Well, hasn’t 2016 been eventful. The ups and downs of Brexit, the Queen’s 90th, Andy Murray winning Wimbledon, Trump, Bake Off to Channel 4 and something close to the hearts of every buy to let landlord and homeowner in Southampton ... the Southampton property market.
So, let’s look at the headlines for the Southampton
property market...
In the last month, Southampton property values
dropped by 0.45%, leaving them, year on year 9.9% higher, whilst interestingly,
Southampton asking prices are down 2.0% month on month. All three statistics go
to show the Southampton property market has recovered well after the summer
lull, which was worsened by the uncertainty surrounding the EU vote back in June.
Irrespective of all the issues, the average value of a Southampton home now stands at £289,600.
Generally, Southampton asking prices continue
to hold up well, as asking prices are 4.7% higher year on year. At this time of
year, asking prices tend to drop on the run up to Christmas and locally, they
have dropped by 2.0% this month (November 2016), although this still compares
well with last year’s drop in Southampton asking prices, as we saw asking
prices drop by 1.1% in November 2015.
Now it’s true to say, after chatting with
fellow property professionals in Southampton, all of us have seen the number of
property sales fall slightly, suggesting a slowing market, but it is very early
days and it could be the time of year. Also, the numbers are limited, so it’s
interesting to take note from a recent survey by the Royal Institution of
Chartered Surveyors, stating new buyer enquiries and new instructions are
falling at the same rate, suggesting that there will not be a downward pressure
on property values.
Looking at the
figures for the UK (as we can’t just look at Southampton in isolation),
property values are generally rising slower than a few years ago, but on a
positive note, there's still growth across the UK. You
see, slowing property value growth isn't solely Brexit related, but after a
number years of double digit rises in property values, affordability has
weakened and cooling price growth is widely seen to be a natural
correction of the market.
On the other
hand, interest rates being at a record low of 0.25% are helping the property market. The cut in interest rates in the late summer was the medicine
for the post-Brexit worry and will, as a consequence, ensure that the UK
economy continues to be underpinned by buoyant property prices.
So, what will happen in 2017 in the Southampton
property market?
Some say until we know what type of exit the
UK will make from the EU it is hard to evaluate the outcome. Although, I
believe, the whole Brexit issue is a sideshow to the main issue in the UK (and Southampton)
housing market as a whole. As I have mentioned time and time again over the last
few months, the biggest issue is demand outstripping supply when it comes to
the number of households required to house us all. Southampton has an ever-growing
population: with immigration (we still have at least two years of free movement
from EU members into the UK), people living longer and the fact we need thousands
of additional households as the country has nearly 115,000 divorces a year
(where one household becomes two households).
These are interesting times ahead!
If you are a landlord or thinking of becoming one for the first time and you want to read more articles like this about the Southampton Property Market, together with regular postings on what I consider the best buy to let deals in Southampton (out of the many of properties on the market, irrespective of which agent is selling it) then feel free to get in touch.
If you are looking for an agent that is well established, professional and communicative, then contact us to find out how we can get the best out of your investment property.
Email me on brian.linehan@belvoirlettings.com or call on 023 8001 8222.
Don't forget to visit the links below to view back dated deals and Southampton Property News.
Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan
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The blog is good enough I again n again read this.
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Good to read - please can you keep me on the list as would like to see the latest ones.
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Thanks Sally