THE days of rocketing house prices in Tunbridge Wells could soon be coming to an end, after a leading estate agent said it expects 11 per cent will be wiped off local property prices by the end of next year.
The predictions, made by Savills, came as the Bank of England (BoE) introduced the largest rise in interest rates in a generation last week, hiking mortgage costs for millions.
An increase of 0.75 per cent was introduced on Thursday (November 3), the biggest rise since 1989, which now sees the UK base interest rate at 3 per cent.
On average, it will add around £3,000 per year to mortgage bills for those households that are set to renew their fixed-rate and tracker mortgages, the BoE said. Less than a year ago the base rate was just 0.1 per cent.
Savills said that rising interest rates and uncertainty in the housing market will see property prices plummet.
Next year Savills expects at least 10 per cent to be wiped off the value of the average property in England and Wales in 2023.
Last year, the Times reported that house prices in Tunbridge Wells had overtaken Sevenoaks to become the highest in Kent.
And last month we reported on how the value of homes in the borough had risen on average by £38,000 over the last 12 months, but that now looks set to change.
London and the South East of England are expected to see even larger house price falls with Savills predicting homes in the region are set for a 11 per cent drop in value by the end of next year.
According to Rightmove, the average property in Tunbridge Wells fetches £510,588, while Zoopla has the average price even higher at £518,385.
If the Savills predictions come true, the average home in Tunbridge Wells could fall in value by as much as £57,000, seeing the average house price in the area fall to around £460,000.
Savills said despite the fall in prices across the South East, the region is expected to bounce back ‘from 2027 onwards’.
Lucian Cook, Savills head of residential research, said: “A new Prime Minister and fiscal policy U-turns appear to have reduced some of the pressure on interest rates, but affordability will still come under real pressure as the effect of higher interest rates feeds into buyers’ budgets.
“That, coupled with the significant cost-of-living pressures, means we expect to see prices fall by as much as 10 per cent next year during a period of much-reduced housing market activity.”
However, local estate agents say the housing market in Tunbridge Wells ‘positive’ and that currently some properties may be overvalued.
Shaun Kidd, director (and co-founder) Jack Charles Estate Agents told the Times: “When a market stabilises, some people who have over-valued their properties won’t be able to be as ‘punchy’ with their numbers.
“When you come to sell it, it’s not a real loss because it was never a real gain.”
He continued: “If we talk about Tunbridge Wells property prices, there are so many positive factors.
“There is still huge demand coming out of London. There are changes in ways of working – people are able to commute two days a week. Tunbridge Wells sees a lot of that. We are still seeing young families coming out of London.”
He continued that despite rising interest rates, mortgage deals can still be had.
“People have got used to paying more for their car than for their mortgage. They will get used to rates at a higher level than they have been used to,” he said.
“Clients are receiving offers with some lenders which are high but not catastrophically high. Those rates are rates from existing lenders to clients with a good credit history are at a level which is potentially still affordable.
“Even first-time buyers are managing to find deals out there still, though they may have to put down a bigger deposit.”
For the latest property news see our 16-page property spread only in next week’s Times – out Wednesday, November 16.