies are the beating heart of the property market – they are the ECG machine of the estate and letting agency. Of course, house price data has its place and is lauded by the national press as the bellwether of the property market, yet it takes 6 to 9 months for the effects of what is happening today to show in those house price indexes, whilst these enquiries are what is happening now. 

Have a look at the data in the graph and table, it can be seen in the 8 weeks up to the General Election, every metric was down. Next, the post Boris Bounce saw house seller and house buyer leads increase yet note how low tenant enquiries were (hardly any change from the run up to the election), everything dipped during lockdown as expected, yet look at all the metrics post lockdown … amazing! (e.g. if a number in the graph/table below is say -25%, that means its 25% below the rolling 62 week average, yet if it were +20%, then that would mean it would be 20% more than the rolling 62 week average)

	General Election Run Up	Post Boris Bounce	Lockdown	Post Lockdown
Seller Enquiries	-27.0%	20.6%	-41.9%	94.3%
Buyer Enquiries	-19.9%	12.9%	-9.3%	163.7%
Landlord Enquiries	-10.9%	1.0%	-27.6%	78.5%
Tenant Enquiries	-34.9%	-27.2%	-23.1%	92.5%

The numbers speak for themselves! 

So, what is happening in the Royal Tunbridge Wells property market? Well, there is plenty of activity in the Royal Tunbridge Wells property market, yet that doesn’t mean everything is back to normal. Enquiries are an important metric, yet another way to judge the health of the property market is to look at the number of property transactions (i.e. people moving). 

Now the Land Registry data isn’t quite as exhilarating, yet it is less volatile. Nationally, it shows that property transactions were at their lowest level since its records began in April 2005. The seasonally adjusted estimate of UK residential property transactions in April and May 2020 was 90,210, 53.4% lower than the 193,500 transactions of May & April 2019. Again though, this was because of the restrictions on moving during Covid-19. The stats for Royal Tunbridge Wells are still to be released, yet rest assured I will share them in due course.

Looking again at what is happening now, when I look at the number of properties for sale…

219 Royal Tunbridge Wells properties have come onto the property market in the last 30 days alone, and of those, 33 are already sold subject to contract

So, what of the future of the post-lockdown Royal Tunbridge Wells housing market? While a stern recession seems almost guaranteed, a housing market crash is not. Many newspapers are predicting property values to fall in 2020, then rise reticently from the ashes in 2021. The fact is, nobody knows. The property market is driven a lot by sentiment. Buying a home is not like buying stocks and shares - it’s a home to live in … and those Royal Tunbridge Wells landlords who are looking for an investment opportunity, often let their heart rule the head (again sentiment) when investing in property.

Property always has, and always will be, a long-term investment. Many of you Royal Tunbridge Wells people reading this, especially potential Royal Tunbridge Wells first time buyers, have been putting off buying your first home because of Brexit, now its Covid-19, and in a few years, it will be something else. There will always be ‘something else’… and you could get to your 50’s and 60’s, still renting, waiting for the ‘next thing’ to pass before you buy … and end up buying nothing.

Nobody knows what the months or years ahead will bring ... yet what I do know is, people will always need a place to live. Please let me know your thoughts in the comments. Tell us what your experiences are as a Royal Tunbridge Wells landlord or homeowner, tenant or buyer so we can all learn from each other.

I’M A ROYAL TUNBRIDGE WELLS LANDLORD DROWNING IN RED TAPE, GET ME OUT OF HERE!

We look at the legal responsibilities of landlords in TUNBRIDGE WELLS – and reveal why it pays to let the experts handle the red tape.

 

How landlords in TUNBRIDGE WELLS can escape the red tape jungle

Some people say being a landlord is easy. These people are wrong.

Glance through the list of the 175 plus laws that apply to landlords in the UK and you quickly realise there is a lot more to the lettings game than most people think. 

They cover everything from tenancies and evictions, to energy ratings, pollution, and electrical safety. It’s a regulatory jungle out there folks.

To stay on the right side of the law, landlords must get their heads around a mountain of red tape. Failure to do so can result in fines, bans or even jail.

We’re not exaggerating

These days tenants know their rights and authorities are not afraid to act. In the past month alone, several landlords have made headlines for all the wrong reasons.

In Coventry, a landlord was ordered to repay £11,000 after renting out a property for eight months without the appropriate licence. While in Poole a landlord was banned from letting or managing property for five years for 12 offences relating to the management (perhaps that should be mismanagement) of a HMO (House in Multiple Occupation). 

And this is just the tip of the iceberg. As lockdown measures continue to lift across the UK, the wheels of justice will start to turn again at an even faster pace.

So, expect more cases like this to make the news.

Finding your way through the maze

It’s important to note that the 175 plus laws that we refer to don’t apply to every single landlord in the UK. 

Some tax-related laws apply across the UK. Others relate only to landlords in England and Wales. Then there are laws just for landlords in Wales, laws just for landlords in England and, you guessed it, laws just for landlords in Scotland.

Confused? Don’t worry because you’re not alone.

Increase in regulations

The regulatory landscape has changed significantly in the past decade. Many of the changes were introduced with the right intention – to root out the small number of rogue landlords who make tenants’ lives hell. 

Unfortunately, the push to clean up the sector has placed a significant burden on all landlords, the vast majority of whom were doing the right thing all along.  

FOR ENGLAND AND WALES ONLY, DELETE IN SCOTLAND

In England and Wales, for example, there has been a 32% increase in rules and regulations relating to the private rental sector since 2010. 

FOR SCOTLAND ONLY, DELETE IF ENGLAND AND WALES

In Scotland, for example, new rules came into force last year around the National Landlord Register. Previously the information landlords had to provide when registering was relatively minimal.

Nowadays, much more detail about the standard of the property itself is required. Failure to provide accurate information can result in a fine of £1,000. (And don’t even think about not registering, this can attract a £50,000 fine).

The Covid-19 effect

As if things weren’t complicated enough, the pandemic has added a higher level of complexity, particularly around evictions and rental arrears. 

Help I’m freaking out about all these rules!

Don’t panic. If you don’t have the time or inclination to become an expert in lettings legislation, help is at hand.

We can take the weight off your shoulders. We deal with these kinds of issues day in and day out and can save you time and, in the long run, money. 

Many people feel property is a safer investment than stocks and shares right now (and we agree with them). With a good lettings’ agent, you can grow your property investment, enjoy peace of mind, and escape the rental red tape jungle.

Here at MARTIN & CO our experienced team is happy to help landlords meet all their legal obligations. If you have any questions, please get in touch. 

The Lockdown in TUNBRIDGE WELLS in Numbers

13 Ways Lockdown Changed People’s Habits in TUNBRIDGE WELLS

As we get used to the ‘new normal’, we take a quick look back at how people’s habits dramatically changed during the lockdown

Recently The Sunday Times published a fascinating collection of statistics around how the lives of people in the UK transformed during lockdown.

We’ve broken it down into four sections – Health, wealth, happiness and of course, homes.

These national trends have been reflected across TUNBRIDGE WELLS.

*Figures are comparing April with March 2020 and sourced from John Lewis and the Office for National Statistics unless stated.

Health

With gyms closed and time on their hands people turned to exercising at home.

300% - The fitness app Strava saw a massive leap in usage.

72% - Rise in sales of sports shoes.

496% - The purchase of gym equipment surged.

Wealth

60% - Drop in withdrawals from ATMs.

£16.2 billion - Rise in household savings in April.

200% - The share price of video conferencing app Zoom rocketed this year. (Up to May 31).

Happiness

To keep our minds off you know what, we turned to:

240% - Board games and jigsaws proved hugely popular with soaring sales.

18% - An increase in online chats recorded by dating app OkCupid.

50% - Increase in sales of rose wine. *Source Majestic Wine.

76% - Rise in sales of sherry. *Source Majestic Wine.

Home

With more time spent at home, people have been turning to DIY and splashing out.

480% - Argos reported selling out of hot tubs, and eBay reported a massive spike in demand.

18% - On May 27 property portal Rightmove recorded its busiest ever day, up 18 per cent on the previous year.

74 % - Of households carried out some form of DIY during April and May according to Comparethemarket.com

At Martin & CO Tunbridge Wells we’ve seen a surge in interest as the lockdown relaxes and people want to get moving again.

Of course, the most important and heart-breaking statistics during and after lockdown are the number of people who sadly lost their lives to this terrible illness.

Our thoughts are with their families and loved ones.

Thanks for reading, and if we can help you in any way, please get in touch. you can read other stories and fact at mt property blog just google Royal Tunbridge wells property Blog.