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Despite Government regulations that have been in place since the 26 March 2020, where face-to-face viewings were made illegal, Medway buy to let landlords have during that time been chomping at the bit to build their property empire by looking at buying additional properties for their Medway buy to let portfolio.

There are plenty of investors who think nothing of legally committing to buying a property ‘off plan’ before it’s built – yet over the last few weeks, it has become the norm in the second-hand Medway property market and they have now stolen a march and bagged some property bargains.

Normally, the face-to-face viewing is step one of the second-hand house buying process … yet now it’s becoming the ‘new normal’ that some Medway agents are carrying out semi-professional video viewings or 360-degree video tours. Even homeowners are getting in on the act and managing a Facetime or Zoom video viewing by walking around their house with their mobile phone.

Yet the Government announced on Wednesday, 13th May 2020 that the Estate & Letting Agency industry could reopen meaning people could view houses, visit agents and move home be they tenants, buyers, landlords or home sellers. This is all subject to general and specific social distancing rules, specific hygiene regulations and suitable PPE being used.

What has been happening in the last few weeks in the Medway property market?

The average time between sale agreed and exchange/completion of contracts on a house sale (i.e. the keys and monies get sorted) is 17 to 19 weeks, which means buying today would mean you wouldn’t be getting your hands on the property until late September or October at the earliest.

Spring is the time when most properties come onto the market, yet as one would expect, the number of Medway properties coming onto the market has been somewhat reduced since lockdown as..

Only 99 Medway properties have been

put up for sale in the last month

This reduction in supply of new properties coming onto the market, combined with this pent-up demand from both Medway landlords and the ‘Boris-Bounce’, could in fact be good news for the Medway property market let me explain…

Rightmove stated that people going to their website initially dropped by 40% at the start of lockdown, yet now has recovered with a near doubling of people searching for properties with gardens (for both sales and renting). For many Medway buy to let landlords (and in fact Medway homebuyers), now is the very best time to do research into the Medway property

market. All the portals have access to 25 years of property sales with pictures, so you can compare and contrast what has happened to various different property types around Medway to spot those under-priced bargains, meaning you can get moving quickly after lockdown.

Rather than feeling trapped or powerless, this time can be used fruitfully by Medway buyers and Medway sellers to get their ducks in a row

One of the biggest barriers in April was mortgage lending. In the early days of the pandemic, most mortgage lenders removed many of their best deals and enormously restricted their capacity. Currently though, we are seeing a revitalisation in the mortgage market. In May with many mortgage products becoming accessible again for borrowers, and with many mortgage companies integrating more digital processes, (including Virtual Surveyor Mortgage Valuations in some cases), the mortgage market now has plenty of options available to those who are keen to borrow.

There is no doubt the Medway housing market got off to a sturdy start in 2020. With Brexit at least partly resolved, the ‘Boris-Bounce’ was starting to take off. With Medway house prices being robust and rental demand was high, the Medway property market was already in a good placed to deal with the subsequent Covid-19 issue.

I know there are a few doom mongers in the National Press spouting about a massive crash in the UK property market. There is a natural tendency for newspapers to latch onto the worst-case scenario in any economic forecast. Who can forget the country received similar projections in the lead-up to the 2016 Brexit vote with HMRC itself stating that UK house values would drop by at least 10% in the first 12 months should the UK vote for Brexit and 20% in two years!

With the rollercoaster of the stock market in recent months, investing one’s money into good old-fashioned bricks and mortar has started to seem a good place again.

Buying a property for investment means you have a tangible asset, something you can touch and feel (and understand). The returns from investing in property comes from both capital appreciation and income from the rent, and yes whilst property values can go up as well as down, successful buy to let landlords are inclined to take a long-term view on their property investments.

£774 per month

The average gross profit from a Medway terraced/town house

To give you an example of the current buy to let returns, the average Medway terraced/town house sells for £273,300, by taking the ‘The Mortgage Works’ BTL 5-year fixed rate of 1.64%, with only £2,946 in up-front fees, a 20-year repayment mortgage would cost you £720 per month or interest only mortgage would cost just £201 per month …

considering the average rent for a terraced/town house in Medway is £975 per month … even before management, tax, maintenance and other associated costs, that’s a decent gross profit (the £774 gross profit is an illustrative example using the interest only mortgage and the capital element would need repaying at the end of the term).

Isn’t it funny the newspapers aren’t latching on to some reports to say the property market might go in the other direction? Remember – bad news sells newspapers!

So, should you wait to buy your Medway buy to let investment?

Before buying take into account factors like the strength of your financial future, your credit score and the current state of the property market and even more importantly, the state of the mortgage market. Look at the current interest rates, they have never been so low and deliberate the experts’ opinions and just as equally your own opinions as to whether Medway property values are on the rise, will stay the same or are likely to fall.

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 spencer@docksidekent.com

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

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