As house prices continue to soar, can you guess which district of Kent has seen the fastest house price growth over the past 26 years? The answer might surprise you.
But before we get to that, earlier this week the Office for National Statistics (ONS) released figures which revealed the average house value in England hit a record high of £312,000 in July.
In the southeast, the increase over the year represented a meteoric jump of 15.8%. Much higher, it should be stressed, than London, which saw a somewhat more modest increase of 9.2% – the lowest of any region in England.
The dramatic rise is, in part, due to a market slump last July after the end of the stamp duty holiday period – ushered in by the government to help boost the market after the ravages of the pandemic.
In Kent, the average house price is now over £331,000.
Which means if you wanted to get a mortgage, using today’s rough guide from a lender offering you around four times your salary, then you would need to make upwards of £80,000.
Given that the average salary in the county is closer to £30,000, you can see the challenge for those desperate to get on the housing ladder,
But then, with real estate prices out of reach for many, this will come as no surprise; a whole generation had to put up with it.
The question is, will they ever fall?
Spencer Fortag is a property expert who runs Dockside Property Services at Medway.
“I was going to say that if something seismic happened it might drive the prices down,” he says, “but we’ve had a lot of seismic things happen and it hasn’t really shaken the confidence of the people. people on the property.
“The fundamental reason will never change – we have a safe and democratic society, there is never a challenge as to who owns the land and culturally and educationally we are revered across the world.
“Because it’s not just us islanders buying our own properties – there’s huge external, foreign investment wanting to buy in the UK.”
This has been seen in the Kent residential market by the influx of buyers from Hong Kong snapping up properties as they seek to start a life here.
“Having said all that,” adds Spencer, “it’s possible that real estate prices could one day fall.
“If, for example, we had a change of government and a policy restricting foreign investment, we might see a drop. If interest rates jumped into double digits, but then, of course, where a market suffers , generally the other profits and it is true of the market of the sale and the hiring.
“For the past few years, I’ve given up on predicting because we never know what’s to come.”
Rising interest rates, of course, also drive up mortgage costs.
Not that out of reach house prices have always been the solution.
According to ONS figures, the median price of a residential property, take for example the county town of Maidstone, was £64,000 in March 1996.
Back then, you could almost certainly get a 100% mortgage. Chances are you can even borrow a little more so you can splash out on some furniture. Oh yeah, young readers, you could be loaned all the money you need (don’t worry about the deposit) and a little more to pay back as you please.
But the 2008 credit crisis – brought on after some rather reckless lending by major US banks – led to a radical shake-up in the way money was handled to avoid a repeat of the financial crash it caused. The result was near death. 100% mortgage and a deposit requirement to absorb any potential future shortfall if property prices take a hit and expose lenders.
Back to those Maidstone house prices. Within 10 years that price, according to the ONS, had risen to £178,750. In March 2022 it stood at £340,000. This is an increase of more than 431% in the space of 26 years.
And that’s far from the biggest percentage increase.
Want to know the neighborhood with the biggest jump? Well, the weather is nice Thanet. A property there in 1996 would have cost you an average of £46,500. Today it’s £285,000.
Who said that art – in the guise of the Turner Contemporary – couldn’t be the catalyst for economic recovery?
In fact, the seaside pitches have proven to be a good investment.
Canterbury has always been popular, but the Whitstable boom has played a big role in driving the average price for the city’s neighborhood from £56,000 in 1996 to £335,000 today. An increase of 498%.
This is followed by Folkestone and Hythe, where property prices have increased sixfold from £50,500 to £300,000.
If you’ve purchased property in the east county, it sounds like you’re happy with it.
Rob Sabin, sales manager at estate agents Miles and Barr, said: “East Kent covers a huge area with a variety of towns and locations which attract a wide range of buyers.
“The area’s diverse lifestyle offering, variety of accommodation options and wide range of property prices, means it can outperform national trends. The East Kent housing market continues to remain vibrant as people still enjoy the allure of living near the coast with the benefit of great transport links back to London. This continues to be a major pull factor for many home buyers.”
Attention, the East does not take all the first places.
The lowest return on investment is in Ashford, where prices started at £62,625 and rose to £316,000 – again, it must be said, a healthy increase for owners of 405%.
Other significant increases relate to Medway, Swale and Gravesham.
And, it almost goes without saying, the highest prices are in the heart of the western suburbs. The average ownership of Sevenoaks earlier this year was £446,000; Tunbridge Wells £410,000 and neighboring Tonbridge £375,000.
Which is great news if you’re a homeowner sitting on a property whose price keeps rising. Still, it’s a blow to those who are saving frantically in an effort to climb the housing ladder.
“There is an absolute shortage of properties to buy in Kent at the moment,” says Spencer Fortag, explaining why prices are so high.
“Despite the fact that we are seeing some new build developments come online, the fact remains that there is a massive and continued demand for real estate.
“We are far from satisfying this appetite.
“All local councils have targets to meet – Kent and Medway are not alone in this – nor are they the only ones not meeting targets set by central government.
“We just aren’t building enough new, affordable homes.”
Which may disturb those who object to the scale of new housing construction in the county.
As for the immediate future? He may not like trying to predict what’s around the corner in an increasingly uncertain world, but Spencer thinks that despite the cost of living crisis and rising interest rates – that drive up mortgage payments – things will stabilize.
He explains: “I think what we will see is that house prices in Medway and Kent will remain broadly neutral over the next 12 to 18 months.
“The two main drivers of house prices are employment levels and interest rates. Currently, employment levels appear to be fairly stable and interest rates are certainly manageable and quite low, despite the recent increases.
“If we don’t see a massive disruption in employment levels and a spike in interest rates, I remain quite confident that property prices will remain stable.
I remain quite confident that real estate prices will remain stable.
“But watch this space. The last quarter of this year will be a tough time for a lot of people.”
And that could, perhaps, drive down the ever-increasing cost of properties. Don’t bet on it.