Following a period of steady house price growth well into 2007, which has seen an average price increase in Kent of 7% on the previous year, there are clear indications that the level of house price growth is starting to reduce, a sign that the five interest rate rises over the past year are starting to have an adverse effect on the residential property market.
Estate agents are reporting a reduction in the number of instructions, following a busy period during May 2007 in the lead up to the proposed introduction of the Home Information Packs (HIPs) on 1st June 2007. The requirement for HIPs for all four plus bedroom properties came into force in Summer 2007. HIPS also became compulsory for three plus bedroom properties in September 2007. This seems to have had little impact on market activity to date.
With the average price of a house in Kent standing at £197,861 (May 2007) against the national average of £180,594, affordability is a concern, as there are few properties available below £100,000, which, coupled with rising interest rates is likely to lead to a slow down in activity at the lower end of the market.
Within West Kent, City bonuses have once again boosted the sale of properties at the upper end of the market. Elsewhere the general level of transactions and new instructions has reduced at the upper end of the market although there have been modest price increases.
East Kent has experienced a period of steady house price growth and an increasing demand for development opportunities. There are a large number of apartment schemes on the market in the coastal towns especially Margate, Ramsgate and Folkestone with indications of an oversupply of such properties within the area. Premium prices are only being achieved for quality developments in the best seafront locations.
Oversupply of apartments remains a concern within other parts of the county including Maidstone and Tunbridge Wells where price increases for such properties have been modest and demand for such development schemes has reduced in favour of high quality town house and mixed unit schemes. |
New Prime Minister, Gordon Brown, has made clear his plans for housing supply over the next decade. These include increasing the number of new houses being built from 200,000 to 240,000 each year, and the creation of a new homes agency to bring forward surplus public land for social and affordable housing. The August 2007 Panel report on the Draft South East Plan (SEP) recommends an increase across the region from 28,900 to 32,000 homes per annum, including a total increase of 9,580 houses across Kent between 2006 and 2026, concentrating in Maidstone, Swale and East Kent, with small increases in Tonbridge and Malling and Tunbridge Wells. Continuing regeneration within the county also remains a priority.
Whilst the introduction of Planning Gain Supplement remains uncertain, the Government is continuing to look into alternative ways of ensuring that maximum gain is available for investment in infrastructure and for the benefit of the local communities.
The lettings market continues to be fairly active with rental income maintaining consistent levels, however, yields have continued to drop due to increasing freehold values which, coupled with increasing interest rates may start to hit the buy-to-let investment market and dampen sales within this sector.
Average house price for all property by location
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Average price ranges for new build residential schemes
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