Cautious Optimism in the Royal Tunbridge Wells Property Market

As the British and Tunbridge Wells property market navigates the ongoing economic turmoil, many Tunbridge Wells homeowners and landlords may feel uncertain about the future.

However, up-to-date data suggests that the 2023 property crash predicted by the many newspapers and the usual clickbait doom-mongers in the lead-up to Christmas on social media, may not be as bad as initially thought, and there are reasons to be cautiously optimistic.

According to property website Rightmove, the average asking price of a home for sale in the UK rose by just £14 in February.

While this might sound like cause for concern, asking prices remaining flat rather than falling could be seen as a positive sign for the year ahead. Remember that they are only what people are asking (and not necessarily achieving).

So, what exactly is happening in the Tunbridge Wells property market?

Well, it all starts with realistic pricing.

Thankfully, most Tunbridge Wells sellers are heeding their estate agents' advice and being more realistic on price, helping maintain market stability.

If you are realistic with pricing, the property should sell.

The time it takes to get a property to sale agreed upon has increased nationally from 21 days in the summer of 2022 to around 50 days in Q1 2023.

Additionally, despite the turbulent economic conditions, buyer demand is rising. Rightmove also reported in the national press that the number of people contacting estate agents has increased by 11% in the last two weeks compared to the same period in 2019.

The number of sales agreed upon has also rebounded.

Nationally, from 1st January to the 19th February 2023,

134,886 properties had been sold subject to contract in the UK.

Not a good figure when I compare it with the same year-to-date sale agreed figures from the last couple of years.

2022 - 173,607 properties sold stc

2021 - 193,607 properties sold stc

But the last couple of years have been extraordinary for the UK property market and should be taken with a pinch of salt in some respect. We must compare 2023 with more normal years, like 2017/18/19/20. This tells a different story.

2020 - 151,694 properties sold stc

2019 - 143,504 properties sold stc

2018 - 138,665 properties sold stc

2017 - 134,503 properties sold stc

The picture looks similar when we look closer to home in Tunbridge Wells.

In Tunbridge Wells (TN1/2/3/4), in the first seven weeks up to the 19th February 2022, 289 properties sold subject to contract.

This year, from the exact 1st January to the 19th February timeline, 207 properties have sold stc, which is lower, yet in the same ballpark as 2017, 2018 and 2019

Yet it is all terrific selling a house (subject to contract); it is still only sold subject to contract, meaning the sale could fall through (as it is not legally binding).

As an agent who likes to delve deeper into statistics, I considered the 'net property sales'. (Net Property Sales being the gross number of properties sold that week less the sale fall throughs in the same week).

In the three months leading up to the Mini-Budget in September 2022, there was an average of 17,801 ‘net property sales’ per week in the UK. That dropped by 34.7% two months after the Autumn Mini-Budget to an average of 11,624 ‘net property sales’ per week in the UK.

In the last five weeks, that has rebounded to 17,050

‘net property sales’ per week.

And when you consider the average for the same five weeks in 2017/18/19 was 18,330 'net property sales' per week, we are close to what many considered a normal market.

Improving market conditions has been supported by a reduction in average mortgage rates. Homebuyers taking out a five-year fixed-rate mortgage with a 15% deposit can expect a rate of 4.39% (correct at the time of writing with HSBC), down from an average of 6.1% in early October. This reduction in mortgage rates may have contributed to the recent increase in buyer demand.

These positive signs in the market have led some experts to suggest that a ‘softer landing’ for the UK property market than initially expected could be on the horizon.

The combination of sellers being more realistic on price and an improving picture of the number of agreed-upon sales suggests a more positive outlook for the property market.

I advise Tunbridge Wells homeowners coming to market in the upcoming spring season to use their agent's expertise and get the price right the first time to find the right buyer more quickly. If you do wish to chance a higher asking price, only do so for no more than two weeks. If you haven't sold by then, take the agent's advice and realign your asking price.

169 Tunbridge Wells homeowners have realigned their

asking prices since 1st January 2023.

While it's true that some first-time buyers may still be priced out of their original plans and may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets, there is still cause for optimism.

There is still a considerable demand for buying property in Tunbridge Wells - renting is becoming increasingly unattractive for many people as rents are increasing by double digits percentages.

It is important to remember that purchasing a property always involves a trade-off between what one desires and what is affordable, regardless of the market conditions. For example, while a four-bed detached house may be out of reach, a larger and older three-bed semi-detached property may be a more realistic option (and probably have similar square footage).

Tunbridge Wells landlords looking to invest in buy-to-let homes – now may be a good time, as rising rents could offer attractive returns.

Of the 277 properties let in Tunbridge Wells since the 1st January 2023, the average rent achieved has been £1,422 per month. This is a significant drop in the number of properties let in the same first seven weeks of the years of 2017/18/19 and a massive increase in rents.

Finally, the newspapers will be full of news about house price drops in the coming months. All the indexes report house sales where the sale agreed price was offered nine to eleven months ago and completed (i.e., monies and keys handed over) three or four months ago. This peculiar time lag means the house price data is nearly a year old before publication.

So, if you decide to buy a home on that information, you are using old property data. In late 2021/early 2022, there were 30+ viewings per property, and people paid way over the asking price to secure a property. Now there is more 'normality' in the Tunbridge Wells housing market; today's prices are also more normal (at or slightly below the realistic asking price). So yes, the house price indexes will show a reduction in house prices. The newspapers will say house prices are crashing, yet when it is explained I have above ... whilst it is not a newspaper clickbait title - it is the truth and it’s more of a return to more 'normal house prices'.

So, prepare for clickbait newspaper headlines of a house price crash (because ‘bad news sells newspapers’ as the saying goes).

Also, prepare for the doom-mongers to quote the bad news of the earnings-to-house prices ratio at one of its highest levels ever.

Earnings-to-house price ratios are a poor measurement of health in the UK property market. Instead, I believe Nationwide's measure of first-time buyer mortgage payments as a percentage of take-home pay is better (as it is actual pound notes out of actual pay packets).

The Nationwide measure of first-time buyer mortgage payments as a percentage of take-home pay has grown for first-time buyers from 30.4% in Q4 2021 to 39.4% in Q4 2022 … a

massive rise! Yet mortgage interest rates have dropped since then (so that percentage will fall). Also, to give some context, let us not forget that percentage in 1989 was 48.4%.

Ultimately, Tunbridge Wells homeowners and landlords should decide, based on their unique circumstances, rather than being swayed by newspaper headlines or general market trends. Anyone uncertain about the property market's future should contact me for my opinion, advice and guidance.

50% of Royal Tunbridge Wells house sellers in 2022 had only been in their old home on average 5 years and 24 weeks

The share of Brits moving each year has been declining since the late 1980s (when at one stage, people moved every eight years), yet since the pandemic's beginning, something has appeared to upset that trend.

Newspaper stories and social media posts painted a picture of homeowners moving from the city centres to its suburbs, from the suburbs to the towns and countryside around the UK. Areas like the Cotswolds and coastal towns around the country got swamped by the race for space, significantly affecting housing markets (including Tunbridge Wells).

But how many Brits moved? And how long had they been in their homes before they moved?

In Great Britain, there are 28.3 million households, of which 19.3 million are owner-occupied and 4.43m owned by private buy-to-let landlords.

There is £7,035 trillion of residential property in private hands.

Eight years before the initial lockdown in 2020, an average of 79,646 properties were sold each month in the UK, meaning just under a million UK households move home annually.

Therefore, in those 8 years, the average British homeowner moved every 20 years and 4 months.

So, what uplift was there in people moving home after the first lockdown in 2020?

In 2021 and early 2022, an average of 102,021 people moved home monthly, taking the average move time to once every 16 years. So even though there was an uplift in people moving home, it was nothing like the 1980s.

It shows that in the 21 st Century, once you have succeeded in buying a property you can call home, there isn't much enthusiasm to move again.

What is happening in the Tunbridge Wells property market now?

We love our homes in Tunbridge Wells, but most of us (including myself) still want to better our lives with a larger house, better area etc., which typically requires us to climb up the Tunbridge Wells property ladder.

Yet, with Tunbridge Wells house prices having risen by 432.4% in the last 25 years, the cost of going up the next rung on the Tunbridge Wells property ladder has become prohibitive.

Everyone remembers back to the 1980s, when we had an upbeat booming property market as a backdrop, and British homeowners moved home every eight years; so now, with the average move time in the mid to late teens (in years), this equates to each homeowner only moving around three to four times in their adult lifetime.

Or could it be something else?

We all know the phrase, “lies, damn lies and statistics.

The home moving statistics above hide some great details about the British property market.

When British homeowners get into their 50s, 60s and beyond, their inclination to move home drops like the proverbial stone.

The average time a homeowner without a mortgage moves home is 24 years and 27 weeks (and just over 7 out of 10 outright homeowners, i.e. without a mortgage, are 65 or older).

Homeowners with a mortgage tend to be younger to middle-aged.

Homeowners with a mortgage move on average every 10 years and 11 weeks.

So, whilst I cannot determine which house seller has a mortgage and which doesn't, I can look at how quickly people move home in Tunbridge Wells.

Therefore, I have taken a look at the last 50 property sales in Tunbridge Wells and found some interesting results.

The average Tunbridge Wells homeowner had only been in
their home on average 13 years and 18 weeks before they sold.

Yet the devil is in the detail.

There appears to be a two-speed Tunbridge Wells property market …

50% of Tunbridge Wells house sellers in 2022 had
only been in their old home on average 5 years and 24 weeks.

Then, let's split the findings into quarters.

• Top 25% fastest Tunbridge Wells homeowners in 2022 moved on average after 3 years & 26 weeks
• The following 25% of fastest Tunbridge Wells homeowners in 2022 moved on average after 7 years & 16 weeks
• The next 25% of Tunbridge Wells homeowners in 2022 moved on average after 16 years & 0 weeks
• Whilst the 25% slowest Tunbridge Wells homeowners in 2022 moved on average after 26 years & 3 weeks

When looking at the properties that fall into the slower time bands (i.e., the ones that don’t move/sell so often), they tend to be the larger properties where the homeowners have lived often for 30 or 40 years.

Maybe, the one lesson from these statistics is that once homeowners get into their 60’s and 70’s, their tendency and inclination to move home declines significantly.

This means the homes on the lower rungs of the Tunbridge Wells property ladder are selling

quickly (as younger aged homeowners occupy them) ... yet once Tunbridge Wells people

tend to get older, their tendency to move diminishes.

This obstructs the younger generation of Tunbridge Wells homeowners from wanting to buy

the bigger Tunbridge Wells properties these mature Tunbridge Wells homeowners live in.

What is holding the older generation back from selling and downsizing to free up family

homes for families that desperately need them? Some will be apathy, and some will be

wanting to hold on to the homes they brought their families up in, yet the bottom line is …

as a country, we must reconsider how we can encourage (not force) older homeowners to sell their large homes to release them to the younger families that desperately need them.

Some recent articles I have written suggested tax breaks, yet the government doesn't have the money to give massive tax breaks.

One thing I do know we, as a country, have seen (and will continue to see) a lot of demographic change together with an increasingly ageing population, so it’s not just about how many households we build but whether we are constructing the right kind of homes for the older generation?

Thought-provoking times are ahead for the Tunbridge Wells property market!

If you have a Tunbridge Wells property to sell in the coming months or years and want to know how this and other factors will affect you and your property ... without obligation, don't hesitate to call me.

Royal Tunbridge Wells Property Market Update:February 2023

• With the Bank of England raising interest rates and inflation high, what is happening in the Tunbridge Wells property market
• Are properties selling in Tunbridge Wells? And if so, what is selling?
• What will happen to the value of your Tunbridge Wells home?
• Read the article to find out what is happening to the Tunbridge Wells property market.

Now that February is here, the Tunbridge Wells (and British) property market is full of mixed messages.

 

Whilst the Bank of England increased the base rate nine times in 2022, meaning they are now at 3.5% (3% higher than 12 months ago), mortgage rates are now dropping. 

 

The local property market rocketed over the last few years because of the imbalance of the number of properties for sale versus the demand, with many more people looking to move home than there were properties available. 

 

Now, as we are over the first month of 2023, we are experiencing a steadier housing market, where homebuyers have the time and opportunity to ensure they find the right home for them. 

 

The days of 50 viewers per property on the first weekend of marketing, frenzied buyers outbidding each other by increasing their offers by tens of thousands of pounds over the asking price has become the exception and not the norm.

 

I often get asked my thoughts on the Tunbridge Wells property market (hence these blog articles) and at this time of year, I get asked my forecast for the year ahead.

 

The one big thing I have noticed is the imbalance of what is coming on the market for sale versus what is selling.

 

For example, 38.2% of properties that came on the market nationally in November and December 2022 had an asking price of £250,000 or less, yet 45.6% of the properties sold subject to contract since 1^st January 2023 have been £250,000 or less. 

 

That doesn't sound like a lot, yet it makes a massive difference to the property market.  

 

However, it’s very easy to look at national averages, regional averages and, of course, local averages. Yet the property market is just one market nationally, as there isn't just one property market.

 

However, the same pattern is seen in the higher-priced properties. These higher-priced properties are selling more slowly than the lower-priced properties. Therefore, the need for those larger properties to be more realistic in price is paramount to stand out from the crowd, especially with the next point.

 

Evidence suggests there is a growth of buyers, who are looking to find a home before putting theirs onto the market. This was unthinkable last year, yet as the property market returns to normality, this will be seen more and more.

 

What are my thoughts?

 

Firstly, the time scale of how long it will take to sell a Tunbridge Wells home.

 

I expect to see the time it takes to sell a Tunbridge Wells home increase from 55 days in 2022 to a more 'normal' housing market of around 70 days.

Secondly, the imbalance of the property market. 

 

A greater number of larger homes are coming on the market because (as mentioned recently in a previous blog post) of the higher number of mature homeowners looking to downsize. This is because these larger homes have become much more expensive to heat, and as many of the occupants are on fixed incomes with their pensions, they are downsizing to cut costs.

 

Thirdly, that brings me to talk about energy efficiency. 

 

Many buyers have started to ask about a property's Energy Performance Certificate (EPC) rating. I recommend to homeowners considering moving in the spring or summer to have an EPC done on their property now, as there may be points that could easily be rectified and improved from one EPC rating band to another. 

 

This would mean you will get a lot more interest and a better price for your property. If you need any help or guidance in organising an EPC on your property (even if you are not selling for six/twelve months), do not hesitate to me give me a call.

 

So, what is happening in the property market in terms of new properties (aka new listings) and what is selling?

 

91 properties have sold (STC) in the Tunbridge Wells area since 1^st January 2023.

(Tunbridge Wells being TN1/2/3/4).

However, it's essential to look at what is selling, and the most active price range is the £400k to £500k range, where 18 properties have been sold subject to contract (representing 19.7% of sales).

Looking at what is coming onto the market in the same time frame … 

145 properties have come onto the market in the Tunbridge Wells area since 1^st January 2023.

Interestingly, the price range with the most listings is the £400k to £500k range. 

 

This means Tunbridge Wells is bucking the national trend (mentioned above) where nationally, the lower to middle property market is where the sales are, but the properties coming onto the market are slightly higher in price, yet it’s the same in Tunbridge Wells.

 

Any homeowners with properties in price ranges that aren’t selling so well need to be ‘on point’ to stand out from the crowd regarding their marketing, be spot on regarding their pricing (compared to the growing competition of other larger homes for sale) and now more than ever, their EPC rating (especially if they are on the cusp between two EPC bands).

 

Before I conclude, you might wonder why I have not mentioned house prices.

 

Well, what will happen to Tunbridge Wells house prices in 2023 is something I am not sure of.

 

(Yes, I know that level of frankness is strange coming from an estate/letting agent). 

 

I know the prices being achieved for homes in the spring of 2022 (when everyone was out bidding each other) are not being achieved today. It all depends how you look at it. 

 

Are local house prices dropping or are they just returning to normal? I would say the latter. 

 

However, looking at house prices as a ‘bellwether’ for the health of the property market has flaws.  

 

Many economists and property market commentators believe transaction numbers (the number of properties sold) give a more accurate and truthful indicator of the property market's health than just house values alone. 

 

The reason is three-fold. 

 

Firstly, most people also buy a home when they sell their own, so if property values drop by 10% or rise by 10% on the one you are selling, it will do the same on the one you are buying - meaning to judge the health of a property market on house prices is very one dimensional.  

 

Secondly, as most people move up market when they do move home, if the price of the one they’re selling might not be as much as they would've achieved in 2022 (if they drop), the price that they will pay on the one they want to buy will be lower. Thus, it will cost them less to move upmarket!

 

E.g. Last year, your Tunbridge Wells home was worth £400,000, and the one you wanted to buy would have been £750,000. Let’s say local house prices did drop 10% in 2023 (which I don’t know if they will); your home would be only worth £360,000. Yet the one you want to buy would now be worth £675,000. So last year, it would have cost £350k to move, but if house prices drop 10%, the move would cost £315k, saving you £35,000.

 

Third and finally, moving home is a human thing. Property habitually delivers a robust emotional connection with homeowners - a connection that few would attribute to their other investments like their stock market investments or building society savings passbook.  

 

Moving home could be described as a human journey, moving from one chapter of one’s life to another. 

 

Therefore, when people do move home, it shows they are moving forward in their lives, which gives a great indicator of the property market's health.

 

It’s going to be an interesting year for the 2023

Tunbridge Wells property market.

 

My opinion. Do what is suitable for you, your family and your finances. 

 

Ignore the newspapers and look at the facts in hand and if you want a frank chat about the Tunbridge Wells property market, irrespective of whether you want to sell or not, call me. I might not tell you what you want to hear, but I will tell you what you need to hear.

Thatcher’s Dream Alive as Homeownership in Royal Tunbridge Wells Increases

​

In her first conference speech as the Tory's new leader in 1975, the grocer’s daughter from Grantham, Margaret Thatcher, asserted her conviction in a ‘property-owning democracy’. 

 

Although Thatcher didn't conceive the saying – (that credit belonged to Conservative MP Noel Skelton in 1923), it encapsulated what she thought Britain should be.

 

Through prudence, saving and hard work, she believed that everyday British families should be able to purchase their own homes. Thus, giving them security, self-esteem and independence and freeing them from the nanny state of local authority landlords.

 

Although that idea was a Labour idea initially in the mid-1970s, Margaret Thatcher introduced legislation (Right-To-Buy) in 1980 to allow local authority tenants to buy their own council homes at significant discounts. In the 1980s, homeownership boomed (although it had been on the increase for the previous two decades), and she led the country in an economy with which house buying became a national passion.

 

Between 1981 and 1990, home ownership went up from 11.88m to 15.47m.

 

The other lesser-known fact of the Right-to-Buy legislation in 1980 was it stopped local authorities from building new council houses. 

 

Fundamental to her idea was that government (central or local), which had built between 30% and 45% of all homes in the 1950s, 60s and 70s, should stop providing homes and let the market provide them.

 

The proportion of homes owned rose from 55.4% in 1980 to 65.7% during Thatcher's reign as PM.

 

A few days ago, the housing element of the 2021 Census was released, and it has shown the proportion of home ownership in Britain had fallen to its lowest level since 1985. 

 

The proportion of households owned in the country fell from 64.1% to 62.5% between 2011 and 2021, the lowest level forthe past 37 years, when the figure was 61.6%.

 

In the meantime, the proportion of privately rented households has surged to its highest since the late 1960s, with 20.4% of households renting from a private buy-to-let landlord. 

 

This means the proportion of British households in private rented accommodation has more than doubled in the past two decades, from the 9.5% recorded in the 2001 census.

 

So, let’s look at the local stats for the Tunbridge Wells councilarea.

 

The percentage of households owned in Tunbridge Wells has increased from 65.7%in 2011 to 66.2% in 2021

(bucking the national trend).

 

Let’s look at the actual number of households.

 

The number of owned households in Tunbridge Wells has grown from 30,999 in 2011 to 31,914 in 2021, a rise of 3.0%.

 

Next, looking at the private rental sector, the number of privately rented accommodation has grown as well!

 

The number of privately rented households in Tunbridge Wells has grown from 8,651 in 2011 to 9,281 in 2021, a rise of 7.3%.

 

 

 

Over the coming weeks and months, I intend to drill down further into these stats nationally and locally.

 

Even though homeownership nationally has increased in terms of pure numbers, the proportion of homeowners with a mortgage has dropped.

 

Just some headlines to whet your appetite.

 

As I said above, 64.1% of householders in Britain owned their own home in 2021 (of which 30.8% owned their home outright and 33.3% with a mortgage).

 

In 2021, of the 62.5% of homeowner households, those without a mortgage has increased to 32.8%, and those with a mortgage has dropped to 29.7%.

 

So, has Thatcher's dream been smashed?

 

Of course, nationally, home ownership is at the lowest level in many decades due to several factors, including the late 1980s and 2008 housing crash, negative equity, the credit crunch and increased mortgage regulation. 

 

Yet, at the same time, as every single local authority in Britainhas seen an increase in the number and proportion of private renters over the past 20 years, the entrepreneurial property-owning spirit has moved into the ownership of private buy-to-let property. The market has undoubtedly filled the housing gap that the councils and local authorities left in the 1980s.

 

These are interesting times, and I shall share more insights in the coming weeks and months. 

 

Let me know your thoughts on the information above.

What Will Happen to the Royal Tunbridge Wells Property Market in 2023?

​

The autumn of 2022 saw economic and political instability with the resignation of Boris Johnson as Prime Minister and the ill-fated Liz Truss 44-day premiership. Now as we go into 2023, the economic and political turmoil has subdued, offering a greater feeling of stability in money markets. 

 So, on the back of that, what is the expectation for the British (and Tunbridge Wells) housing market as we go into the new year?

The biggest issue is inflation. Low steady inflation of around 2% a year is good for the economy, yet the high levels we are experiencing now isn’t. It affects the spending power of the pound in your pocket, and it alters the way people spend their money (including buying and selling property).

So where has this inflation come from?

Many blame it on inflated gas prices because of the Ukraine issue(however, it is believed by most economists only around 4% of the current 10.7% inflation figure is because of the fuel crisis). 

UK inflation was already running at 6.2% when the Russian tanks rolled into Ukraine in February 2022 which created that energy price shock. Therefore, where has the rest of the inflation come from?

The catalyst of inflation started in 2020 with the Bank of England’s Quantitative Easing (QE). This pumped £450m new money into the economy at a time when the future looked bleak. The problem was, people had nothing to spend that money on, so when things started to get going after the lockdowns, there was a mis-match of too much demand for goods (as people had that money) and a lack of goods and services (because there wasn’t enough supply of those goods and services with the supply chain issues).

This all meant prices went up (i.e., inflation). The catalyst of this inflation was the Bank of England printed too much money in 2020 with QE and the supply chain issues (all easy to say with hindsight!).

Too much inflation is bad for the economy and therefore, ultimately the property market.

Two things will reduce inflation. 

One is a recession and the other is increased interest rates.

Many find it fascinating that the Bank of England were talking the UK economy into a shallow recession in the autumn. Yet there was method in their madness. It was because they didn’t want to rely solely on the second method of increasing interest rates.

Better for the economy to have a shallow mild recession and interest rates rising to say 4.5% by the middle of 2023 to reduce inflation, than placing the whole job of reducing inflation on interest rates.

If that had been the case, interest rates would need to rise to say 7% (or more), causing the economy (and property market) to stall ... and thus create a subsequent deep and long recession.

Therefore, with the Bank of England having recently increased itsbase rate to 3.5%, with more interest rate rises to come in 2023, what does this and the mild recession mean for the Tunbridge Wells property market?

A recession will increase unemployment levels, which have been comparatively low in the last few years. Depending on the type of roles/jobs that are made redundant, will determine the effect on the property market. Until that happens, we won’t know.

Everyone is suffering from higher gas, electric and shopping bills, yet with interest rates rising, this will increase the pressure on household budgets. Higher interest rates mean higher mortgage payments if the homeowner/landlord is on a variable rate mortgage(17 out of 20 homeowners with a mortgage are on a fixed rate).

It’s these two factors of recession and interest rates that will place negative pressure on Tunbridge Wells house prices. 

Yet let us not forget this pressure is coming off the back of two of the strongest years on record in terms of house prices and transaction levels. 

 Tunbridge Wells house prices have experienced 29.4% price growth since the pandemic started in March 2020.

 This is interesting when compared to the UK average, where average house prices have risen by 27.4% or £44,700 since March 2020.

Before I tackle the issue of house prices in 2023, I would like to look at the number of transactions. 

To many the number of properties selling is irrelevant, yet I believe it is as important, if not more important, than house prices. I believe the best way to judge the health of the local property market is the number of people moving home (i.e.housing transactions).

You could ask yourself why Tunbridge Wells people should be more concerned about the number of property transactions and not the change in Tunbridge Wells property values.

Many economists believe the number of property transactions is a better judge of the health and vitality of a housing market. The higher the number of people moving home is better for the whole economy than a smaller number of property transactions, whilst the same can’t be said for higher house prices.

Transactions levels have been quite high in the last couple of years.

1,191 households per year have moved home in Tunbridge Wells since lockdown, compared to the long-term 27-year average of 811 per year.

Looking at the stats coming through in the last couple of months, maybe we will settle for a figure somewhere between the two figures above, yet nowhere near the sub-650 annual figure of homeowners moving in the Credit Crunch years in the 2008/9/10 time frame.

Finally, let’s look at Tunbridge Wells house prices in 2023.

A good place to start to judge house prices is how many reductions are taking place on the properties that are already on the market.

In the last 3 years, the average number of price reductions for the properties for sale in the Tunbridge Wells area (TN1/2/3/4) has been 73reductions per month.  

In October there were 109 price reductions and in November 113 reductions.

Homeowners are being more realistic with their pricing and the price that one will achieve for their Tunbridge Wells home today and the rest of 2023 will be lower than one would have achieved in the spring of 2022.

Yet, as most Tunbridge Wells people buy another property when they sell (and most of the time move up market) the price you would have had to pay on the next purchase would have been even more.

Yes, the price of Tunbridge Wells property will be lower in 2023 by between 5% to 10%, yet these are only levels that were being achieved in the spring of 2022 – and nobody was complaining about those!

Final thoughts. 

Several economic commentators are preaching doom and gloom for the property market in 2023, yet things are very different than the Credit Crunch years of 2008/9.

The property market crashed in 2008/9 mainly because the banks and building societies stopped lending money i.e., credit (that is why it was called the Credit Crunch). 

There are two large differences this time round.

The first is the introduction of Mortgage Market Review mortgage stress testing instigated in 2014.

Homebuyers taking out a mortgage must have undergone a stress test on interest rates to obtain a mortgage since 2014. These stress tests are a safeguard to ensure that if their household income continued to be the same, the homeowner could afford higher mortgage rates. 

The second is the banks and building societies have much higher cash reserves. Higher reserves will ensure they can continue to lend money and so more mortgages are available, although at a slightly higher interest rate than a year ago. 

With mortgage rates falling back, with some very attractive fixed-rate deals knocking on the door of 5%, this is a development that may continue into 2023 as banks and building societies obtain cheaper funding sources and then compete for business by driving down the price of mortgages - which would only be good news for the Tunbridge Wells property market. 

These are my thoughts - what are yours?