Your Pension could now buy a Buy to Let property in Royal Tunbridge Wells

In a recent article, I mentioned that pension rules are changing this April. It certainly created a few emails, with people asking questions about it. Therefore, this week, I want to look a little deeper into the subject of your pension and the Royal Tunbridge Wells property market. George Osbourne, in last years’ Budget, announced pension reforms that come into effect this April, which will give people with pensions unprecedented access to their pension pot and the freedom to look for alternatives. In a nutshell, after the 6^th of April, anyone aged over 55 will be allowed to withdraw all or part of their pension pot and spend it as they wish. Until now, you were allowed to take out a quarter of it and were forced to buy an annuity policy with the rest.

However, my readers always know that I like to tell it ‘as it is’. There are always two sides to a story, good and bad. Let me tell you the bad news first. There are some hefty tax implications by taking money from your pension pot. As before, as per the old rules, the first 25% can still be withdrawn from the pension pot tax free but, here is the sting in the tail, if you take more than a quarter of your pot (25%), anything above that initial 25% level will be taxed as income. So if you took the whole lot out, the first 25% will be tax free but the remaining 75% will be taxed at your income tax rate of 20%, 40% (or even 45% if you earn over £150,000 a year) .

.. and now the good news!

Under the old scheme, if you bought an annuity, when you died your annuity normally died as well. You would have no asset to pass on to your family. Also, the returns from pensions are awful at the moment. The best rates according to Hargreaves and Lansdown (big wigs in the City) state if you were 55 years old, the best rate you would get on your annuity pension would be 4.4% fixed for life (so it would never go up) or 2.2% but the payment would go up with inflation.  The sort of rates (also known as yields in the property investing game) being achieved in Royal Tunbridge Wells are in the order of 3% to 6%.

The other aspect of property investment is how the fact property values have risen consistently over the last 50 years.  According to the Office of National Statistics, the life expectancy of a 65 year old male in Royal Tunbridge Wells is 19 years and 6 months (its only 19 years 4 months in Tonbridge). If we roll the clock back 19 years 6 months to November 1995, property values in Royal Tunbridge Wells have risen by 261% to today .. you wouldn’t have had that with your pension!   But this is the biggest win, even by taking a hit in income tax now,  by buying a property, you buy an asset that you can pass on to your family when you die.... (or the cats home if they aren’t nice to you!).

So where next? It totally depends which strategy you are going to look at, one strategy is to look to achieve relatively small rental returns (ie low yields) in an up market area which has decent capital growth or, alternatively, another strategy is to buy properties in not so good areas known to produce a high returns (ie high yields) but low capital growth (ie how much the value of the property goes up). Now, I am not financial advisor, so cannot offer financial advice on what the best thing for you with your pension is. However, I can share my knowledge and experience of the Royal Tunbridge Wells property market, what to buy, what not to buy and where to buy etc etc.  My thoughts on the Royal Tunbridge Wells Property market can always be found on the Royal Tunbridge Wells Property Blog  

Massive drop in Homeownership in Royal Tunbridge Wells

An Englishman’s home is his castle but when it comes to the UK  the ‘Brit’s are still a nation of homeowners ‘(although wasn’t it Napoleon who thought we were all shop keepers!). It  is interesting to note that up until the mid to late 1960’s, more people rented their home (albeit mostly from the local council) than owned their own. In fact, I was surprised to read that in 1921, over 75% of homes in England and Wales were privately rented with the remaining 25% being owner occupied. 

It was only after the Second World War, when the Beatles were rocking, that people started to buy instead of rent .. but instead of owning our property outright, we borrowed money from banks and building society’s to buy them and the roots of the growth of the private rental sector can be drawn back to the late 1970’s early 1980’s, when the council houses began to be sold off under the right to buy scheme.

In 2001, 71.7% of households were owner occupied in Royal Tunbridge Wells, but ten years later, that percentage dropped massively to 65.7%.  But here is the interesting part, when you look at the actual numbers of households, 30,540 households in Royal Tunbridge Wells were owner occupied in 2001. Ten years later, in 2011, that number (who owned their own home) had slightly increased to 30,999 households.

So why big drop in percentages but not in actual properties? An additional 4,479 properties were built in Royal Tunbridge Wells between 2001 and 2011, but a lot of them were bought as buy to let investments, thus more than doubling the number of private rental properties in Royal Tunbridge Wells. In fact, the number of properties in Royal Tunbridge Wells, which were privately rented, jumped from 4,092 in 2001 to 7,412 in 2011!

With the local  Council housing waiting lists being in the 5 to 10 year range for a decent property in a decent location. Therefore, with no more council houses being built, and an increasing number of people looking for a roof over their head, private renting is the only option

With every report stating the rental market will continue to grow throughout the rest of this decade and beyond, linked with high demand and limited supply in the Royal Tunbridge Wells, then if you are considering buying a property for buy to let investment in Royal Tunbridge Wells, as I don’t sell property (I’m just a letting agent), I am always happy to give you my considered opinion on which property to buy (or not as the case may be).

Is the Royal Tunbridge Wells Property market holding its breath over the General Election?

Has apathy has hit the Royal Tunbridge Wells housing market as sellers await the outcome of the general election and stricter mortgage regulation suppresses buyer demand? Rightmove reported the number of homes registered for sale per estate agent fell to its lowest level for five years in December, with available stock 10% lower than in the same month a year earlier.

Looking at Royal Tunbridge Wells, in the summer of 2014, each estate agent in Royal Tunbridge Wells had on average 18.3 properties on its books (as there were a total of 678 properties up for sale in Royal Tunbridge Wells at the peak in the summer just gone). Our research shows that number plummeted to 12.7 per agent in December.  While the lack of new properties coming onto the market in the later months of 2014 in Royal Tunbridge Wells pushed asking prices up slightly from November to December, traditionally a quiet season for the housing market, property sellers will need to work hard in 2015 to complete a sale.

The length of time a property takes to sell has ever so slightly increased over the last few months. Two bedroom properties in Royal Tunbridge Wells are now taking 80 days to sell, three bedroom 63 days, four bedrooms 61 days, but here an interesting figure, one beds are taking on average 85 days to find a buyer

2015 will be the year of the selective mover.  With only 445 brand new properties a year being built in Royal Tunbridge Wells since the turn of the Millennium, this woefully low and insufficient number of new buildings in the town over the past few decades and a systemic change in the type of properties homeowners want (with families splitting etc so we have too many larger houses and not enough smaller ones), buyers are becoming dissatisfied with, and therefore dismissive of what is up for sale.

The heat has gone out of the Royal Tunbridge Wells property market and I anticipate a moderate reduction from the high transaction volumes seen in 2014, but it most certainly isn’t icy cold. That might mean Royal Tunbridge Wells landlords could bag a bargain during this period of uncertainty, especially if the financial markets do not like the election outcome. Markets and buyers do not like uncertainty, but savvy Buy to let landlords know buy to let is a long term game, and irrespective of short term apathy, reduction in the quality and quantity of stock for homeowners to buy  or the election, if people don’t buy property they rent.  The Council aren’t building anymore properties, the council house waiting list is decades, not years for the better type of property .. the only other place to get a roof over your head .. rent a property!  Good old Bricks and Mortar! In fact with less properties coming on the market in Royal Tunbridge Wells, that will keep prices quite stable.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. 

Pembury – the place to buy a property?

Information is so important when making decisions on what (or not) to buy when investing in Royal Tunbridge Wells property. The demand for rental properties is much greater that the supply and some circumstances, we have four to five prospective tenants for each decent property. As always the demand is much greater for properties that are good areas. Also, we are noticing that tenants are staying longer in their chosen property with some tenants signing for the third and fourth years. This is obviously causing problems from the supply side so we are relying on new investment Landlords to bring in some new properties.

 Today, I want to look at the Pembury to the North of Royal Tunbridge Wells. By knowing the different areas of Royal Tunbridge Wells, I can weigh up potential hotspots in the rental market and show potential landlords where there could be an opportunity. The majority of properties sold in Pembury during the last 12 months were terraced houses which on average sold for £236,800. Semi-detached properties had an average sold price of £343,100 and detached properties averaged at £396,100.

The overall average property in Pembury is worth £308,200, which as one would expect is lower than Royal Tunbridge Wells overall average at £348,500 or nearby Southborough at £327,800 or Matfield at £439,700.

In Pembury, there are 5,924 people living in 2,400 properties. It is the home ownership percentages that really got me interested, as it is this information, tied in with our intimate knowledge of the market, where we can match tenant demand to an under supply of rental properties. In Pembury, of those 2,400 households, 74.3%  own their property (compared to the Royal Tunbridge Wells average of 65.7%).

There are only 179 rented properties in Pembury which are in the private rented sector (meaning 7.4% of Pembury properties are privately rented compared with the Royal Tunbridge Wells average of 15.7%). The reason the private rental sector is much lower is that Pembury has a high proportion of homeowners and hardly any local authority housing. The properties do sell well, in fact 452 properties have changed hands since 2007. However, with such excellent demand from homeowners and tenants, this could be the right area to purchase your next buy to let investment. 

Therefore, if you are considering buying a property for investment in the near future, as I don't sell property, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. If you are a landlord, new or old, I am certainly more than happy for you to pick up the phone or visit the Royal Tunbridge Wells Property Blog 

What properties are actually selling in Royal Tunbridge Wells?

Prices up, prices down, prices stable .. the newspapers are full of good news, bad news and indifferent news about the Brit’s favourite subject after the weather .. the property market. The thing is the UK does not have one housing market. Instead, it is a patchwork of mini property markets all performing in a different way.  At one end of scale is London, which has seen average prices grow in the last twelve months by a shade under 19% (and again that is an average because some Borough’s  in London have risen by 26%) whilst in the land of Daffodils , by contrast, Wales only saw a 2% increase in property values (although in the Merthyr Valleys they dropped by over 11%).

Well we can’t ignore the rest of the UK, and we can’t forget that the Chancellor’s Stamp Duty reforms have polarised the London property markets above £1,000,000 because at the top end of the market, punitive Stamp Duty charges will dampen demand further. While the Bank of England warned of the growing London property price bubble in the Spring of 2014, even talk of a recovery in some areas was premature. In 2015, irrespective of where you are in the UK, one story will unite the patchwork quilt of markets –  really slow property value growth.

But what about Royal Tunbridge Wells? Well, we haven’t had the December figures from the Land Registry yet but the last few months’ activity and prices achieved would suggest neither house price growth nor drops.  In fact, most sellers are buyers anyway, so if you need to take less for yours, you won’t have to pay as much for the one you want to buy ... and that is good news for everyone as most move up market when they move. This is even better for landlord investors, as they can bag a bargain as well.

The question you should be asking though is not only is what happening to property prices, but which price band exactly is selling? I like to keep an eye on the property market in Royal Tunbridge Wells on a daily basis because it enables me to give the best advice and opinion on what (or not ) to buy in Royal Tunbridge Wells. 

If you look at Royal Tunbridge Wells and split the property market into four equalled sized (into terms of households) price bands. Each price band would have around 25% of the property in Royal Tunbridge Wells, from the lowest in value (the bottom 25% ) all the way through to the highest 25% (in terms of value).  Over the last two months (63 days to be precise),....

• In the lowest quartile, (those with asking prices under £227k) 96 properties have come onto the market in Royal Tunbridge Wells and 48.9% of them (47 properties have a buyer and sold stc. 
• The next quartile, between £227k to £300k, of the 101 properties that come on to the market, 35.6% of them (36 properties) have a buyer. 
• The £300k - £525k price range has seen 119 properties come on to the market, and 26.8% of the properties have a buyer (32 properties). 
• The most expensive 25%, the £525k plus range, has seen 34 of the 84 properties that came on to the market find buyers (40.4%).   

Fascinating don’t you think?

The next three months’ activity will be crucial in understanding which way the market will go this year and I honestly believe we will not see any house price growth or drops this side of the election. Election or no election, people will always need a roof over their head and that is why the property market has rode the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008.

And why? Because of Britain’s chronic lack of housing will prop up house prices and prevent a post spike crash. ... there is always a silver lining when it comes to the property market! 

The Sherwood Estate’s property market outperforms Culverden’s by 85%

A couple from the Culverden area came to our offices to discuss potentially investing in property for Buy to Let in Royal Tunbridge Wells. I reminded them that one of the most important considerations you will have to make before investing is considering the balance between annual return/yield and the annual value increase/capital growth of the property that you buy.

One of the most sought after places to live in is Culverden on the North Western side of Royal Tunbridge Wells. There are 4,081 households here and an impressive 1,198 of those households in Culverden are owner occupied (representing 53.8%) and 1,565 of those households (or 38.3%) are privately rented. Culverden has many different types of housing, but the larger executive properties sell for around £850,000 to £860,000 and this type of property rents on average  for £2,050 per calendar month.

The Sherwood Estate on the other hand is a different story altogether yet very similar to Culverden. Of the 3,001 properties in the Sherwood Estate, 1,573 are privately owned which amounts to 52.4% home ownership.  However, there are only 245 privately rented houses (representing 8.2% of households)  because the majority of properties are in the social housing sector where 977 (or 32.6%) of households are rented from the Council.

With this in mind, I carried out some further research and found that the Sherwood Estate’s property market has outperformed the Culverden property market where those detached houses are. This is because a three bedroom mid terraced / semi-detached house on The Sherwood Estate have been selling on average recently for £218,700 and the achievable rents have been £950 per calendar month. The yield which could be achieved from property on The Sherwood Estate is therefore around 5.2% per year. When we compare this to the possible 2.8% per year yield on Culverden, that yield/return is 85% proportionally higher in The Sherwood Estate than Culverden.

We must remember however that yield is not the sole consideration when investing in Buy to Let properties. Areas which offer good yields (ie The Sherwood Estate), normally suffer from poor capital growth (ie the properties in the area with poor yields don’t up in value as quick as the posher areas.) Looking at average property values in Culverden back to 1999, the average property in Culverden has risen by 158% to today. However, average values in The Sherwood Estate have only risen by 121% in the same time frame.  It just goes to show, do you want yield or you want capital growth when in investing in buy to let property?

If you would like more information on investing in Royal Tunbridge Wells’s property market, please call me on  01892 54 38 56 or pop into our offices on Vale Road, Royal Tunbridge Wells.

Are there any property bargains in Royal Tunbridge Wells?

Newspapers report property prices in England have soared to a record high – sparking predictions that the country is facing another dangerous property bubble. Values in Kent are still 1.35 per cent higher than their previous peak in the Autumn of 2007. Even with that news, I have been speaking to a couple of landlords over the last few weeks who had concerns in some quarters that the state backed schemes to boost the supply of mortgages such as Funding for Lending and Help to Buy are inflating a new housing bubble. Those landlords are asking if this means the end of property bargains in Royal Tunbridge Wells?

Well, if you do your homework, there are still plenty of good buys in Royal Tunbridge Wells. Don’t expect them to come on the more popular streets in the town. The first rule of buy to let investment is that it is isn’t you that is living in the property, it’s the tenant, and there is always demand for every street in Royal Tunbridge Wells.

Back in late Summer of 2012 a two bedroom top floor apartment located in the purpose built Sand Rock House development with views over Dunorlan Park  came onto the market with an asking price of offers over £250,000.  The property was pleasantly presented inside although a little dated. I kept the photos of the inside and it had a white modern bathroom suite and a kitchen that was not unpleasant.  It sold in the Spring of 2013 for £230,000.  Fifteen months later with what I can see was just some inexpensive new carpets,  some emulsion on the wall  and a bit of modern furniture, it sold again for £375,000 in the Summer of 2014 just gone.  In essence the new owners spent, in my opinion, no more than £5,000-£10,000 but made a profit after costs of £100,000 to £110,000, increasing the value of the flat by 38.8%.  Over the same time frame average property prices in Royal Tunbridge Wells only rose by 16.25%.

By keeping an eye on the local market, I am able to judge if a property is good value to buy for a landlord. I give this advice and opinion freely to anyone who asks, be they an existing landlord of ours or of another agents. I will also give it to anyone thinking of becoming a buy to let landlord for the first time.

I do not charge for this service, because if I offer you a honest and straight forward opinion, you could consider using me to manage your property. However, I must stress there is no obligation to do so. Feel free to pop your head through our door on Vale Road in Royal Tunbridge Wells to chat about the ups and downs of the property market in Royal Tunbridge Wells.

Royal Tunbridge Wells’s property market has outperformed Chislehurst’s by over 49%

Within Kent we have many towns and areas that make up our fine County, from the up market posh areas of the Sevenoaks, Chislehurst and Cranbrook all the way to the working class non nonsense areas of Chatham, Ramsgate and Sheerness.  In fact I have a few landlords from Chislehurst, one in particular who has a decent portfolio of buy to let property in Chislehurst, Royal Tunbridge Wells and other parts of West Kent. 

Chislehurst is an affluent town on the outskirts of Kent and is popular because of its’ local private schools, great choice of properties and fast links to London but with all the flexibility of living in the countryside.  Chislehurst offers a comprehensive of upmarket shopping facilities and  all of these factors make the average value of a property in Chislehurst around £650,600.

Our town of Royal Tunbridge Wells has an excellent choice of shops, banks and restaurants, but not in the same league as Chislehurst’s. Our town offers excellent rail and road links and there is a good choice of schooling within the area, including the excellent Claremont, St James & St Peter’s and St John’s Schools.  All these factors make the average value of a property in Royal Tunbridge Wells around £413,200.

In the last 12 months, the average value of a property in Chislehurst and Royal Tunbridge Wells has risen in both places by roughly the same amount (Chislehurst £42,200 and Royal Tunbridge Wells £38,800). However, that doesn’t tell the whole story, because average property values are much lower in Royal Tunbridge Wells. As a percentage, values in Chislehurst have increased by a modest 6.9%, but in Royal Tunbridge Wells they have increased by nearly half as much again, (in fact 49% proportionally more) at 10.3%. It shows that Royal Tunbridge Wells is a town that people want to invest in.

By keeping an eye on the local market, I am able to judge if a property is good value to buy for a landlord. I give this advice and opinion at no charge to anyone who asks, be they an existing landlord of ours or indeed another agent. I will also give it to anyone considering becoming a buy to let landlord for the first time. I do not charge for this service, because if I offer you an honest and straight forward opinion, you may consider using me to manage your property. However, I must stress there is no obligation to do so. Feel free to pop your head through our door on Vale Road in Royal Tunbridge Wells to chat about the ups and downs of the property market in Royal Tunbridge Wells.

What has the Help to Buy scheme done to the Royal Tunbridge Wells property market?

The Conservative’s and Liberal Democrats launched Help to Buy eighteen months ago to give a boost to the housing market. The Help to Buy scheme involves the Government guaranteeing up to 15 per cent of a mortgage, acting as an indemnity for the banks and building societies who sign up (so far only three banks have done so). This means lenders can provide mortgages more confidently to borrowers with a 5 per cent deposit. It will apply to all types of properties, first-time buyers, home movers and re-mortgagers.

Quite interestingly, first timer buyers have had access to 95% mortgages since 2010 so I am not sure what it will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Royal Tunbridge Wells continues to have a buoyant property market. Prices are rising, but not at the double digit level that was experienced in the early to mid 2000’s. If the scheme enables those who want to buy, to buy, then that can only be good for everyone in the town.

Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Royal Tunbridge Wells to let out. Carrying out a quick search on one of the price comparison websites, I was able to find in seconds that landlords can get fixed rate buy to let mortgages from as low as 3.65% until the end of 2011. With rental yields in Royal Tunbridge Wells of around 4% to 6% per year and the values increasing by 10.3% in Royal Tunbridge Wells, the overall average yearly return is the region of 14.3% to 16.3% per year.  

However, buying a buy to let property is full of pitfalls. If you have a good tenant, in a good property and a good relationship between tenant and agent, then not much can go wrong, as long as the relationship between the landlord and agent is exceptional. I pride myself on exceptional relationships with my landlords and their continued business speaks for itself.

If you are considering becoming a new buy to let landlord, feel free to pop your head through the door of our agency on the Vale Road in Royal Tunbridge Wells for some advice and opinion on what (or not) to buy. It is true the property market is showing signs of good improvement, but, if you know where to look, and more importantly, what to look for, there are still bargains in Royal Tunbridge Wells to be had.

Royal Tunbridge Wells Property Market – should you be buying?

A number of people have approached me recently, asking about the Royal Tunbridge Wells property market. Earlier in 2014 we had headlines of massive increases in property values in the UK, and then more recently, we have had reports of potential massive crashes. So, should we be worried?

Property values in Royal Tunbridge Wells have risen, on average by 9.7 % in the last 12 months, which sounds impressive, but when I looked at the South East as a whole, prices have risen by 13.2% (although nationally they are only 8.7% higher). However, when you take the perspective of comparing 2014 to the boom years of 1999 to 2003, when property values in Royal Tunbridge Wells increased in 1999 by 11%,  2000 by 17.4% and 11.4% in 2001, 16.6% in 2002 and 17% in 2003, I cannot see why some are concerned about an unsustainable price boom.

Looking at my own findings and speaking to other property professionals in Royal Tunbridge Wells, the issue isn’t house price inflation, but a lack realistically priced properties coming onto the market for sale, a lack of supply. In the whole of May 2014, an impressive 135 properties came on to the market for sale in Royal Tunbridge Wells. In November, only 71 properties came on to the market.

So should you be buying a property in Royal Tunbridge Wells?  Now is a good time to buy, provided you accept prices may fall again in a few years. It depends on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it. Royal Tunbridge Wells first time buyers preparing to take the plunge should bear these factors in mind. The biggest issue must be that buyers ensure they can take the hit of future interest rate rises and therefore, I ask the first time buyers of Royal Tunbridge Wells to make sure you'd be happy in your new home, because you could be stuck there in five years' time.

Landlords tend to buy for the long term, so these short term movements don’t tend to affect them as much. The lack of supply in Royal Tunbridge Wells of new properties coming onto the market indicates people wanting to buy have to move quickly, and don’t have the luxury of a few weeks to decide to view the property. However, my findings show that first time buyers and landlords in Royal Tunbridge Wells aren’t prepared to pay over the odds for a property to secure it. Maybe, just maybe, the memory of the 2008 price crash has given a dose of realism to the optimistic Royal Tunbridge Wells property market?

Why don’t people buy instead of renting in Royal Tunbridge Wells?

Quite often, when talking about the rental market, we talk about the property and the landlords and seem to forget the other party in the equation, the tenant. Without tenants, there is no demand for the rental property. The profile of the Royal Tunbridge Wells tenant has changed and continues to change. Although this is in part due to the credit crunch, job mobility and the raising of deposits, an increased number of people in their twenties are choosing to rent rather than buy and have done so, even when they were in a position when they could have bought a property.

Since the credit crunch, rents have been good value for money for most tenants outside London. Few rents (outside London) have kept pace with inflation as they tend to track wage inflation. In 2008, the average median gross wage according to Office of National Statistics in Royal Tunbridge Wells was £30,817. Latest figures for Royal Tunbridge Wells in 2014 show average salaries in the town had risen to £34,855, an increase of 13.1%. I was reading some research from the Bank of England which suggests with regards to inflation, goods and services that cost £100 in 2008 would cost £119 in 2014, making inflation 19% over those seven years.

Royal Tunbridge Wells tenants are paying less than both wage and goods inflation. Royal Tunbridge Wells rents are in fact still only around 5.4% above the level being achieved in 2008 but the tenants are being paid 13.1% more. That is why we have seen a greater demand for Royal Tunbridge Wells rental properties with more and more people becoming tenants. So renting has since the credit crunch, on average, delivered good value for money for tenants and hence the healthy demand and lack of void periods for most property.

Overall, considering the recent rises in property prices over the last 12 months, we are just 0.3% above the 2007 boom prices in Royal Tunbridge Wells. With reasonable rents, many would-be first time buyers in Royal Tunbridge Wells have been wise to remain in the private rental sector. Rents tend to move in line with wages as opposed to inflation and if something goes wrong with the property, inevitably landlords pick up the bill, so tenants aren’t hit with awful expenditure surprises as a normal homeowner would be. In addition, renting offers better mobility both from a location perspective, but also from a trading up or down perspective in terms of rent commitment which, in this tough job market, could be considered a wise move.

From the landlords point of view, the consequence of this steady / solid market throughout the Royal Tunbridge Wells area, with good tenant demand, decent long term capital growth (as mentioned in last week's article) and average yields between 4 and 7%, with home owners it used to be buy, sell, buy, sell as one rose up the property ladder.. Now it’s buy, hold, buy, hold.

If you would like to discuss my thoughts on the rental markets in Royal Tunbridge Wells, feel free to pop into our offices on Vale Road, or email me on david.rogers@martinco.com

Happy New Year everyone!

Royal Tunbridge Wells Property Market – What has 2015 got install for us?

I had an interesting chat with a landlord who uses another letting agent in the town after he popped into our offices for a coffee whilst his wife was doing some last minute Christmas shopping. We got taking about the Royal Tunbridge Wells market and thought other landlords might be interested.

You see, property values didn’t stop dropping in Royal Tunbridge Wells until June 2012 so after a strong run over the last 30 months, the ever upward drive of house price rises has started to turn with increases now at an almost standstill for the first time since the start of 2013. Now it could be said this easing of the housing market in Royal Tunbridge Wells can be attributed partly to the time of year (last year property values in Royal Tunbridge Wells dropped by 0.1% in November but recovered by 1% in February 2014), it is obvious that estate agents in Royal Tunbridge Wells are wary about the direction of the market as a result of the not as strong demand and fewer house sales.

With the uncertainty of a possible interest rate rise, new mortgage rules, a general election on the horizon and recent warnings of a house price bubble. Although the main indicators suggest that buyers will start to gain the upper hand, especially with the new stamp duty rules announced recently by George Osbourne. However, there are many homeowners who don’t need to sell and won’t bother unless it’s economically beneficial to do so, but most homeowners are homebuyers, so what they loose with one they gain with another.

This is all good news for landlords looking to buy rental property with the changes in stamp duty and later in 2015, the new rules regarding pensions, where you will be able to take money out of your pension pot to invest in property. However, at the same time, I would say don’t just buy any old property in Royal Tunbridge Wells. First time landlords need to be cautious. The doubling of house prices every seven to ten years which has taken place since WW2 doesn’t seem to have been seen since the mid 2000’s. The property market is shifting with more properties being built and restrictions put on mortgage lending, the likelihood of the property market increasing at the same levels as the past are questionable. But investing in property is also about receiving the rent.

On the one hand going for high yielding Royal Tunbridge Wells property to rent out seems an obvious choice, but high yielding property often doesn’t go up in value that well and in some circumstances doesn’t keep up with inflation, meaning in real terms you have a depreciating asset (I spoke about this a few months ago in ‘The Royal Tunbridge Wells Property Blog’ when comparing the Ramslye estate to Culverden, where property values in Ramslye Estate had only risen by 102% in last 13 years yet the property values in the  Culverden housing market had risen by 158%!)).

So surely you should pick a property that has great capital growth then, because of the obvious potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties (in areas such as Calverley Park, the Warwick Park area and Speldhurst) tend to be low meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.

Royal Tunbridge Wells Property Prices?

A number of landlords, who own property in Royal Tunbridge Wells, have made contact with me recently asking for my thoughts on the future of the buy to let market in Royal Tunbridge Wells. In previous articles, we have talked about Royal Tunbridge Wells’s history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values rose by 9.7% (Oct 13 to Oct 14) in Royal Tunbridge Wells. Good news all round, but when you consider property values in the city have previously dropped by 17.8% between February 2008 and April 2009, this is not as good as the media would have you believe.  It should be no great surprise to hear that Royal Tunbridge Wells property values are starting slow up as we head in to the New Year.  Property values in the city were growing at 1.3% a month in the summer months this year, but in October they slowed down considerably.

                   

The reality is we have had a year and a half of decent market conditions in Royal Tunbridge Wells, but now all that pent up demand is starting to fade. The big question moving forward is whether the Royal Tunbridge Wells market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Royal Tunbridge Wells property market.

Looking at the UK as a whole, because we can’t look at Royal Tunbridge Wells in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Royal Tunbridge Wells, long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-

·         “Should I sell my property in Royal Tunbridge Wells, or even buy another?”

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

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

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

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a prosperous 2015.

Is the Royal Tunbridge Wells Property market a runaway train?

Some of my landlords invest for yield, some invest for capital growth (and some for a bit of both). Everyone is different; if you are a landlord in Royal Tunbridge Wells, who invests for capital growth as opposed to yield, it is crucial to look to build in capital growth in a property by getting a property at a discount or by finding a way to add value.

So, how can you get a discount in this property market, with Royal Tunbridge Wells property values alight and property being snapped up over night? Achieving capital growth in Royal Tunbridge Wells is going to be tough over the coming few years isn’t it? Well yes and no. Looking at the headline figures, of the 1,047 properties available for sale today in Royal Tunbridge Wells, 581 of them are sold subject to contract, an impressive 55.4% which is obviously a sign of a runaway Royal Tunbridge Wells property market? Well, no it isn’t. Don’t get me wrong it is a lot better than it was a few years ago, but there are still good property deals to be had.

We asked Rightmove for all of the properties that had come on to the market in the last 28 days (264 to be precise), after one month, how many of those 264 had found buyers .. less than one in five (51 to be precise or 19.3%). Look at the last 56 days (2 months) and of the 501 properties that have come on to the market in Royal Tunbridge Wells, only 179 have a sale agreed on them (or 35.7%) .. the property market is good but it’s not a runaway train, is it?

The main thing is that landlords must take as much advice as possible. They will need to take a long and serious look at any existing properties or new ones to make sure they can achieve capital growth and that this increases in line with inflation.  

We are able to look at the whole of the Royal Tunbridge Wells property market.  There are good estate agents and bad ones, but one thing is always the same,  they are all paid by a vendor to sell you a property, not paid by you to help you buy. Therefore, when they show you that bargain, don’t get pressured into buying a property until you have a good feel for the market. We have many landlords who send me a web link of any Royal Tunbridge Wells properties they are interested in and I always give my honest opinion. (It might not be what you want to hear, but it will always what you need to hear!).

If you would like to discuss my thoughts on the rental markets Royal Tunbridge Wells, feel free to pop into our offices on Vale Road or email me on david.rogers@martinco.com

Sherwood – the place to buy a buy to let?

One of the final chunks of census data has recently been released by the Government, and for those of you who like to look at RTW housing market, it is a treasure trove of information. Information is so important when making decisions on what (or not) to buy when investing in property. A few weeks ago, I was discussing the roads around Rustall and Showfield’s Road. Today, I want to look at the area around the Sherwood area on the North Eastern edge of Royal Tunbridge Wells. The census data allows anyone to look at the data for housing estates or areas, but even better down to individual roads. Such information allows us to weigh up potential hotspots in the rental market and show potential landlords where there could be an opportunity.

There are, in the Sherwood area of Royal Tunbridge Wells, 7,249 people living in 3,001 properties. It is the home ownership percentages that really got me interested, as it is this information, tied in with our intimate knowledge of the market, where we can match tenant demand to an under supply of rental properties.  Of those 3,001 households in Sherwood, 23.4% own their property without a mortgage (compared to the 32% Royal Tunbridge Wells average) and additional 29% households own their property with a mortgage (again the Royal Tunbridge Wells average is only slightly higher at 33.7% and that includes all the posh villages!).

However, the thing that surprised me was the low level of private rented property. Normally, when you have low percentages of home ownership, the renting is high. However, this is quite the opposite in the Sherwood area where 8.2% (or be exact 245 households) are in the private rented sector (compared with the Royal Tunbridge Wells average of 15.7%). The reason being is that the Sherwood area has a high proportion of social housing, in fact 36.7% or 1,101 households are under social housing ownership and as a large proportion of the existing home owners bought their properties from the Council it does not give much room for the private rented sector in Sherwood. With such excellent demand from homeowners and tenants, this could be the right area to purchase your next buy to let investment, as average yields in the Sherwood area are in the region of 5%-6% and Sherwood’s values mostly performed well over the medium to long term.

Therefore, if you are considering buying a property for investment in the near future, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our office's on Vale Road for a chat or email me direct on david.rogers@martinco.com

What type of property in Royal Tunbridge Wells sells the best?

Knowing how saleable a property is half the battle when deciding what (or not) to buy for your next property investment. Why?  Well because one day, you may need to sell that property. If you go into the purchase with open eyes, you know most of the risks and can barter the price accordingly if you have to. Bearing this in mind, last week, a couple from East Peckham popped into our offices to ask about investing in property. Their concern was if we have another property slump (and we will because that is what has happened to the British property market ever since the 1950’s), if they did need to sell, what type of property would be easier to sell. Now everything sells, even during a slump, but I did some research and followed up their query – I was actually quite surprised with the results.

A good guide to judge the saleability of property is the number of properties for sale, compared to the numbers that are sold, subject to contract. Now I carried out this comparison last week, so the numbers will be marginally different today, but of the 30,606 households in Royal Tunbridge Wells there are 1,046 properties on the market for sale. Of those 1,046 properties, 494 properties are fully available on the open market waiting for a buyer and 552 have buyers and are sold subject to contract. That means 52.7% of property on the market has a buyer in Royal Tunbridge Wells (in Tonbridge only 49.1% properties on the market have a buyer and SevenOak’s properties have 51.1%).

However, delve deeper, and in Royal Tunbridge Wells today, 54.7% of flats on the market have a buyer and great news for terraced house property owners, as 60.7% have buyers.  Semi detached houses fair even better, with 121 of the 195 on the market now having buyers (making 62%). The properties that appear to be sticking though are bungalows at a comparatively lower 47.3% and detached houses at 41.3%. 

I am always giving advice to my existing and new landlords in Royal Tunbridge Wells on what to buy (or not as the case may be).  Having this detail of information at my finger tips, allows me to spot trends in the local market, which then enables to me to give the very best advice to my clients. I don't charge for that advice as I have plenty of opportunity to earn money by finding the best tenants for my landlords in the years to come on the investments I have advised on. 

Ashenden Walk, Tunbridge Wells - Buy to let deal of the week

I am so liking this lovely 2 bed semi on the market with Andrews for £250,000 .. lets well, sells well, half decent yield. On this street they have risen in value by nearly 20% in 2 years.

Dont hang about .. nice inside ..look at the pictures (via the Zoopla link)

http://www.zoopla.co.uk/for-sale/details/35051883

Showfields property market outperforms Rustall by 42%

I was talking to a couple last week, who are considering becoming landlords for the first time after they had come into some money knowing the return they would get investing in the Bank. They have lived in Royal Tunbridge Wells all of their lives and wanted to buy something in a street or area that they know well.  They were looking for advice upon what they should buy.

Their budget was in the £200,00 region, so I initially looked at terraced houses in Rustall. The average value of a two bed property in the Rustall area is £201,600 (although the price range is quite wide and they can go as low as £180,000 bringing them just into our price range but as high £230,000).  The two beds rent on average for £853 per month, giving us an average yield of 5.07%. 

Then in true “Escape to the Country” tv style I showed them a “mystery property” which was a one bedroomed flat in the Hunter’s Court development on Showfields Road on the Southern edge of Royal Tunbridge Wells.  Built in the 1960’s with looks that only a mother could love these one bedroom apartments sell well and let well achieving £595 per month rental and selling for on average £98,700 giving a yield of 7.23% a year. The yield on Showfields is proportionally 42.6% more than Rustall’s and at this price they could buy two and achieve a gross rent in the region of £1,200 per month.

However, to judge a rental investment, you must consider the capital growth as well as the yield. Since 2001, the average Showfields flat has risen by 50.1%, whilst terraced houses in Rustall have risen by 174% - quite a difference. Ultimately, we found both places to be a good investment depending on your own situation, but as you can see, Showfields Road/Hunter’s Court does offer better yields, but at the expense of capital growth which Rustall’s terraced houses  offers.  


If you are a landlord, new or old, we’re certainly more than happy for you to pop in and see us at our offices on Vale Road for a chat or email me direct on david.rogers@martinco.com

7.6% Yield in Royal Tunbridge Wells

Here is today's best BuyToLet deal in RTWells. 

Freeman Foreman have this Studio apartment for sale at Offers between £90,000 to £100,000.

She will rent with your eyes closed for £575 per month, giving a yield of 7.6% if you buy her at tthe bottom end of the scale.

Contact Freeman Foreman for more details .. Zoopla link here .. 

http://www.zoopla.co.uk/for-sale/details/17869828

Royal Tunbridge Wells vs Tonbridge .. the tale of two very different property markets

I was talking to one of my landlords from Bidborough the other week, when we were looking over a few properties that he was considering buying  in Royal Tunbridge Wells and Tonbridge. As I know towns well, I was able to discuss the two towns in depth with him. We started to notice an interesting pattern in the house prices between the two. Royal Tunbridge Wells has always been a slightly more expensive town to buy in comparison to Tonbridge but depending on what type of property you buy, there are some fascinating differences.

A few weeks ago, we said that the average value of a property in Tonbridge was £395,000, compared to Royal Tunbridge Wells’s of £399,900 (making Royal Tunbridge Wells 1.2% higher). However, when you look deeper, things become quite interesting between the two towns. Terraced houses in Royal Tunbridge Wells are 17% higher than Tonbridge’s (£304,200 to £260,000), detached properties are even higher, 19.1% in Royal Tunbridge Wells (£701,500 compared to £588,600 in Tonbridge). Whilst semi detached houses are only 13.5% higher in Royal Tunbridge Wells (£373,900 to Tonbridge’s £329,33) but flats are only 0.1% cheaper in Royal Tunbridge Wells than Tonbridge’s  (a flat in Tonbridge is £237,300 compared to the average flat in Royal Tunbridge Wells at £237,100).

So, why the big difference when looking at the different types of properties and their relevant prices in each town? Well, after investigating, it transpires that in Royal Tunbridge Wells, there are 118.75% proportionally more flats than Tonbridge (35% of properties in Royal Tunbridge Wells are flats compared to only 16% in Tonbridge). However, on the other side of the coin, Tonbridge has proportionally nearly three quarters more semi detached properties (in fact, Tonbridge must be the land of semis as 44% of property in the town are semi detached houses, compared to our 26% in Royal Tunbridge Wells).  However, both towns have similar numbers of detached and terraced houses.

The average value of a detached house, semi-detached house and terraced house in Royal Tunbridge Wells is considerably more than our neighbour in Tonbridge.  However, because Tonbridge has a higher proportion of the more expensive houses (ie detached and semi-detached) this means the gap, when looking at the overall average is much closer at 1.2%. These differing housing provisions in the two towns just goes to show that you need to know your marketplace and decide which is the right area for your money. If you are an existing landlord or one who is thinking of become one in Royal Tunbridge Wells, don’t hesitate to pop by our offices on Vale Road in Royal Tunbridge Wells or send me an email to david.rogers@martinco.com