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Wednesday 18 April 2018

Southampton Property Market Worth More Than BAE Systems

The value of all the homes in Southampton has risen by more than 247% in the past two decades, to £18.927bn, meaning its worth more than the publicly quoted company BAE Systems, which is only worth £18.237bn!

Those Southampton homeowners and Buy-to-Let landlords who bought their homes twenty or more years ago have come out on top, adding thousands and thousands of pounds to the value of their own Southampton homes as the younger generation in Southampton continue to be priced out of the market.  This is even more remarkable because, in those twenty years, we had the poor years of 2008 and 2009 following the global financial crisis, where we saw a short term drop in Southampton house prices of between 15% and 20% (depending on the type of property). And thankfully given that there have been a number of consecutive years of growth in property values recently in Southampton, we are now well above the 2007 levels in most cases.

Twenty years ago, the total value of Southampton property was worth £5.442bn. Over those twenty years, total property values have increased by £13.485bn( a 247% increase)  meaning today, the total value of all the properties in Southampton is worth £18.927bn. Even more remarkable, when you consider the FTSE100 has only risen by 40.84% in the same time frame. Also, when I compared it with inflation, i.e. the UK Retail Price Index, inflation had risen by 72.2% during the same twenty years.

So, what does this all mean for Southampton?  Well as we move through the unchartered waters of 2018 and beyond, even though property values are already declining in certain parts of the previously over cooked central London property market, the outlook in Southampton remains relatively good as over the last five years, the local property market has been a lot more sensible than central London’s.

Southampton house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with persistent immigration and population growth.  Secondly, with 0.5% interest rates, borrowing is still cheap and finally, the simple lack of new house building in Southampton. Not even keeping up with current demand, let alone eating into years and years of under investment mean only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Southampton has and always will, ride out whatever dark clouds are on the horizon.

In the coming weeks, I will look in greater detail at my thoughts for the 2018 Southampton Property Market. As always, all my articles can be found at the Southampton Property Market Blog 

If you are looking for an agent that is well establishedprofessional andcommunicative, then contact us to find out how we can get the best out of your investment property.

Email me on or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

Wednesday 11 April 2018

Homeownership Amongst Southampton’s Young Adults Slumps to 41.05%

The degree to which young Southampton people are locked out of the Southampton housing market has been revealed in new statistics.

A Southampton landlord was asking me the other week to what effect homeownership rates in Southampton in the early to middle aged adult age range had affected the demand for rental property in Southampton since the Millennium. I knew anecdotally that it affected the Southampton rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.

As anyone in Southampton, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.

In the year 2000, 41.6% of Southampton 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 22.2% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38-year Southampton person (therefore born in 1962) would have a 61.4% chance of owning his or her own home and a 38-year-old today in Southampton (born in 1980) would only have a 47.8% chance of owning their own home.

Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Southampton has reduced from 56.77% to 41.05%

If you look at the graph below, you will quite clearly see the changes since the Millennium in Southampton homeownership rates has proportionally fallen the most for the youngest (25-year olds to 29-year olds) age range compared to the other age ranges.


The landlord suggested this deterioration in homeownership in Southampton across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.

I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above.  Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.

So, what does this mean for the rental market in Southampton?

Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Southampton landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Southampton rental market .. drop me line or pop in next time you are passing my office.

If you are looking for an agent that is well establishedprofessional andcommunicative, then contact us to find out how we can get the best out of your investment property.

Email me on or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

Wednesday 4 April 2018

1,576 First Timer Buyers in Southampton Bought Their First Home in 2017

A little bit of good news this week on the Southampton Property Market as recently released data shows that the number of first time buyers taking out their first mortgage in 2017 increased more than in any other year since the global financial crisis in 2009. The data shows there were 1,576 first time buyers in Southampton, the largest number since 2006.

I expect in 2018 that this increase of first time buyers will level out and maybe dip slightly as, nationally, figures demonstrate that first time buyer’s average household income was £40,691 and this represented 17.3% of their take home pay. Although, it might surprise readers that it is actually cheaper to buy than it is to rent at the ‘starter home’ end of the housing market. Many of you can remember mortgage rates at 12% ... even 15%. Today, at the time of writing this article, I found on the open market, 189 first time buyer mortgages at 95% (meaning only a 5% deposit was required) with 3 year fixed rates from a reputable High Street bank at 2.49% ... they even did a 3 year fixed rate 100% mortgage for 2.89%!

Interestingly, looking at the other end of the market, the buy-to-let investment in Southampton was subdued, with only 323 buy-to-let properties being purchased with a mortgage. However, I must stress, whilst there is no hard and fast data on the total numbers of landlords buying buy-to-let, as HM Treasury believes only 30% to 40% of buy-to-let property is bought with a mortgage. This means there would have been further cash only buy-to-let purchases in Southampton – it’s just that the data isn’t available at such a granular level.

In terms of the level of mortgage debt in Southampton, looking specifically at the SO14 to SO19 postcodes, you can see there has been a steady rise in borrowing over the last few years.

This is pleasing to see, as new mortgage debt is created by first time buyers, buy-to-let landlords and home movers themselves, that is being roughly equalled by the amount being paid off by mature mortgaged homeowners in their 50’s and 60’s eventually getting to pay off their mortgage.

So, what does all this mean for the Southampton Property Market?  Well, the stats do paint a picture, but they don’t inform us of the whole story. The upper end of the Southampton property market has been weighed down by the indecision around the Brexit negotiations and the rise in stamp duty in 2014, which made it considerably more expensive to buy a home costing more than £1m. The middle part of the Southampton property market has been affected by issues of mortgage affordability and lack of good properties to buy, as selling prices have reached the limit of what buyers can afford under existing mortgage regulations. The lower to middle Southampton property market was hit by tax changes for buy-to-let landlords, although this has been offset by the increase in first time buyers.

If you are in the market and selling now and want to ensure you get your Southampton property sold, the bottom line is you have to be 100% realistic with your pricing from day one and you might not get as much as you did say a year ago (but the one you want to buy will be less – swings and roundabouts?). I know it’s not comfortable hearing that your Southampton home isn’t worth as much as you thought, but Southampton buyers are now unbelievably discerning.

So, if you are thinking of selling your Southampton property in the coming months, don’t ask the agent out a few days before you want to put the property on the market, get them out now and ask them what you need to do to ensure you get maximum value in the shortest possible time. I, like most Southampton agents, will freely give that advice to you at no cost or commitment to you.

If you are looking for an agent that is well establishedprofessional andcommunicative, then contact us to find out how we can get the best out of your investment property.

Email me on or call on 023 8001 8222.

Don't forget to visit the links below to view back dated deals and Southampton Property News.