Investors Are Flocking From London To Medway And The Full Rewards Are Yet To Be Realised

Hello Medway investors,

I have some good news for you! The Medway property market is hot and growing… not only this but with semi-detached and terraced house prices having increased by an average of 10% over the past 12 months, investors who purchased when prices were low and held have achieved a significant level of appreciation!

Let’s compare this to London… well, what can I say… London property prices have increased by a measly 2.2% and the last time London prices hit a 10% increase was back in July 2016 (where, comparatively, Medway prices increased 17.5%!).

Over the past five years, the price of a terraced house in Medway has increased by a staggering 20% compared to London’s meagre 5.8%. Well… It looks like Medway trumps London yet again!

So, rental demand is high… property prices are up… there’s significant development taking place and investors are continuing to abandon London for better yields elsewhere. In April, Medway was tagged to be the fastest-moving property market in Kent indicating that it is incredibly attractive to investors & homeowners alike!

If we look locally, prices do vary from town to town, with Chatham having the lowest terraced house prices but, to a degree, being the least desirable in terms of area (however still with brilliant rental demand):

  • Chatham: £239,059
  • Gillingham: £251,020
  • Rochester: £264,856

I would not be surprised if a big driving factor behind these large price increases is how London investors, who are likely to have access to more cash, have outbid more local investors and homeowners. This is certainly the case with some investors I have been speaking with and I know it certainly was in neighbouring Canterbury!

Price Increases Differ By Street Across Medway

What is interesting to see is how prices and growth differ across the Medway Towns. The largest jump in prices I’ve been able to find is James Street, Gillingham where prices shot up b 19%!

StreetTerraced House PricePercentage Increase According To Rightmove
Luton Road, Chatham, Kent, ME4£168,8898%
Nelson Road, Gillingham, Kent, ME7£262,0007%
James Street, Gillingham, Kent, ME7£151,25019%
Canterbury Street, Gillingham, Kent, ME7£186,5006%
Corporation Road, Gillingham, Kent, ME7£187,0003%

As an experienced local agent, I regularly talk investors through the best areas for them to invest in considering not only house prices but tenant demand, demographics and the area in general. This is a key point to get right when looking at the micro-market within a town.

The Rewards Are Yet To Be Realised

Ok, so what do I mean by this? If we consider how investors tend to benefit from property growth through appreciation, it tends to only be at the point of either selling or remortgaging that funds are made available.

Whilst I completely acknowledge that some landlords will have chosen to sell and cash in on the increased prices (albeit, hitting the lowest percentage since 2018 at 25%), if we consider how mortgage valuations tend to be a couple of months behind then investors will only truly reap the cash benefits further down the lines.

The savvy investor will acknowledge that a buy and hold strategy is proven to perform well over several years, so the price increase over the past year will come as a bonus!

In addition to this, I certainly don’t expect that the rental market will cool off any time soon. Demand is higher than ever, and this means that as agents, we can quickly source tenants. However, for landlords, it also means that they are able to be choosier about the tenants they pick (which is good for the landlord but can make things tricky for some tenants).

What do you think?

As we are rapidly screeching towards the end of 2021, I would be keen to hear what your thoughts are on the past 18 months. Have they been positive for you overall, have you managed to benefit from the increase in prices or have they been a struggle causing you to think twice about investing?

I’d love to hear your thoughts!

Hasan

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