Hello readers,
I’m sure you will agree with me that it’s a challenging season for property investors. With looming rental reforms, possible EPC changes and rising costs for both mortgage and maintenance you could be forgiven for thinking it’s ‘game over’.
I have been spending time looking at the local property market over the past week and thought I’d share some interesting statistics I have put together with you. Hopefully these will help inform your decisions as an investor.
The first thing that I looked at was house prices by breaking down house price growth by postcode sector.
You will see how the graph below shows that over the past year, ME1 1 (Rochester town centre & esplanade) has performed the best and ME7 1 (Lower Gillingham) the worst. Taking a five-year approach, we see that ME4 3 (Chatham Dockside) has performed the best and ME4 4 (Brompton, Chatham) has performed the worst.
Take a look at the table below and I will certainly be interested to hear your thoughts. I will explain what I think are some of the reasons for the differences below.
One and five year property value growth, Rochester, Chatham and Gillingham
| Sector | Area | 1 Year | 5 Year |
| ME1 1 | Rochester town centre & esplanade | 9.2% | -0.6% |
| ME1 2 | Rochester East | -2.0% | 17.4% |
| ME1 3 | Borstal/Wouldham | -4.6% | 9.5% |
| ME4 3 | Chatham Dockside | -3.1% | 26.1% |
| ME4 4 | Brompton, Chatham | -12.3% | -1.3% |
| ME4 5 | Central Chatham | 4.3% | 18.2% |
| ME4 6 | Central Chatham | 0.6% | 14.2% |
| ME5 0 | Central Chatham | 1.2% | 24.5% |
| ME5 7 | Capstone, Chatham | 6.1% | 23.3% |
| ME5 8 | Lordswood, Chatham | -0.3% | 22.5% |
| ME5 9 | Rochester Airport, Rochester/Chatham | 2.6% | 17.4% |
| ME7 1 | Lower Gillingham | -22.0% | 10.3% |
| ME7 2 | Gillingham Stadium | 1.3% | 22.5% |
| ME7 4 | Upper Gillingham | 2.5% | 15.9% |
| ME7 5 | Upper Gillingham | -2.9% | 21.0% |
| ME8 6 | Twydall | -4.7% | 17.3% |
Reading this data, you might be surprised to see some of the one-year figures and spot something of a pattern as a lot of the rental areas have dipped into negative growth over the past 12 months. ME1 2, for example is where James Street Rochester is, ME4 4 is the Luton Road area. ME7 1 which covers lower Gillingham was particularly affected with a 22% drop in the past 12 months.
Before this rings alarm bells, it’s important to remember the current political climate and my suspicion is that these drops in prices are largely due to an increase in properties coming onto market due to landlords selling up (or being more picky with purchases following the stamp duty change) and a rebalancing after the excess growth following the pandemic. It’s as simple as that in my opinion.
This creates an excellent opportunity for those looking to expand and you will see how over a five-year period growth is largely positive. This increase in available properties within some excellent rental areas means that those looking to grow their portfolio could benefit from some excellent deals.
Not only this, but landlords who choose to take a long-term view and stick with their goals will continue to benefit from increased rents as tenant demand continues to outstrip supply.
Foe example, I know that ME4 and ME5 in Chatham for single lets has excellent rental demand and strong rental rates, with ME7 in Gillingham being a great location particularly for HMO demand with yields at around 8 – 12%. Whilst these are a few hotspots, Medway in general is an excellent location!
What’s my personal opinion on this data? I see it as an opportunity and hopefully the postcode sectors that are somewhat down on the past 12 months could prove fruitful to you as an investor also.
Again, it’s important to remember how investing in property is a long-term strategy, proven to be excellent at growing wealth over decades. It’s not something you can choose to assess on a one (or even five) year basis and this isn’t likely to change any time soon.
I hope you find this useful and this is the first of many posts where I will look into the local statistics. If you have something that you want me to research, or if you have any thoughts on this, I’d be interested to hear them! The best way to reach me is by emailing hasan@home-share.co.uk.
Hasan