Is this the end for first time buyers in the Medway property market?

11,773 Medway Homes bought by private landlords in the last 20 years.

There I was, out with my family at the Chatham Ski and Snowboard Centre last weekend, when a smart gentleman approached me. ‘Hello’, he said, ‘You are the person writes that Medway Property Blog aren’t you? We have met before at a business networking event in Gillingham a few months ago’. I did then recognise him and, whilst I won't mention his name, he runs a small but well known independent retailers in the area ... It’s amazing who you see when you are out! Anyway, I was at a loose end for five or ten minutes as the other half was sorting things with our 3 boys, so we had a chat.

The Chatham Ski and Snowboard centre.

He wanted to know my thoughts on the future of the Medway property market and I would now like to share with you that conversation, my Medway property blog reading friends. People are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the area have a choice to what type of roof they have. They can rent from the Council, they can rent from a private landlord or finally they can get a mortgage and buy one. In the 1970’s, 80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, and then buy your first house. However, more recently fewer Medway youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering and I want to share them with you.

Where will first time buyers actually buy? 
Roll the clock back 20 years and Medway was a different place. There were 90,049 households in Medway and 66,407 of those were owner occupied. Move to the present, and with all the building works in the area, the total number of households has snowballed (remember where I am?!) by 7.86% to 97,125. Quite surprising (to me at least), is that the number of owner-occupiers has decreased to 65,038 (although as a proportion, it is only 67.5% compared to 73.7% twenty years ago).

However, it’s the rented sector that is truly fascinating.  Twenty years ago only 5,651 properties were privately rented in Medway.  Now its 17,424, a rise of 11,773!

The twentysomethingsof Medway haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 7,238 to 4,044 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Medway and those who educate themselves and treat it as a business will survive and prosper.

My advice? Seek advice!

The best way Medway landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, that although Medway tenants have ever growing demands from their rental property, many are prepared to pay top rental amounts for houses and apartments that meet their high expectations. Watch my YouTube video here that demonstrates this perfectly by clicking here.

You must not forget, letting property in Medway (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

And, just as Mrs F had sorted the family, he asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are, that with such low supply and high demand it is hard to imagine that Medway property values will see much impact. I predict that the proportion of owner occupiers will increase slightly compared to buy to let landlords in the coming decade as the housing market should return to a degree of balance (unlike me on a snowboard).

For more in-depth thoughts on the Medway Property Market, please sign up for my regular updates. Simply enter your email in the box at the top of the right hand side of this page and click “submit”. You will then get a verification email and once you confirm you will receive my regular and free updates.

If you have any questions or would like me to post a blog on a particular topic, please email me.

Thanks, as ever, for reading my thoughts.

Spencer Fortag.




Popular posts like this