Will house prices ever go down? And where in Kent has seen the biggest price increases over the years?

What house prices continue to rise Can you guess which district of Kent has seen the most property price growth in the last 26 years? The answer may surprise you.

But before we get to that, earlier this week the Office for National Statistics (ONS) released figures revealing that the median home value in England hit a record £312,000 in July.

House prices continue to rise, but is there anything that can stop the decline or reverse it?

In the Southeast, the increase, over the course of the year, represented a spectacular jump of 15.8%. Much higher, it should be noted, than London, which saw a rather more modest increase of 9.2%, the lowest of any region in England.

The spectacular increase is due, in part, to a drop in the market last July after the end of the Stamp duty holiday period – introduced by the government to help stimulate the market after the ravages of the pandemic.

In Kent, the median property price is now over £331,000.

Which means that if you want to get a mortgage, using the current rough guideline from a lender giving you around four times your salary, then you’d need to earn more than £80,000.

Since the average salary in the county is closer to £30,000, you can see the challenge it presents for those desperate to climb the ladder of the house,

Spencer Fortag has 30 years of experience in the real estate industry
Spencer Fortag has 30 years of experience in the real estate industry

But then the fact that home prices are out of reach for many will come as no surprise; a whole generation has had to accept it.

The question is, will they ever fall?

Spencer Fortag is a property expert who runs Dockside Property Services in medway.

“I was going to say if something seismic happens, it could drive prices down,” he says, “but a lot of seismic stuff has happened and it hasn’t really affected people’s confidence in the property.

“The rationale will never change: we have a safe and democratic society, there is never a challenge over who owns the land, and culturally and educationally we are revered around the world.

How house prices have changed over the years
How house prices have changed over the years

“Because it’s not just us islanders who are buying our own property, there is a lot of outside investment, foreign, that wants to buy in the UK.”

That has been seen in the Kent residential market by the influx of buyers from Hong Kong acquires properties as they look to start a life here.

“Having said all that,” adds Spencer, “it’s possible that house prices could fall one day.

“If, for example, we had a change of government and a policy that restricted foreign investment, we could see a drop. If interest rates were to shoot into double digits, but then of course where one market suffers, usually the other it benefits”. and that is true in the sales and rental market.

“In recent years I have stopped making predictions because we never know what is around the corner.”

Getting the keys to your own house has never been so expensive
Getting the keys to your own house has never been so expensive

Rising interest rates, of course, also cause mortgage costs to rise.

Not that out-of-reach home prices were always the way.

According to ONS figures, the median price of residential property in, let’s take the county seat of maiden stone as an example, it was £64,000 in March 1996.

At that point, you could almost certainly get a 100% mortgage. Chances are you can even borrow a bit more to spend on some furniture. Oh yes, younger readers, you can lend them all the money they need (don’t worry about the deposit) and then some to pay back whenever they please.

But the credit crisis of 2008, caused after some rather reckless lending by major US banks, saw a radical shake-up in the way money was handled to prevent a repeat of the financial collapse it caused. The result was near death. of the mortgage at 100% and a deposit requirement to absorb any potential future shortfalls should property prices take a hit and leave lenders exposed.

The cost of living crisis will impact budgets and could slow home price growth
The cost of living crisis will impact budgets and could slow home price growth

Let’s go back to Maidstone house prices. Within 10 years, that price, according to the ONS, had risen to £178,750. By March 2022, it stood at a mind-boggling £340,000. That’s an increase of more than 431% in the space of 26 years.

And it’s far from the biggest percentage increase.

Do you want to know the district with the highest jump? Well, it’s sunny Thanet. Property there in 1996 would have cost him an average of £46,500. today is £285,000.

Who says art, in the guise of Turner Contemporary, can’t be the catalyst for economic recovery?

Indeed, seaside locations have proven to be a good investment.

Large increases in property prices have been seen over the years in all of our districts.
Large increases in property prices have been seen over the years in all of our districts.

Canterbury was always popular, but the boom in whistable it has played a significant role in increasing the average price of the city district from £56,000 in 1996 to £335,000 today. An increase of 498%.

Next is Folkestone and Hythe, where property prices increased sixfold, from £50,500 to £300,000.

If you bought property in East County, it looks like you’re making money.

Rob Sabin, Director of Sales for Miles and Barr estate agents, said: “East Kent covers a wide area with a variety of towns and locations that attract a wide selection of buyers.

“The region’s diverse lifestyle offerings, variety of housing options and wide range of property prices mean it can outperform national trends. The East Kent property market remains buoyant because people still love like the lure of living on the seaside with the benefit of excellent transport links back to London. This continues to be a major pull factor for many homebuyers.”

Rob Sabin, Director of Sales for Miles and Barr
Rob Sabin, Director of Sales for Miles and Barr

Of course, the east does not occupy all the first places.

The lowest return on investment is found in Ashford, where prices started at £62,625 and have risen to £316,000; still, it must be said, a healthy increase for owners of 405%.

Other big increases are at companies like Medway, Swale and Gravesham.

And, needless to say, the highest prices are in the heart of the west. The average Sevenoaks property at the beginning of this year was £446,000; Tunbridge Wells £410,000 and neighboring Tonbridge at £375,000.

All of which is great news if you’re a homeowner who’s on a property with an ever-increasing price tag. However, it is a blow to those who save frantically in an attempt to climb the housing ladder.

Thanet's traditionally lower property prices have attracted buyers and pushed up prices.
Thanet’s traditionally lower property prices have attracted buyers and pushed up prices.

“There is an absolute shortage of property to buy right now within Kent,” says Spencer Fortag, as to why prices are so high.

“Although we are seeing some new construction promotions goes online, the fact is that there is a strong and continuing massive demand for properties.

“We’re nowhere near satisfying that appetite.

“All local councils have targets to meet, Kent and Medway are not alone in that, nor are they alone in not meeting targets set by central government.

“We’re just not building enough new, affordable homes.”

Homebuilding targets are likely to be missed, making property demand even more intense and pushing up prices.
Homebuilding targets are likely to be missed, making property demand even more intense and pushing up prices.

Which can be uncomfortable for those who oppose the new home construction scale 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 believes that despite the cost-of-living crisis and rising interest rates, rising mortgage payments, things will stabilize.

He explains: “I think what we will see is house prices in Medway and Kent remain broadly neutral for the next 12 to 18 months.

“The two main drivers behind house prices are employment levels and interest rates. Currently, employment levels look fairly stable and interest rates are certainly manageable and low, despite recent increases.

“If we don’t see a massive disruption in employment levels and interest rates soar, I’m pretty confident house prices will remain flat.

I remain fairly confident that house prices will remain stable.

“But watch this space. The last quarter of this year is going to be a challenging time for a lot of people.”

And that can, just can, push back the ever-increasing cost of real estate. Just don’t count on it.

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