House prices are tumbling by up to 7.2% nationally but Medway has only dropped by 5.9%

This week I have been preparing a rent-to-rent agreement for a landlord who will have an above-market rent guaranteed. Including handling of all minor maintenance, bills and council tax, this is part of a Bullfinch Properties offering that involves social housing for asylum seekers. If you want more information about this or know anyone who may be interested, we are paying cash referral fees, so get in touch.

Of course house prices are always a hot topic of conversation with my landlords and there’s been more than a few news headlines in the past few weeks about house prices tumbling. Property Industry Eye reported “biggest monthly fall for almost eight years” but how relevant is that to property in Medway? Do the stats sound the same for our region? And if not, what does that mean?

The first thing to note is that the Halifax House Price Index Report which was the source of data for the article I read, is a nationwide report and therefore there is a massive generalisation of the current market position. Which I accept, but having read the article, I wanted to understand and share with you how that translates to the concentrated geographical area of Medway. So I dug a little more and found that some of the messages that came from this report sound quite different when focussed entirely on Medway.

Home sales fell  

“A 7.2% drop in UK home sales resulted in the lowest number of sales since May 2016.”

The UK House Price Index separates data by local authority. As a result, analysis of Medway data indicates that as of January 2018, home sales totalled 294. If we compare this with the same time frame from the Halifax report, in May 2016 sales in Medway were at 312, meaning there has be a drop of 5.9% from that point. So overall, Medway is a full 1.3% healthier than the headline figures for the whole country.

Housing market activity softens

“Bank of England industry-wide figures show that the number of mortgages approved to finance house purchases fell for the second consecutive month.”

Mortgaged purchases in Medway dropped from 264 in December to 224 in January, so yes, it appears there is a downward trend in mortgage funded purchases. But with changes in stamp duty tax, tighter lending regulations and the inevitable worry over interest rates following the brexit vote, it isn’t that much of a surprise.

Supply remains tight

“Stock of homes available for sale edged up in March; however, they remain close to record low levels.”

We already know there is a house shortage in our region and I can confirm that the data also indicates that property sales in Medway have dropped. When comparing sales in January this year with those in January 2016, there has been around a 13% decrease. I think this reflects low consumer confidence in the market and that’s something that is touched upon in several national press reports.

House prices tumble

“House prices tumbled by 3.1% between March and April, after a 1.6% rise in March.”

March is the latest valuation available for Medway and at that point the average property price was £242,697. What I can tell you is that property prices in Medway have remained fairly steady since August of last year, with only a  0.32% variation during those 8 months. There was a sharp rise just before that but since, the market has remained steady. Quite interesting when you consider the conjecture around the impact of Brexit.

To give you a view of overall house price trends in Medway, between March 2016 and 2017, property prices grew by around 11%. From 2017 in to 2018, growth is recorded at a much lower rate of 4.5%. So yes, year-on-year growth of house price value in Medway has slowed, but it’s still present and on an upward trend.

Medway’s position

I think overall the messages are clear, there is a reduction in value and movement in the market. However I still believe the Medway is in a uniquely strong position. The continued gentrification of many areas of Medway and the overwhelming number of developments in the area in answer to Medway’s ongoing housing shortage, I feel, puts our market in an incredibly strong position. The continued drive for innovation in commercial industry in Kent also ensures that the labour market will continue to improve. With unemployment falling and wages rising, this can only put property investors in a strong position when considering adding Medway properties to their portfolios.

I’d be really interested to hear if you think the same. Please do contact me by email at hasan@bullfinchproperties.co.uk, on LinkedIn or Facebook and share your views with me. And if you’re not already subscribed but have enjoyed this piece of Medway Property News, be sure to subscribe to our newsletter to receive regular updates and property alerts.

 

*All data sourced from Land Registry – UK house price index.