Southampton Property Market - Asking Prices Drop but Values rise

Those of you who regularly read my weekly articles in the Southampton Property Blog will know I like to keep abreast of the Southampton property market and something attracted my attention this week about the local market, which I wanted to share with my readers.

Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the city have dropped, yet property values have increased.  The average asking price of a Southampton property, according to Rightmove, fell 1.2% this month yet the average value of a Southampton property rose by 0.2%.

So how does this relate in monetary terms?  This anomaly has driven the average asking price of a Southampton property down slightly to £232,000 whilst the average value is now £256,400.

So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without research and can result in overpriced properties that don't sell. As the summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property. 

On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, in a nutshell, Southampton property values are continuing to rise and those homeowners in Southampton who have properties on the market, last month on average, reduced their asking prices - Great news for property owners and buyers alike!

In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Southampton home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate.

However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 560 flats for sale, 151 terraced houses and 164 semis for sale in Southampton.  Landlord/Buy to let investors can normally pick up some bargains in the Autumn months, as sellers who are selling their homes often have a pressing need to sell by this time. 

The types of houses a Southampton landlord typically buys, are not the same types as the homeowners wanting to move to a better area of the city as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones). There are in fact too many of these smaller properties for sale, just look at the numbers of properties for sale!If you would like a independent view on any property you are considering buying to let out please do give me a call and I would be happy to discuss the pros and cons of any potentiol purchase.