If I were a buy to let landlord in Southampton today, I might feel a
little bruised by the assault made on my wallet after being (and continuing to
be) ransacked over the last 12 months by HM Treasury’s tax changes on buy to
let. To add insult to injury, Brexit has caused a tempering of the Southampton
property market with property prices not increasing by the levels we have seen
in the last few years. I think we might even see a very slight drop in property
prices this year and, if Southampton property prices do drop, the downside to
that is that first time buyers could be attracted back into the Southampton
property market; meaning less demand for renting (meaning rents will go down). Yet,
before we all run for the hills, all these things could be serendipitous to
every Southampton landlord, almost a blessing in disguise.
Southampton has a population of 245,072, so when I looked at the number
of people who lived in private rented accommodation, the numbers astounded me …
Yields will rise if Southampton property prices fall, which
will also make it easier to obtain a buy to let mortgage, as the income would
cover more of the interest cost. If property values were to level off or come
down that could help Southampton landlords add to their portfolio. Rental
demand in Southampton is expected to stay solid and may even see an improvement
if uncertainty is protracted. However, there is something even more important
that Southampton landlords should be aware of: the change in the anthropological
nature of these 20 something potential first time buyers.
I have just come back from a
visit to my wife’s relations after a family get together. I got chatting with my
wife’s nephew and his partner. Both are in
their mid/late twenties, both have decent jobs in Southampton and they rent.
Yet, here was the bombshell, they were planning to rent for the foreseeable
future with no plans to even save for a deposit, let alone buy a property.
I
enquired why they weren’t planning to buy? The answers surprised me as a 50
something, and it will you. Firstly, they don’t want to put cash into property,
they would rather spend it on living and socialising by going on nice holidays and buying the latest tech and
gadgets. They want the flexibility to live where they choose and finally, they
don’t like the idea of paying for repairs. All their friends feel the same. I
was quite taken aback that buying a house is just not top of the list for these
youngsters.
So, as 25.2% of Southampton people are in rented accommodation and as
that figure is set to grow over the next decade, now might just be a good time
to buy property in Southampton – because what else are you going to invest in? Give your money to the stock market run by sharp
suited city whizz kids – because at least with property – it’s something you
can touch - there is nothing like bricks and mortar!
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
LinkedIn, https://www.linkedin.com/in/brianlinehan
I really enjoy reading and also appreciate your work.
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Your articles and blogs are inspirational.
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