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.
Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan
LinkedIn, https://www.linkedin.com/in/brianlinehan
This comment has been removed by a blog administrator.
ReplyDelete