Medway's housing market is broken
As house prices slightly fall, rents are surging upwards. What's happening?
Today’s issue is about housing, an issue we keep returning to here at Local Authority. Unfortunately, we’ll keep returning to it until things aren’t so utterly broken.
If you read certain parts of the gutter press that we won’t link to here, you could be led to believe that Britain’s house prices are in free fall, and it’s now easier than ever to get on the housing ladder. Indeed, news did break today that house prices in the UK have seen their first annual drop in more than a decade.
As always, the devil is in the detail though, and that drop amounts to a grand total of 1%, following years of growth that would often push 10% each year.
We aren’t a publication to prognosticate on national house prices though, so the story for us is what is the picture in Medway?
One thing immediately clear is that the drop in prices is noticeable here, as illustrated on this graph of prices from 1995 (the earliest recorded data) to today as provided by the government:
That devastating drop has seen the average house price in Medway fall from a high of £305,000 in February this year to £300,000 today, bringing prices crashing down to the levels of September 2022.
The average first-time buyer in Medway can expect to pay £268,000, down from a high of £273,000, but this will provide little comfort as interest rates continue to spiral upwards.
Given the average salary in Medway is around £31,000, it is simply impossible for so many of our residents to find a way onto the housing ladder.
As a result, so many of our residents are trapped in the private rental sector. To declare an interest here, I am one of them.
Rental prices are soaring upwards, with rents nationally jumping 10% year on year, as the country struggles to get a grip on inflation.
Anecdotally, there are signs that things are even worse in Medway. One-bedroom flats that were on the market for £950pcm last year are available now for £1,200pcm - a 26% increase. Houses off of Luton Road (that are admittedly quite nice) are on the market for £3,500pcm. It’s nearly impossible to find any property in Medway under £1,000pcm now unless there is something very wrong with it. And there’s no sign of any of this slowing down.
So what’s the solution?