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 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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