Good morning readers, I trust that you are all looking forward to what seems to this bank holiday weekend. In my opinion the past week has been a pretty positive one on the whole and, whilst we do have some way to go still, it does feel like we are beginning to see a dim light at the end of the tunnel.
I thought I would give a little update on my personal renovation project, which has now really started to take shape. Since my last update, I have completed two new bathrooms, installed a new water main and fully replaced the heating with a megaflow system.
We got a little held up because of the party wall issue but are now cracking on with the rest of the works. I did a Facebook Live earlier in the week and you can see how things have really started taking shape here.
In addition, with continually high levels of tenant enquiries, the Home Share team have continued working hard to fill rooms and look after our tenants. I wanted to share that I am super proud of the team, who filled the majority of six rooms in a beautiful house share in Gillingham on its first day on the market! I did a short video on that here.
Q1 House price growth data
As you may be aware, this week saw the ONS House Price Index for March go live and this is the first peek into what effect the COVID-19 pandemic has had to house prices. I was quite surprised to see that prices have increased more in March this year than they did last year!
It would be interesting to hear your thoughts and I have outlined a couple of headlines:
UK average house prices increased by 2.1% over the year to March 2020, up 2.0% compared against February 2020 and up 1.5% against March 2019
This indicates we were on track for another year of strong house price performance before the COVID-19 crisis. It also demonstrates that historically house prices do not drop immediately after a recession, instead prices take a quarter or two to fully correct as with the rest of the market.
I feel as the government support schemes come to an end, this will result in a higher number of insolvencies, having a knock-on effect on the housing market. How much remains to be seen? I’d be interested to read your predictions. It’s interesting to note that across the rest of the UK the same trend was followed with house prices increasing in similar amounts.
London’s average house prices increased by 4.7% over the year to March 2020; this is the largest 12-month growth London has seen since December 2016
What a time for London to face an all time high 12 month growth since 2016, to be smacked by Coronavirus in the face. Undoubtedly the London market has been hit hard by the precipitous drop in economic activity, so I eagerly await to hear the updated numbers as they come out.
Medway House Prices Since the Covid-19 Crisis
When you drill down to look at the ONS data for Medway, the news seems quite good for property investors as average house prices increased by 1.2% in the year to March compared to 0.7% last year.
The news appears to be even more positive for Medway property investors when you look at the monthly data as March saw the biggest monthly rise for the past two years at 4.2%. This compares to a monthly rise of -3.1% for February, however I’m not sure if this rise is an anomaly or caused by there being less transactions due to the COVID-19 pandemic so will need to monitor this over the coming months.
If this monthly statistic is correct, it would mean that, for example, a terraced house in Nelson Road, Gillingham, that sells for an average of £170,000 could now be sold at £177,650 compared to around £165,000 the previous month! I would be interested to hear if this is your experience.
Unfortunately, the index has been suspended indefinitely from the April index which will be released on 17th June. When it resumes, it will certainly give an interesting insight into how the market has fared throughout the pandemic and be invaluable for property investors!
I think that this early data is positive news we are, however, only part way through the crisis so will need to continue monitoring over the coming months to see the wider impact. I would be interested to hear your thoughts on what the impact may be over the next six months!
I will be publishing a more in-depth article looking at the local Medway property statistics over the coming weeks as I know a lot of people have found previous similar articles helpful. Stay safe and as usual, I am more than happy to provide any advice and guidance where you need it.
I welcome your views, thoughts, and experiences during this turbulent time.