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In my last article I wrote about the plight of the Medway 20-something’s often referred to by the press as Generation Rent. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

 

However, my real concern for Medway homeowners and Medway landlords alike, as I discussed a couple of months ago, is for our mature members of the population of Medway. In that previous article, I stated that the current OAP’s (65+ yrs in age) in Medway were sitting on £1.51bn of residential property. However, I didn’t talk in depth about the Baby Boomers, the 50yr to 64yr old population and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger Generation Renters.

 

In Medway, there are 5,749 households whose owners are aged between 50 and 64 years old and about to pay their mortgage off. That property is worth, in today’s prices, £1.38bn. There are an additional 4,769 mortgage free Medway households, owned by the same age sector, worth around £1.14bn in today’s prices, meaning...

Medway’s Baby Boomers OAPs are sittingon £4.03bn worth of property!

 

These Medway Baby Boomers and OAP’s are sitting on 16,808 Medway properties and many of them feel trapped in their homes, and hence I have dubbed them Generation Trapped. 

 

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are under-occupied (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggests that in Britain it is estimated that only one in ten older people downsize while, in the USA for example, one in five do so. 

 

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to de-clutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

 

Helping mature Medway homeowners to downsize at the right time will also enable younger Medway people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these last time buyers.

 

 

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Medway and the Planning Department should play their part, as should landlords and property investors to ensure Medway’s Generation Trapped can find suitable property locally, close to friends, family and facilities. 

Are you thinking of downsizing? Perhaps you are struggling to get your foot on the first rung of the property ladder? I am happy to offer free and totally impartial advice. Please use this link to This email address is being protected from spambots. You need JavaScript enabled to view it.

 

You can also sign my for my free and insightful monthly Medway property market report by simply CLICKING HERE

 

Thanks for reading.

 

Who remembers the good ol’ days of the 1970’s and 1980’s? With such highlights lowlights as 24% inflation, 17% interest rates, a 3 day working week, 13% unemployment and power cuts, but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

 

 

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Medway (and UK) housing market. Predominantly, the 20-something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it simply too challenging to get on to the Medway property ladder.

 

However, I would say there has been something else at play other than the issue of raising a deposit - having sufficient income and rising property prices in Medway. Whilst these are important factors and barriers to homeownership, I also believe there has been a generational change in attitudes towards home ownership in Medway (and in fact the rest of the Country).

 

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. An almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%. It seems that many no-longer equate home ownership to success and believe renting to be better suited to their lifestyle. 

 

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Medway population choose to be tenants as it better suits their plans and lifestyle. Local Government in Medway (including the planners – especially the planners), land owners and landlords need an adaptable residential property sector that allows the diverse choices of these Kent-based 20 and 30 year olds to be met.

 

This means, if we applied the same percentages to the current 14,687 Medway tenants in their 5,657 private rental properties, 5,640 tenants have no plans to ever buy a property – good news for the landlords of those 2,172 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

 

 

So does that mean the other third will be buying in Medway in the next 12 months?

 

 

 

Some will, but most won’t. In fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, the number of people renting will increase, not drop. Yes, many tenants might hope to buy ,but the reality is different for the reasons set out above. The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Medway, we will in fact need an additional 2,424 private rental properties over the next eight years (or 303 a year), meaning the number of private rented properties in Medway is projected to rise to an eye watering 8,081 households.

 

Do you own a property in Medway and would like some impartial advice about the future of the housing market? Simply sign up to my Medway property newsletter and once a month you will receive a free copy, full of useful facts and figures, just like this very article. You can sign up, for FREE. by clicking HERE

 

You can also value your home, for free and instantly, without even having to speak to one of those pesky estate agents! It takes under 58 seconds for a current sales and rental value. The link is HERE

 

As ever, thanks for reading.

 

Spencer Fortag

Rochester’s private renting is set to hit 5,761 households by 2021 but can we blame 55 to 70-year-old Rochester citizens for the current housing crisis in the town?

 

Also known as the ‘Baby Boomer Generation’, these Rochester people were born after the end of the Second World War. The country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime. 

 

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments; they have emerged as a successful and prosperous generation. 

 

Yet, some have suggested these Rochester baby boomers have made (and continue to make) too much money to the detriment of their children, creating a generational economic imbalance, where mature people benefit from house-price growth while their children are forced either to pay massive rents or take on large mortgages.

 

Between 2001 and today, average earnings rose by 65% but average Rochester house prices rose by 156.01%

 

The issue of housing is particularly acute with the generation called the Millennials; young people born between the mid 1980’s and the late 1990’s. These 18 to 30 year old’s, moulded by the computer and internet revolution, are finding that as they enter early adult life, it is very hard to buy a property. Landlords are buying up all the property to rent out back to them at exorbitant rents. It is no wonder that these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

 

Like all things in life, we must look to the past, to appreciate where we are now.

 

In my opinion, the three biggest influencing factors on the Rochester (and UK) property market in the later half of the 20th century were:

 

the mass building of Council Housing in the 1950’s and 60’s;

the Tory’s decision to sell most of those Council Houses off in the 1980’s;

and 15% interest rates in the early 1990’s which resulted in many houses being repossessed. 

 

It was, I believe, these major factors that underpinned the housing crisis we have today in Rochester.

 

In addition, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This cct saw a relaxation on the Bank’s lending criteria’s to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) should be able to buy a home. Unsurprisingly, the UK followed suit in the early 2000’s, as banks and building societies relaxed their lending criteria and brought to the market 100% mortgages. Even Northern Rock started lending every man and his dog 125% mortgages!

 

So when we roll the clock forward to today, we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays. No wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

 

Conversely, you have unregulated buy-to-let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you. As I write Virgin Money are offering 2.99% fixed for 3 years – this is so cheap!

 

 

In part two of this article, I will continue and show you some very interesting findings on why young people aren’t buying property anymore. And it’s not why you might think….

In the mean time why not find out how much your Medway property is worth? Using this ONLINE VALUATION you can find out a current rental and sales value, in under 60 seconds! It is FREE and INSTANT.

Thanks for reading and I hope to see you again soon.

Spencer Fortag

Fixing the UK's housing crisis is simple!

An Englishman’s home is his castle, as Maggie Thatcher lauded, everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

 

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Medway buy to let properties as an investment. Medway first time buyers were in competition with Medway landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One ) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Medway landlords also fanning the flames of the Medway housing crisis bonfire?

 

I believe that the landlords of the 4,086 Medway rental properties are not exploitive and are in fact, making many positive contributions to the Medway economy and the people of Medway. Like I have said before, Medway (and the rest of the UK) is not building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

 

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running even lower at 4.1 to 4.3 per thousand.

 

It doesn’t sound a lot of difference, so let us look at what this means for Medway.

 

For Medway to meet its obligation on the building of new homes, Medway would need to build 222 households each year. Yet, we are missing that figure by around 92 households a year.

 

For the Government to buy the land and build those additional 92 households, it would need to spend £26,614,041 a year in Medway alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year.  The country simply hasn’t got that sort of money.

 

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Medway families or Medway people who need council housing because the local authority hasn’t got enough properties to go around. 

 

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent. 

 

 

So only you, the reader, can decide if buy to let is immoral, but first let me ask this question - if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about...

Thank you for continuing to read my thoughts on the Medway property market. If you have any questions or comments or would like me to discuss a specific topic, I would love to hear from you. Email me This email address is being protected from spambots. You need JavaScript enabled to view it.

Well, it doesn’t seem like two minutes ago that it was Christmas. Now Chrimbo is a distant memory and Easter is fast approaching! One cold December morning, after arranging the office’s Christmas cards I thought I would nip out for a quick festive coffee and mince pie at my favourite local coffee shop, Rochester Coffee CoI met an old client of mine in the coffee shop and we got talking about the Medway property market. I had just completed my research for my next blog article and I would now like to share with you some of that conversation.

 

He asked me what my thoughts were about the last half of the year in regard to the Medway property market and if there were any great buy-to-let deals around. In reply I said that, in my view, shrugging off the uncertainty of the initial post Brexit vote, I have seen an increase in supply and a rise in the number of properties selling at the lower to middle end of the market, meaning both first time buyers and buy to let landlords have been returning in the last few months – proof the market is beginning to bounce back.

 

As my regular readers will know, I am ALL about the numbers, so let’s take a look at those:

 

In November 2016, according to the three main property portals (Rightmove, Zoopla and OnTheMarket) there were a total of 135 properties for sale in Gillingham (within 1 mile of the centre of Gillingham to be exact). In November 2015, there were only 122 properties for sale, a rise of 11%.

 

Then, I split the available properties down into bedrooms (note things like building plots and part commercial/part residential won’t be in these figures, so the numbers below wont exactly match up to those in the above paragraph).

 

 

# Properties on the market in Nov 2015

# Properties on the market in Nov 2016

Per cent Change

5+ Bedrooms

12

4

-67%

4 Bedrooms

25

26

+4%

3 Bedrooms

34

51

+50%

2 Bedrooms

36

44

+22%

1 Bedroom

14

9

-36%

 

Then, when I looked at the type of properties it got even more interesting:

 

Type of Property

# Properties on the market in Nov 2015

# Properties on the market in Nov 2016

Per cent Change

Detached

34443

43

0%

Semi

14

27

+93%

Terraced

12

22

+83%

Flat

29

18

-38%

 

As the number of Gillingham properties put up for sale has risen by 11%, homeowners have become more realistic about how much their homes are worth. This increase in homeowners wanting to sell suggests there is renewed confidence in the Medway property market and there are also signs that people are being more realistic about pricing their property.

 

 

As you can see, there has been a significant uplift in terraced and semi-detached properties, which means there is greater choice for first time buyers and landlords. So with a combination of realistic pricing and more properties on the market – both first time buyers and landlords alike might be able to pick up a few bargains.

Did you know that you can now get an FREE and INSTANT property valuation, without even having to speak to one of those pesky estate agents? Simply enter some details HERE and in less than sixty seconds you will get a current rental and sales value.

I can be reached via email, This email address is being protected from spambots. You need JavaScript enabled to view it. with any questions or comments. Until next time, have a great property week!

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