If I were a buy to let landlord in Medway today, I might feel a little bruised by the assault made on my wallet after being (and continuing to be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to let. To add insult to injury, Brexit has caused a tempering of the Medway property market with property prices not increasing by the levels we have seen in the last few years. I think we might even see a very slight drop in property prices this year and, if Medway property prices do drop, the downside to that is that first time buyers could be attracted back into the Medway property market; meaning less demand for renting (meaning rents will go down). Yet, before we all run for the hills, all these things could be serendipitous to every Medway landlord, almost a blessing in disguise.
Let's take a more detailed look this week at Gillingham. This town has a population of 102,202 and when I looked at the number of people who lived in private rented accommodation, the numbers astounded me:
Gillingham - Accommodation Type and the Number of Occupiers
Owned outright - Gillingham Owned with a mortgage - Gillingham Shared ownership (part owned and part rented) - Gillingham Social rented (aka Council Housing) - Gillingham Private rented - Gillingham Living rent free - Gillingham
Yields could rise if Gillingham property prices fall, which may also make it easier to obtain a buy to let mortgage, as the income would cover more of the interest cost. If property values were to level off or come down that could help Gillingham landlords add to their portfolio. Rental demand in Gillingham is expected to stay solid and may even see an improvement if uncertainty is protracted. However, there is something even more important that Gillingham landlords should be aware of; the change in the anthropological nature of these 20-something potential first time buyers. I have just come back from a visit to my wife’s relations after a family get together. I got chatting with my wife’s nephew and his partner. Both are in their mid to late twenties, both have decent jobs in Medway and they rent. Yet, here was the bombshell, they were planning to rent for the foreseeable future with no plans to even save for a deposit, let alone buy a property. I enquired why they weren’t planning to buy? Their answers surprised me as a 40-something, and they will you. Firstly, they don’t want to put cash into property, they would rather spend it on living and socialising by going on nice holidays and buying the latest car, tech and gadgets. They want the flexibility to live where they choose and finally, they don’t like the idea of paying for repairs. All their friends feel the same. I was quite taken aback that buying a house is just not at the top of the list for these youngsters.
So, as 19.3% of Gillingham people are in rented accommodation and as that figure is set to grow over the next decade, now might just be a good time to buy property in Gillingham – because what else are you going to invest in? Give your money to the stock market run by sharp-suited city whizz-kids? At least with property it’s something you can touch; there is nothing quite like bricks and mortar!
Do you own a property in Medway? You now can get a free and instant rental AND sales valuation without even having to speak to one of those pushy estate agents! Try it HERE
I also have a YouTube channel. Apart from showing you around some amazing properties, I also offer some helpful advice for first time buyers and landlords. Watch it HERE
Thanks for reading.Spencer