EXCLUSIVE: Kent property sales plummet as market limps towards 2024
Property deal flow halves since 2021, new builds fall off a cliff...
IN DEPTH
Kent's property market takes a dive in 2023. We explore what's behind the plunge.
New research from The Post reveals how the Kent property market is being hit by the impact of a cooling market, increased mortgage rates, and an uncertain economic environment.
Key findings from the analysis reveal:
The number of completed property deals in Kent has halved in only two years, dropping from 15,099 in the second half of 2021 to 7,499 in the first 6 months of this year. The volume of property deals dropped by 43% between the last 6 months of 2022 and first half of 2023 with the number of detached properties sold plunging by 51% in the same period.
Kent property prices have dropped 1.83% on average between the first half of 2022 and 2023 but it is a mixed bag across the county. Properties in Tunbridge Wells (-6.19%) and Swale (-7.06%) have dropped significantly in value but Dartford (+13.5%) and Canterbury (+6.37%) are surprise winners when looking at year-on-year changes. The average property price in West Kent is down £25 thousand since last year.
Kent’s prime property market has experienced the hardest fall. The number of deals has dropped dramatically for properties worth over £1 million, declining by 44% in a two year period between the first half of 2021 and the same period this year. At the same time, the average value of a £1 million plus deal has declined from £2.491 million (H1’21) to £1.819 million now (H1’23).
New build sales have been hit massively as first-time buyers go into ‘wait and see’ mode. Staggeringly, according to the analysis of HM Land Registry Data, only 83 new build properties were sold in Kent during the first half of this year - down from 1,221 in the same period in 2022.
This latest analysis makes for tough reading as the UK's largest mortgage lender Halifax further expects house prices to fall this year and into 2024. The research comes as homeowners face years of elevated mortgage rates with the Bank of England base rate currently at 5.25%, the highest level since the financial crash in 2008. The latest figures show the average rate on two-year fixed mortgage is 6.24% on average, with the average homeowner facing an increase in monthly mortgage payments of around £220 when renewing their fixed-rate deals. However, Kent home owners are more exposed to rate increases as property prices in the county are 44% higher than the national average (£419,479 in Kent vs £291,044 nationally).
Across Kent, the property picture varies. We delve into a fast-changing local picture.
North Kent
North Kent remains the gem of the Kent property market with prices rising by 10% since the first half of 2021. Prices have dropped 2% since the second half of last year with Swale seeing a significant drop in deal flow. Dartford’s property market remains resilient and was one of a handful of places across Kent to see an increase in value from the second half of last year. Average property prices are £435,938 in Dartford which is remarkably up from £383,618 in the first half of 2021 - a rise of over fifty thousand pounds in only two years.
Whilst prices remain relatively resilient in North Kent, deal flow has dropped 43% in only six months which is in line with tougher market conditions across Kent. This reiterates recent insights from estate agent Wards of Kent which noted: “As the property market has slowed to more normal levels, we are also seeing a big uplift in available homes. One of the things that held back a lot of potential sellers and buyers over the last couple of years wasn’t just the rise in prices but critically a lack of supply. We are currently seeing housing stocks, some 75% higher, than this time last year.”
Mid-Kent
Mid Kent property experienced a notable shift in its real estate market from the second half of 2022 to the first half of 2023. In H2 2022, there were a total of 2,613 property deals, with an average property sale price of £414,825, reflecting strong demand and higher property values. However, the market dynamics have evolved in H1 2023, with 1,529 property deals taking place. As the number of transactions decreased, the average property sale price dropped by 4.5% to £395,290 which is in line with the county average. Maidstone property prices dropped by 4.8% in a year, reflecting a tougher market for sellers.
East Kent
In the first half of 2022, there were 4,571 property deals, and the average property sale price stood at £363,253. However, in H1 2023, the number of transactions decreased to 2,606, with the average property sale price remaining quite stable at £362,242. A notable highlight within this market is the city of Canterbury, which witnessed a significant increase in average property prices, surging from £390,707 in the latter half of 2022 to an impressive £417,535 in the first half of 2023. At the same time, prices in Dover dropped by £22,183 in six months to an average of £340,605 during the first half of this year.
West Kent
The West Kent property market has witnessed some noteworthy changes over the past year. In the first half of 2022, there were 3,110 property deals with an average sale price of £567,558, reflecting the market's buoyancy. However, by H1 2023, the number of transactions decreased to 1,702, and the average property sale price declined to £542,139. Tunbridge Wells, a bell-weather town in the South East, experienced a 6.2% decrease in average property prices year on year, dropping from £572,879.41 in H1 2022 to £537,413.48 in H1 2023. In contrast, Sevenoaks, another significant town in the county, only saw a marginal 1.8% decrease in property prices over the same period, with the average price resting at £625,917.
Shifting sands
The current state of the UK property market reflects a complex interplay of factors. On one hand, activity in the housing market is extremely weak, largely attributed to the challenges that potential buyers face with higher mortgage rates and stretched affordability. Rising borrowing costs and a persistent squeeze on household incomes are causing some individuals to delay their buying plans, as securing a mortgage has become a tougher task. For many first-time buyers, the hit to budgets from the rising cost-of-living has further made it more difficult to build a deposit.
In contrast, these challenges may be somewhat of a silver lining for first-time buyers, as the correction in property prices becomes more apparent. As prices begin to adjust, those who have been struggling to get a foothold in the market might find some relief. However, it's important to note that the correction in prices should be seen in the context of the broader economic landscape, where affordability remains a significant concern. Prices increased significantly during COVID. The property market's future trajectory will likely continue to be influenced by the delicate balance between high borrowing costs and household income constraints.
In Kent, the property market is navigating a period of transition, with the challenges of higher mortgage rates and stretched affordability contributing to reduced activity. The inability of many potential buyers to secure mortgages due to sky-high borrowing costs and income constraints is causing delays in purchasing homes. Detached property sales in Kent are down 51% in only a 6-month period. While the correction in property prices may provide some relief for first-time buyers, the market's overall health remains closely tied to economic conditions. The road ahead will be shaped by the delicate equilibrium between these various factors.
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