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Looking at the newspapers between Christmas and New Year, it seemed that this year’s sport in the column inches was to predict the future of the British housing market. So to go along with that these are my thoughts on the Medway property market.
With the average 5-year fixed rate mortgage at 1.98% (down from 3.47% in 2014) and 2-year fixed rate at 1.47% (down from 2.37% in 2014), mortgage interest rates offered by lenders are at an all-time low (even with the slight increase on the Bank of England base rate a few months ago). Added to this, there has been a low unemployment rate of 5% in Medway, which has contributed to maintain a decent level demand for property in Medway in 2017 (interestingly – an impressive 1,264 properties were sold just in Rochester alone in the last 12 months), whilst finally, the number of properties for sale in the area has remained limited, thus providing support for Medway house prices, meaning …
 
Medway Property Values are 6.8% higher than a year ago
 
However, moving into 2018, there will be greater pressures on people’s incomes as inflation starts to eat into real wage packet growth, which will wield a snowballing strain on consumer confidence. Interestingly though, information from the website Rightmove suggested over a third of property it had on its books in October and November had their asking prices reduced, the highest percentage of asking price reductions in the same time frame, over five years. Still, a lot of that could have been house-sellers being overly optimistic with their initial pricing.
 
In terms of what will happen to Medway property values in the next 12 months, a lot will be contingent on the type of Brexit we have and the impact on the whole of the UK economy. A lot of people will talk about the Central London property market in the coming year, and if the banking and finance sectors are negatively affected with a poor Brexit deal, then the London market is likely to see more of an impact.
 
Nevertheless, the bottom line is Medway homeowners and Medway landlords should be aware of what happens in the rollercoaster housing market of Central London, but not panic if prices do drop suddenly there in 2018. Over the last 8 years, the Central London property market has been in a world of its own (Central London house prices have grown by 89.6% in those last 8 years, whilst in Medway, they have only risen by 62.8%). So we might see a heavy correction in the Capital, whilst more locally, something a little more subdued.  
 
Hindsight is always better than foresight and predicting anything economic is all well and good when you know what is around the corner. At least we have the Brexit divorce settlement sorted and, as the UK economy and the UK housing market are intertwined, it all depends on how we deal as a Country with the Brexit issue. However, we have been through the global financial crisis reasonably intact ... I am sure we can get through this together as well?
 
Oh, and house prices in Medway over the next 12 months? I believe they will end up between 0.6% lower and 1% higher, although it will probably be a bumpy ride to get to those sorts of figures.
 

If you would like to read more articles on my thoughts on the Medway property Market – please visit the Medway Property Market Blog

 
I was recently reading a report by the Home website which suggested that hordes of landlords are selling their buy-to-let investments due to increasing burdens on them in the buy-to-let market. Their findings suggest the number of new properties that came onto the market nationally (for sale) jumped by 11% across the UK as a result.
Those increasing burdens include new tax rules coming in over the next 3 to 4 years and the announcement that all self-managing landlords (i.e. landlords that don’t use a letting agent to look after their buy-to-let property) will soon need to register with a compulsory redress scheme to resolve tenant arguments and disputes; as Westminster wants to heighten standards in the Private Rented Sector. 
 
Interestingly I was chatting with a self-managed landlord from Priestfields, when I was out socially over the festive period, who didn’t realise the other recent legislations that have hit the Private Rented sector, including the ‘Right to Rent’ regulations which came in to operation last year. Landlords have to certify their tenants have the legal right to live in the UK. This includes checking and taking copies of their tenant’s passport or visa before the tenancy is signed. Of course, if you use a letting agent to manage your property, they will usually sort this for you (as they will with the redress scheme when that is implemented).
 
If you are a self-managed landlord though, the consequences are severe because if you let a property to a tenant who is living in the UK illegally, you will be fined up to £3,000. That same Priestfields landlord popped into my offices in the New Year, and I checked all his paperwork and ensured he was on the right side of the law going forward – and I offer the same to any landlord in the Rochester area if you want me to cast my eye over your buy to let matters (and at no cost – ok just bring in some chocolates for the girls in the office!)
 
But what of all these extra properties being dumped onto the market in Rochester? When I looked at the records the number of properties on the market in Rochester now, as opposed to a year ago, the numbers tell an interesting story …
 
 
1st Jan 2017
1st Jan 2018
 
Detached
119
148
24%
Semi
180
257
43%
Terraced
205
272
33%
Flat
113
181
60%
Plots +
Other
42
32
-24%
Total
659
890
35%
 
 


 
Overall, Rochester doesn’t match the national trend, with the number of properties on the market actually rising by 35% in the last year.  It was particularly interesting to see the number of flats increase by 60%, yet the number of detached on the market only rise by 24%.
 
However, speaking with my team and other property professionals in the town, the majority of that movement in the number of properties and the types of properties on the market isn’t down to landlords dumping their properties on the market. The whole property market has changed in the last 12 months, with the majority of the change in the number and type of properties for sale due to the owner-occupier market, not landlords (a subject I will write about soon in my Medway Property Market blog later this Spring?). You see, for the last ten years, each month there has always been a small number of Rochester landlords who have been releasing their monies from their Rochester buy to let properties - as is the nature of all investments!
 
Nationally, the number of rental properties coming on to the market to rent fell by 16% in Q4 2017 compared to Q4 2016 .. but that isn’t because there are 16% less rental properties to rent – it’s because tenants are staying in their rental properties longer meaning less are coming on the market to be RE-LET.
 


Nevertheless, some Rochester landlords will want to release the equity held in their Rochester buy to let properties in 2018. All I suggest is that you speak with your letting agent first, as putting a rental property on the open market often spooks the tenants to hand in their notice days after you put it on the market (because they don’t like the uncertainty and also believe they will become homeless!). This means you have an empty property, costing you money with no rent coming in.  However, some letting agents who specialise in portfolio management have select lists of landlords that will buy with sitting tenants in. If you have a portfolio in the Rochester area and are considering selling some or all of them – drop me a line as I might have a portfolio landlord for you (with the peace of mind that you won’t have any rental voids). 

One place for more information is my Medway Property Market blog. If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Medway property market together with regular postings on what I consider the best buy to let deals in Medway, then it is well worth reading. You can also email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

If you are in the area feel free to pop into the office which is based at Station Road, Strood, Kent, ME2 4WQ

Don’t forget to visit the links below to view back dated deals and Medway Property News. 

Blog – http://www.medwaypropertyblog.com/

Facebook – https://www.facebook.com/DocksideP/

LinkedIn– https://www.linkedin.com/in/spencer-fortag-medway/

Website – http://www.docksidekent.com/

It’s now been a good 12/18 months since annual rental price inflation in Medway peaked at 3.4%. Since then we have seen increasingly more humble rent increases. In fact, in certain parts of the Medway rental market over the autumn, the rental market saw some slight falls in rents. So, could this be the earliest indication that the trend of high rent increases seen over the last few years, may now be starting to buck that trend?
Well, possibly in the short term, but in the coming few years, it is my opinion Medway rents will regain their upward trend and continue to increase as demand for Medway rental property will outstrip supply, and this is why.
The only counterbalance to that improved rental growth would be to meaningfully increase rental stock (i.e. the number of rental properties in Medway). However, because of the Government’s new taxes on landlords being introduced between 2017 and 2021, that means buy-to-let has (and will) be less attractive in the short term for certain types of landlords (meaning less new properties will be bought to let out).
Interestingly, countless market experts assumed at the start of 2017, that the number of rental properties would in fact drop throughout the year. The assumption being as the new tax rules for landlords started to kick in, landlords looked to kick their tenants out, sell up and invest their capital elsewhere. (Although ironically that would lower supply of rental properties, decreasing the supply, meaning rents would increase again!).
Anecdotal evidence suggests, confirmed by my discussions with fellow property, accountancy and banking professionals in Medway, that Medway landlords are (instead of selling up on masse), actually either (1) re-mortgaging their Medway buy-to-let properties instead or (2) converting their rental portfolios into limited companies to side step the new taxation rules.
The sentiment of many Medway landlords is that property has always weathered the many stock market crashes and runs in the last 50 years. There is something inheritably understandable about bricks and mortar – compared to the voodoo magic of the stock market and other exotic investment vehicles like debentures and crypto-currency (e.g. BitCoin). 
Remarkably, there is some good news for tenants, as Tory’s recently published the draft Tenants’ Fee Bill, which is designed to prohibit the charging of tenants lettings fees on set up of the tenancy. However, looking at evidence in Scotland, I expect rents to rise to compensate landlords, thus hammering faithful tenants looking for long-term tenancy agreements the hardest. This growth will be on top of any usual organic rent growth.  It really is swings and roundabouts!
So, what does this all mean for landlords and tenants in Medway and particularly, Gillingham for example? In my considered opinion,
Rents in Gillingham over the next 5 years will rise by 9.2%, taking the average rent for a Gillingham property from £937 per month to £1,023 per month.
To put all that into perspective though, rents in Gillingham over the last 12 years have risen by 21.5%. In fact, that rise won’t be a straight-line growth either, because I have to take into account the national and local Gillingham economy, demand and supply of rental property, interest rates, Brexit and other external factors. Please see the graph for my projections

In the past, making money from Medway buy-to-let property was as easy as falling off a log. But with these new tax rules, new rental regulations and the overall changing dynamics of the Medway property market, as a Medway landlord, you are going to need work smarter and have every piece of information, advice and opinion to hand on the Medway, Regional and National property market’s, to enable you to continue to make money.

One place for that information is the Medway Property Market blogIf you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Medway Property Market together with regular postings on what I consider the best buy to let deals in Medway, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

If you are in the area feel free to pop into the office we are based at Station Road, Strood, Kent, ME2 4WQ

Don’t forget to visit the links below to view back dated deals and Medway Property News. 

Blog – http://www.medwaypropertyblog.com/

Facebook – https://www.facebook.com/DocksideP/

LinkedIn– https://www.linkedin.com/in/spencer-fortag-medway/


1

Talk to many Medway 20 something’s, where home ownership has looked but a vague dream, many of them have been vexatious towards the Baby Boomer generation and their pushover ‘easy go lucky’ walk through life; jealous of their free university education with grants, their eye watering property windfalls, their golden final salary pensions and their free bus passes.

If you had bought a property in Gillingham for say £15,000 in first quarter of 1977, today it would be worth £329,658, a windfall increase of 2097.72%.

But to blame the 60 and 70 year olds of Medway for that sort of rise seems a little unfair, with the value of the homes rising like rocket, I don't believe they can be censured or made liable for that. A few weeks ago, I discussed in my blog the number of people in the Medway area who have two or more spare bedrooms (meaning they are under-occupying the house). I see many mature members of Medway society, rattling around in large 4/5 bed houses where the kids have flown the nest years ago ... but should they be blamed?

We are all just human, and the mature members of UK society have just reacted to the inducements of our property and tax system. The mature generations who joined the property market party in the 1970’s and 1980’s were able to take out huge mortgages, protected in the knowledge that inflation would corrode the real value of the mortgage, while wage gains would boost their ability to repay.

Neither do I directly blame the multitude of Medway buy to let landlords, buying up their 10th or 11th property to add to their buy to let empire. They too, are humbly reacting to the peculiar historic inducements of the UK property market.

So, who is to blame?

Well, hyperinflation in the 1970’s meant the real value of people’s mortgages was whipped out (as mentioned above). Margaret Thatcher and Nigel Lawson are also good people to blame with Maggie selling off millions of council houses and Nigel Lawson’s delayed ending of the MIRAS tax relief in 1987; meaning he too can get his share of indignation. The Blair/Brown combo doubled stamp duty in 1997 and again in 2000, which, as a tax on property transactions, precludes a more efficient distribution of the current housing stock. The Government has had plenty of opportunity to change the draconian stamp duty rules to incentivise those mature Medway house movers to downsize.

However, I have started to see over the last few years a change in Government policy towards housing. The new breed of Medway buy to let landlords that have come about since the Millennium, have had their wings clipped over the last couple of years, with the introduction of new tax rules (meaning it is slightly more difficult to make money out of property unless you have all the national information and Medway property trends to hand).

It’s easy to think the only reason that hundreds of first time buyers have been priced out of the Medway housing market is because of these landlords. Yet, I believe landlords have been undervalued with the Medway homes they provide for Medway people. With first time buyers struggling to save for a deposit, if it weren’t for those landlords buying up those homes over the last 10/15 years, we would have a bigger housing crisis than we have today. Since the global financial crisis of 2008/9, local councils have had to cut services, so certainly didn’t have enough money to build new homes ... homes that were provided to Medway by these buy to let landlords. 

One side of the argument is that 1,007 homes are being bought up by buy to let landlords each year in the Medway Council area when otherwise they might have become available to other buyers, the other side of the argument is the current national average deposit is £51,800, which is, by far, the greatest barrier to those wanting to buy their first home. Those homes bought by local buy to let landlords are not left idle, as they equate to 7,051 of new homes for local people, most of whom who see renting as a better option because of the choice, the simplicity and the flexibility which renting brings.

In the 60’s/70’/80’s, the traditional thoughts that you were a failure unless you owned your own home have now all but disappeared, because if you ask many young people, they would probably say renting was the perfect option for them at certain times of their life.

One place for more information is the Medway Property Market blog If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Medway Property Market together with regular postings on what I consider the best buy to let deals in Medway, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

If you are in the area feel free to pop into the office we are based at Station Road, Strood, Kent, ME2 4WQ

Don’t forget to visit the links below to view back dated deals and Medway Property News. 

Blog – http://www.medwaypropertyblog.com/

Facebook – https://www.facebook.com/DocksideP/

LinkedIn– https://www.linkedin.com/in/spencer-fortag-medway/

Website – http://www.docksidekent.com/

Medway
 
 
My research shows that certain types of Strood property are just as affordable today than they were before the 2007 credit crunch.
 
Roll the clock back to 2007 just before the credit crunch hit which saw Strood property values plummet like a lead balloon and the Strood property market had reached a peak with the prices for Strood property hitting the highest level they had ever reached.  Between 2008 and 2010, Strood property values lay in the doldrums and only started to rise in 2011, albeit quite slowly to begin with.
 
Nevertheless, even though property values have now passed those 2007 peaks, my research indicates that Strood property, especially flats/apartments, are now more affordable than they were before the 2008 credit crunch (in real terms).
 
Back in 2007, the average value of a Strood flat/apartment stood at £113,816 and today, it stands at £143,020, a rise of £29,204 or 25.7%.
 
However, between 2007 and today, we have experienced inflation (as measured by the Government’s Consumer Price Index) of 25.97% meaning that in real spending power terms Strood apartments are 0.3% more affordable than in 2007. Looking at it another way, if the average Strood apartment (valued at £113,816 in 2007) had risen by 25.97% inflation over those 10 years, today it would be worth £143,374 (instead of the current £143,020)….not much difference in real terms.
 



 
 
 
The point I’m trying to get across is that Strood property is more affordable than many people think.  Strood first time buyers can get on the ladder as 95% mortgages have been readily available to first-time buyers since 2010.
 
It really comes down to a choice and if Strood first-time buyers can get over the hurdle of saving the 5% deposit for the mortgage on the property – they will be on to a winner, especially with these ultralow mortgage interest rates, a mortgage can be between 10% and 30% cheaper per month than the rental payments on the same house.
 
So why aren’t Strood 20 somethings buying their own home?
 
Back in the 1960’s and 1970’s, renting was considered the poor man’s choice in Strood (and the rest of the Country) a huge stigma was attached to renting. However, over the last 10 years as a country, we have done a complete U-turn in our attitude towards renting - meaning that many people find renting a better option and a lifestyle choice.
 
Saving the 5% deposit means going without many luxuries in life (such as holidays, every satellite movie and sports channel, socialising or the latest mobile phone – even if only in the short term) therefore instead of saving every last pound to put towards a mortgage deposit Strood 20 somethings choose to rent.
 
There is no denying the simple fact that over the next 10 to 15 years, the people who choose to rent instead of buy in Strood will continue to rise.
 
Therefore, everyone in Strood has a responsibility to ensure that an adequate number of quality Strood rental properties are safeguarded to meet those future demands. Interestingly, what I have noticed though over the last few years are the expectations of Strood tenants on the finish and specification of their Strood rental property.
 
I have perceived that in the past, what a tenant wanted from their Strood rental property was moderately unassuming because renting a property was only a short-term choice to fill the gap before jumping on the property ladder. Before the millennium, wood chip wall paper and twenty-year-old kitchen and bathroom suites were considered the norm.
 
However, Strood tenants’ expectations are becoming more discerning as each year goes by.  I have also noticed the length of time a tenant remains in their Strood property is becoming longer (and this was backed up recently by stats from a Government Report), although I have noticed a tendency for many Strood landlords not to keep the rental payments at the going market rates  - maybe a topic for a future article for my blog?
 
The bottom line is this … Strood landlords will need to be more conscious of tenants needs and wants and consider their financial planning for future enhancements to their Strood rental properties over the next five, ten and twenty years -  e.g. decorating, kitchen and bathroom suites etc etc ..
 


The present-day and future situation of the Strood private rental property market is important, and I frequently liaise with Strood buy-to-let investors looking to spread their Strood rental-portfolios. I also enjoy meeting and working alongside Strood first time landlords, to ensure they can navigate through the minefield of rental voids, the important balance of capital growth and yield and ensuring the property is returned back to you in the future in the best possible condition.
If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Medway Property Market together with regular postings on what I consider the best buy to let deals in Medway, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

If you are in the area feel free to pop into the office we are based at Station Road, Strood, Kent, ME2 4WQ

Don’t forget to visit the links below to view back dated deals and Medway Property News. 

Blog – http://www.medwaypropertyblog.com/

Facebook – https://www.facebook.com/DocksideP/

LinkedIn– https://www.linkedin.com/in/spencer-fortag-medway/


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