Should you buy or rent a house? Buying your own home can be
expensive but could save you money over the years. Renting a property through a
letting agent or private landlord offers less autonomy to live by your own
rules, with more flexibility if you need to move.
Yet, there is third way that many people seem to forget,
yet it plays an important role in the housing of Southampton people.
Collectively known as social housing, it is affordable housing, which is
let by either Southampton City Council or a housing association to those considered
to be in specific need, at rents below those in the private rental market.
In Southampton, there are 23,373 social housing households,
which represent 22.18% of all the households in Southampton. There are a
further 7,001 families in the Southampton City Council area on their waiting
list, which is similar to the figures in the late 1990’s. The numbers peaked in
2011, when it stood at 16,258 families, so today’s numbers represent a drop of 56.9%.
Nevertheless,
this doesn't necessarily mean that more families are being supplied with their own
council house or housing association property. Six years
ago, Westminster gave local authorities the right to limit entitlement
for social housing, quite conspicuously dismissing those that did not have an association or
link to the locality.
Interestingly,
the rents in the social rented segment have also been growing at a faster rate
than they have for private tenants. In the Southampton City Council area, the
average rent in 1998 for a council house/housing association property was £179.18
a month, whilst today its £376.26, a rise of 110% in 19 years.
When
comparing social housing rents against private rents, the stats don’t go back to
the late 1990’s for private renting, so to ensure we compare like for like, we
can only go back to 2005. Over the last 12 years, private rents have increased nationally
by a net figure of 19.7%, whilst rents for social housing have increased by
59.1%.
So, what
does this all mean for the homeowners, landlords and tenants of Southampton?
Rents in the
private rental sector in Southampton will increase sharply during the next five
years. Even though the council house waiting list has decreased, the number of
new council and housing association properties being built is at a 70 year low.
The government crusade against buy-to-let landlords together with the increased
taxation and the banning of tenant fees to agents will restrict the supply of
private rental property, which in turn using simple supply and demand
economics, will mean private rents will rise – making buy to let investment a
good choice of investment again (irrespective of the increased fees and
taxation laid at the door of landlords).
It will also mean property values will remain strong and stable as the
number of people moving to a new house (and selling their old property) will
continue to remain restricted and hence, due to lack of choice and supply,
buyers will have to pay decent money for any property they wish to buy.
Interesting
times ahead for the Southampton Property Market!
For more information on the Southampton property market, visit the Southampton Property Market Blog
For more information on the Southampton property market, visit the Southampton Property Market 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.
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