How did the Southampton property market fare against the rest of the UK in 2014?

We have all seen the growth in property prices during 2014 and the cooling off in the last quarter. London has taken the headlines and has returned 17.8% growth and the UK as a whole has seen increases of 8.3% on average, but averages can hide a lot!!
So looking at the UK in a little more detail:

REGION	AVERAGE PRICE	ANNUAL % CHANGE	QUARTERLY CHANGE
Wales	£141,631	1.4%	-0.6%
Scotland	£142,527	4.2%	0.5%
Northern Ireland	£120,685	8.1%	1.6%
England	£226,809	10.6%	1.6%
UK	£189,002	8.3%	1.1%
London	£406,730	17.8%	2.5%

Wales has struggled with Cardiff returning only 4% growth. Scotland faired a little better with Aberdeen the top city with 12% growth. Northern Ireland did well with Belfast being its star pupil at 17%. It was very patchy in the North of England with Manchester returning zero growth, Sunderland 5% and Leeds was the star at 14% growth.

So how has Southampton performed compared to other cities and towns in the South of England:

REGION	Q4 PRICE	ANNUAL % CHANGE
Bristol	£277,638	14%
Brighton & Hove	£394,755	13%
Portsmouth	£221,742	12%
Bournemouth	£274,057	11%
Swindon	206,917	9%
Southampton	£252,513	8%
Isle of Wight	£206,695	8%
Bath	£286,190	7%
Poole	£275,247	7%
Plymouth	£184,553	5%
Cheltenham	£252,925	-2%

Well Southampton is mid table (I know the Saints wouldn't be happy with that) on property values and growth rates and that's a nice place to be!  Our property is not too expensive, sure it is £19,000 more expensive than last December but with steady growth it can provide a good investment platform. An 8% capital growth together with a gross yield of 6% provides an attractive overall return of 14%.

2015 will bring its challenges, as we have seen house price growth has moderated over the last number of months but of more concern is the decline in the number of mortgage approvals which fell to their lowest level for 16 months in October. The economy is going in the right direction, employment is improving and wage growth is starting to happen after a long period of decline. And of course interest rates are low and will remain so for some time, sure they will tick up and may end up at circa 3% in 18 or 24 months’ time. The recent stamp duty changes will also have a positive impact for Southampton property buyers. In the outer South East region about 85% of all transactions will benefit from lower stamp duty cost by an average of £1,571. (Source Nationwide analysis of Land Registry Data 2013/14).

You can't get away from the fact that there is a shortage of housing in the UK. We have a requirement for about 240,000 new homes a year and since 2008 we have only been producing 120,000 - thats a deficit on the supply side of some 840,000 homes and as a result of that we have seen more people move into the private rented sector and the age at which someone acquires their first property is now almost 30. But first time buyers are now getting more active and will continue to be, as long as the supply comes through. But it takes time to fix the supply side there are infrastructural issues, planning issues and political issues to overcome. All of this points to a growth in the private rented sector which will support and grow values here in Southampton.

So if you are thinking of investing in Southampton the returns look good but you need to do your homework. You need to buy the right asset in the right location and above all else don't over pay for it - it will destroy your yield and you will spend a long time catching up. I know the Southampton property market well and if I can assist you please call me and we can have a chat over a coffee.
http://www.nationwide.co.uk/about/house-price-index/download-data#tab:Downloaddata