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The Gravesend housing market is a fascinating beast. It has been particularly interesting since the Credit Crunch of 2008/9, with the subsequent property market crash grabbing the headlines.
Currently, there is a feeling of uncertainly again in the air. Talk of a ‘property bubble’ nationally and the ‘wobble’ presented by the ‘go-to’ excuse Brexit is never far away.
However, looking at both what we do as an agent, and chatting with fellow property professionals in Gravesend, the market has certainly changed for both buyers and sellers alike (be they Gravesend buy to let landlords, Gravesend first time buyers or Gravesend owner occupiers looking to make the move up the Gravesend property ladder).
Gravesend House Values are 0.52% higher than a year ago, and the rents Gravesend tenants have to pay are 1.5% higher than a year ago
When we compare little old Gravesend to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).
However, if we look further back...
Since 2006, Gravesend House Values are 72.4% higher, yet the rents Gravesend tenants have had to pay for their Gravesend rental property are 26.4% higher
...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Gravesend tenants are 15.6% better off in ‘real spending power terms’.
Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. Turn your attention to the dip in Gravesend house values (in red) in the years of 2008 and 2009. As Gravesend property values started to rise after the summer of 2009, see how Gravesend rents dipped 6/12 months later (the yellow bars)…. Fascinating!
So, we have a win for tenants and a win for the homeowners. They are also happy due to the increase in the value of their Gravesend property.
However, maybe an even more interesting point, is for the long-term Gravesend buy to let landlords. The performance of Gravesend rental income vs Gravesend house values has seen the resultant yields drop over time (if house prices rise quicker than rents – yields drop).
Whilst, it’s true Gravesend landlords have benefited from decent capital growth over the last decade –with the new tax rules for landlords – now more than ever, it’s so important to maximise one’s yields to ensure the long term health of your Gravesend buy to let portfolio.
More and more we are sitting down with Gravesend landlords to carry out an MOT style check on their Gravesend portfolio. This will ensure these investments will meet everyone’s future needs of capital growth and income. It might be time for you to do the same.