My research shows that certain types of Southampton
property are more affordable today than before the 2007 credit crunch.
Roll the clock back to 2007 just before the credit crunch
hit which saw Southampton property values plummet like a lead balloon and the Southampton
property market had reached a peak with the prices for Southampton property
hitting the highest level they had ever reached. Between 2008 and 2010, Southampton property
values lay in the doldrums and only started to rise in 2011, albeit quite
slowly to begin with.
Nevertheless, even though property values have now passed
those 2007 peaks, my research indicates that Southampton property, especially
flats/apartments, are now more affordable than they were before the 2008 credit
crunch.
Back in 2007, the average value of a Southampton
flat/apartment stood at £153,383 and today, it stands at £179,500, a rise of £26,117
or 17%.
However, between 2007 and today, we have experienced
inflation (as measured by the Government’s Consumer Price Index) of 25.97%
meaning that in real spending power terms Southampton apartments are 8.9% more
affordable than in 2007. Looking at it another way, if the average Southampton
apartment (valued at £153,383 in 2007) had risen by 25.97% inflation over those
10 years, today it would be worth £193,217 (instead of the current £179,500).
The point I’m
trying to get across is that Southampton property is more affordable than many
people think. Southampton first time
buyers can get on the ladder as 95% mortgages have been readily available to
first-time buyers since 2010.
It really
comes down to a choice and if Southampton first-time buyers can get over the
hurdle of saving the 5% deposit for the mortgage on the property – they will be
on to a winner, especially with these ultralow mortgage interest rates, a
mortgage can be between 10% and 30% cheaper per month than the rental payments
on the same house.
So why aren’t Southampton 20 somethings buying their own
home?
Back in the 1960’s and 1970’s, renting was considered the
poor man’s choice in Southampton (and the rest of the Country) a huge stigma
was attached to renting. However, over the last 10 years as a country, we have
done a complete U-turn in our attitude towards renting - meaning that many
people find renting a better option and a lifestyle choice.
Saving the 5% deposit means going without many luxuries
in life (such as holidays, every satellite movie and sports channel,
socialising or the latest mobile phone – even if only in the short term)
therefore instead of saving every last pound to put towards a mortgage deposit Southampton
20 somethings choose to rent.
There is no denying the simple
fact that over the next 10 to 15 years, the people who choose to rent instead
of buy in Southampton will continue to rise.
Therefore, everyone in Southampton has a responsibility to
ensure that an adequate number of quality Southampton rental properties are safeguarded
to meet those future demands. Interestingly, what I have noticed though over
the last few years are the expectations of Southampton tenants on the finish
and specification of their Southampton rental property.
I have perceived that in the past, what a tenant wanted
from their Southampton rental property was moderately unassuming because renting
a property was only a short-term choice to fill the gap before jumping on the
property ladder. Before the millennium, wood chip wall paper and
twenty-year-old kitchen and bathroom suites were considered the norm.
However, Southampton tenants’ expectations are becoming
more discerning as each year goes by. I
have also noticed the length of time a tenant remains in their Southampton
property is becoming longer (and this was backed up recently by stats from a
Government Report), although I have noticed a tendency for many Southampton
landlords not to keep the rental payments at the going market rates - maybe a topic for a future article for my
blog?
The bottom line is this … Southampton landlords will need
to be more conscious of tenants needs and wants and consider their financial
planning for future enhancements to their Southampton rental properties over
the next five, ten and twenty years - e.g. decorating, kitchen and bathroom suites
etc etc ..
The present-day and future situation of the Southampton private
rental property market is important, and I frequently liaise with Southampton
buy-to-let investors looking to spread their Southampton rental-portfolios. I
also enjoy meeting and working alongside Southampton first time landlords, to
ensure they can navigate through the minefield of rental voids, the important
balance of capital growth and yield and ensuring the property is returned back
to you in the future in the best possible condition.
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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