Hello Medway Property News Readers,
Something I always emphasise when speaking with landlords and investors is that investing in property should be viewed as a long-term situation and, by this, I generally mean decades rather than years!
This message is driven home strongly during this time of uncertainty as, whilst we have seen record house price increases, we have also seen the impact of COVID-19 on the housing market in terms of unpaid rents and evictions put on hold during the series of bans.
However, regardless of these challenges, we property investors are a resilient bunch and, whilst times are definitely challenging right now, this difficult period will not last forever.
This line of thought made me reflect on how the market has fared over the past 20 years and, in particular, the Medway property market in comparison to large city centres such as London.
The rise in home working over the past year has helped fuel an increase in demand for property within Medway and, since the announcement of the stamp duty holiday in July 2020, the Land Registry reports a 5% rise (£11,624) in Medway property prices when compared to just 3% (£12,920) for London.
I have reviewed some of the data comparing Medway to the London housing market and discovered that although Medway has pretty much achieved a similar rolling annual average of price increases over the past 20 years, it has smashed the London market by 15% since 2015!
I have tabled the rolling annual percentage growth for both London & Medway using data from the Land Registry below and this serves to illustrate not only how Medway growth has been particularly strong since 2016 but has also shown a steep increase over the past 12 months.
When we drill down further into the data, we see that Medway property prices have increased by 287% since 2000 and 38% since 2015. The returns generated in capital appreciation for investors really are significant.
|Data since 2000||London||Medway|
|House price growth||280% or £365,655 From £130,411 – £496,066||287% or £365,655 From £65,704 – £254,559|
|Data since 2015||London||Medway|
|House price growth||23% or £93,219 From £402,847 – £496,066||38% or £70,427 From £184,132 – £254,559|
This data helps to demonstrate the growing strength and potential the Medway Towns have as investment continues and they increasingly become an attractive commuter hub and also how further investment in the area drives job creation.
When looking at investments in general, although it is always important to have a diverse range of investments such as a pension, stocks etc, this data certainly serves to demonstrate the strength of investing in property!
Furthermore, when you compare it with the London market, Medway has a much smaller barrier to entry, with a 25% deposit being £63,639 compared to a whopping £124,016 for London!
Because of the house price difference, you also tend to get a better yield within Medway at around 5.5% for a single let compared to around 3% for London and about 12% for a five-bedroom HMO in Medway compared to just under 10% for the same in London. It will certainly be interesting to see where it is in the next 20 years!
I trust that you found this article helpful and I will keep you updated as more information becomes available. If you have any questions, you are welcome to get in touch with me via LinkedIn where I will be happy to help where I can.