Southampton Flats Out Perform Property Market Average by 16%

According to the Land Registry's latest House Price Index for Southampton and the surrounding locality, the value of apartments/flats are rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.

Values of apartments in Southampton have increased by 9.42% over the past year, which is proportionally 16% more than the Southampton average rise of 8.15%. The last time flats/apartments in Southampton out performed all the other types of property, by such a gulf, was back in the spring of 2003. For comparison, the other property types performed as follows ..

• ·         Detached homes rose by 7.66%
• ·         Semi-detached homes rose by 7.27%
• ·         Terraced/Town-Houses rose by 7.3%

This moderately increasing rate of property value growth is opportune – but no one should confuse it with a strong and vigorous healthy Southampton property market. Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Southampton on a number of occasions in my Southampton Property Blog and whilst it isn’t as bad as it was 12 months ago – choice is quite limited for buyers.

The average property value in Southampton

now stands at £279,300.

When split down into property types..

• ·         Southampton Apartments at £175,200
• ·         Southampton Detached at £422,700
• ·         Southampton Semi-Detached at £262,600
• ·         Southampton Terraced/Town-House at £224,600

So why have Southampton apartments performed so well, and is it just a Southampton thing? When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.

So, should Southampton apartment owners be getting out the Champagne? Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Southampton house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.

Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have had the Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.

So, what next for the Southampton Property market? I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation as the effects of 2016 exchange rate sucks in inflation (meaning real wage growth stagnates). This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.

I believe we are starting to return to the housing market we saw in the mid 1990’s, Steady demand, steady supply – nothing silly when it comes to house price growth. Therefore, I believe, with what is happening around us – this isn’t a bad thing at all. HMS Southampton Property Market…. “Nice and steady as she goes”, says the Captain.

If you are looking for an agent that is well established, professional andcommunicative, 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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

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Website, https://www.belvoir.co.uk/letting-agents-southampton 

8.06 Babies Born for Each New Home Built in the Southampton area

As more babies are being born to Southampton mothers, I believe this increase will continue to add pressure to the over stretched Southampton property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 8.06 babies were born for every new home that was built in the Southampton council area in 2016.  I believe this has and will continue to exacerbate the Southampton housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Southampton rents and Southampton property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Southampton council area had an average of 56.3 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region it’s also 61.7 births per 1,000 women aged 15 to 44.

The number of births from Southampton women between the ages of 20 to 29 are significantly lower than the national average, but those between 35 and 44 were closer to the national average.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Southampton area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing ... a huge increase in the need for housing in Southampton.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Southampton people.

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) ... demand for property is simply outstripping supply.

The simple fact is more Southampton properties need to be built

… be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle Southampton Common, but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Southampton, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

If you are looking for an agent that is well established, professional andcommunicative, 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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton 

Hard Brexit could cause 5,100 properties to be dumped onto the Southampton Property market

So all cards up in the air! A general election will be on the books, but one thing is for sure ... whoever gets the job to deal with Brexit has a hard job on their hands (I'm just glad its not me!) As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Southampton (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.

Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Southampton ... but nothing could be further from the truth.

Of the 228,459 people who are resident in the Southampton City Council area, 188,843 were born in the UK, 5,522 were born in EU countries from West Europe and 10,031 were born in EU countries from the former Soviet States in East Europe (the rest coming from other countries around the world).

The rights of these EU citizens living in the Southampton area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Southampton will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.

So, what would a hard Brexit do to the Southampton property market?

Well a hard Brexit could mean the nuclear option when it comes to the Southampton housing market. It could mean that every EU citizen would have to leave the UK.

In the Southampton City area, 2,292 of the 5,522 Western European EU citizens own their own home and (so they would all need to be sold) and 7,953 of the 10,031 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.

Hard Brexit and mass EU Migration would mean c. 5,100 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Southampton property values and rents, causing negative equity for thousands of Southampton homeowners and many buy-to-let landlords would be out of pocket.

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Southampton (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Southampton (and the surrounding area) to get work and provide for their families. Many Southampton people have invested their life savings into buying a buy to let property.

Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK ... politics aside - a hard Brexit is in no one’s interests.

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Southampton), one source of information is the Southampton Property Blog 

If you are looking for an agent that is well established, professional andcommunicative, 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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton 

Should the 23,311 home owning OAP’s of Southampton be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Southampton society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Southampton home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Southampton homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it).

Looking at the statistics for Southampton, of the 23,311 Homeowners who are 65 years and older, whilst 12,835 of them described themselves in good or very good health, a sizeable 7,790 home owning OAPs described themselves as in fair health and 2,686 in bad or very bad health.

11.52% of Southampton home owning OAP’s are in poor health

But if you look at the figures for the whole of Southampton City Council, there are only 770 specialist retirement homes that one could buy (if they were in fact for sale) and 2,766 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Southampton downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Southampton population and specialist retirement properties for the ones who aren’t in such good health ... we need to build more appropriate houses in Southampton.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

.. and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Southampton is ... more houses and apartments need to be built in the Southampton area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Southampton property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Southampton), one source of information is the Southampton Property Blog 

If you are looking for an agent that is well established, professional andcommunicative, 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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton 

6,359,692 People use Southampton Central Train Station a year - How does that affect the Southampton Property Market?

It might surprise you that it isn’t always the poshest villages around Southampton or the swankiest Southampton streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Southampton, I am frequently confronted with queries about the Southampton property market, and most days I am asked, “What is the best part of Southampton and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person – a lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that, in total, 8,736 people jump on a train each and every day from Southampton Central Train station. Of those, 2,690 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to London is £5,424 a year.

So, if up to £14.59m is being spent on rail season tickets each year from Southampton Central, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Southampton and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Southampton buy to let market – providing homes for the tenants of Southampton…

The bottom line is that property values in Southampton would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it serves in the city

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.  

Overall usage of the Central station at Southampton has increased over the last 20 years. In 1997, a total of 3,216,569 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 6,359,692 people using the station (that’s 17,472 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Southampton property. It is also significant for tenants - so if you are a Southampton buy to let investor looking for a property - the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website. 

For more thoughts on the Southampton Property market – please visit the Southampton Property Blog

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Southampton), one source of information is the Southampton Property Blog 

If you are looking for an agent that is well established, professional andcommunicative, 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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton