Southampton Millennials Have Spent £165,977 On Rent By The Age of 35

The Millennials were born between the mid 1980’s and late 1990’s thus making them between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters who grew up with the newest tech and computers and who are huge aficionados of music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as Generation Rent, many Millennials have discovered that renting is a good choice for their shelter and accommodation needs without the hassle that comes from buying a home. Nonetheless, that is not the only reason they don’t buy property. When they should be concentrating on their profession, putting down roots and starting a family, Millennials are still going through the pressure and strain of student loan liabilities whilst, at the same time, finding it tough to pay rent.

The hot topic at the moment is the cost of renting, as both political parties have seen mileage in wooing these Millennial Generation Renters. The average rent in Southampton is currently £1,162 per month making this a big-ticket item on the monthly budget. I was inquisitive to find out exactly how much Southampton Millennials will spend on rent by the time they reach their mid 30’s. The average age people leave home in the UK is 22; so looking at a Southampton 22-year-old (or Millennial) who left home in 2005 then between 2005 and today that Southampton Millennial will have shelled out £165,977 in rent.

It’s no wonder local Millennials can’t afford to buy a Southampton home given their tremendous debt. This means younger Southampton Millennials will probably carry on renting for the foreseeable future, simply because the prospect of buying a home is not yet achievable.. that is until you look more deeply at the numbers…

Looking at the chart above, the average rent of a Southampton property in 2005 was £956 per month (pm)  … if it had risen by inflation, today, that would be £1,347 pm. As I have already mentioned in the article, today it only stands at £1,162 per month. Looking over the last 12 years, adding up all the differences between what the average actual rent was compared to what it should have been if rent had gone up by inflation, the average Southampton Millennial tenant would have paid £180,821.

This means that an average 35-year-old Southampton Millennial tenant, who has been renting since 2005, is better off by £14,845 when comparing the actual rent paid compared to what it would have been if it had risen by inflation. In a nutshell, tenants have done well due to the sub-inflation growth in rents.

In fact, if you recall I mentioned in an article a few weeks ago, the older Southampton Millennials are starting to use those savings and are gradually shifting towards home ownership. They are finally catching up with the British homeownership dream as Bank of Mum and Dad help with the deposit. Also, the scrapping of Stamp Duty from the Government starts to kick in together with the realisation that if the 5% mortgage deposit can be scrapped together (yes, 95% first time buyer mortgages have been available since 2009), it is still a lot cheaper to buy than rent, meaning this will unquestionably drive demand for Southampton homes for sale – good news for Southampton homeowners.

… and what does this mean for Southampton landlords?

Well the vast majority of younger Millennials are still renters and I foresee this to be the case for at least the next ten to fifteen years. Landlords will need to keep improving their properties to ensure they get the best tenants and they will see a much higher rent achieved. Millennials will pay top dollar for a top dollar property. It is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … because as I promised a few weeks ago, the first rule of Buy To Let Investment ….. “You are not going to live in the property yourself”

Want to know where those Southampton buy to let bargains are?  Follow my Southampton Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Southampton, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts ... would you?

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.

Blog, http://southamptonproperty.blogspot.co.uk/

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Website, https://www.belvoir.co.uk/letting-agents-southampton  

Southampton Property Market – Which Houses are Actually Selling?

Beast from the East, Russia, Facebook, Brexit, Trump, House prices up, House prices down ... the Press is full of column inches on Brit’s favourite subjects of politics, scandal, weather and not forgetting (and I appreciate the irony of this!) the property market. As an agent belonging to a national group of estate agents, talking to my fellow property professionals from around the UK, the one thing that is immediately apparent is the UK does not have one property market. It is a hodgepodge patchwork of lots of small property markets all performing in different ways.  

… And that made me think … is there just one Southampton Property Market or many?

I like to keep an eye on the property market in Southampton on a daily basis because it enables me to give the best advice and opinion on what (or what not) to buy in Southampton, be that a buy-to-let property for a Southampton landlord or an owner occupier house for a home owner.  So, I thought, how could I scientifically split the Southampton housing market into segments, so I could see which part of the market was performing the best and the worst.

I decided the best way was to split the Southampton property market into four equal size price bands (into terms of households for sale). Each price band would have around 25% of the property in Southampton, from the lowest in value (the Lowest Quartile or 25%) all the way through to the highest 25% in terms of value, the Upper Quartile.  Looking at the market, I have calculated that these are the price bands in Southampton are as follows:

·         Lowest Quartile (lowest 25% in terms of value) … Up to £180,000

·         Lower/Middle Quartile (25% to 50% Quartile in terms of value) ...  £180,000 to £230,000

·         Middle/Upper Quartile (50% to 75% Quartile in terms of value) ... £230,000 to £290,000

·         Upper Quartile (highest 25% in terms of value) ... £290,000 Upwards

So, having split the Southampton Property Market approximately into four equal sizes, the results in terms what price band has sold (subject to contract or stc) the most is quite enlightening -

Southampton	Available	Sold STC	% Sold
Up to £180,000	331	433	56.7%
£180,000 to £230,000	277	380	57.8%
£230,000 to £290,000	346	361	51.1%
£290,000 Upwards	440	308	41.2%

The results are close, but the best performing price range in Southampton is the lower end of the middle market. As I would expect, the upper quartile (the top 25%) is finding things toughest. Interestingly for Southampton landlords, the lower market is also selling well, meaning there are plenty of Southampton landlords buying properties to add to their buy to let portfolios. Even though the number of first time buyers did increase in 2017, it was from a low base and the vast majority of 20 something’s cannot buy, so need a roof over their head (hence the need to rent somewhere).

It is a fact that British (and Southampton’s) housing markets have ridden the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008. No matter what happens to us Brexit or anything else ... unless the Government starts to build hundreds of thousands extra houses each year, demand will always outstrip supply … so maybe a time for Southampton investors to bag a bargain?

Want to know where those Southampton buy to let bargains are?  Follow my Southampton Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Southampton, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts ... would you?

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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton  

10% More Southampton Home Owners Wanting to Move Than 12 Months Ago

As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Southampton and the surrounding area to keep up with demand for homes to live in (be that tenants or homebuyers), it’s good to know more Southampton home sellers are putting their properties on to the market than a year ago.

At the start of 2007 there were 2,619 properties for sale in Southampton but by July 2008, when the credit crunch was really beginning to bite, that number had risen to 4,290 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.

Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) … prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Southampton property between the end of 2007 and Spring 2009.

However, over the last five years, we have seen a gradual decrease in the supply of properties coming onto the market for sale with demand remaining steady, meaning Southampton property prices have remained robust.  A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties. Nevertheless, if you had asked me a couple of years ago, I would have said we were beginning to see there was in fact NOT enough properties coming on to the market for sale … meaning in certain sectors of the Southampton property market, house prices were overheating because of this lack of supply.

So, it is pleasing to note, looking at the recent numbers …

There are 10% more properties for sale in Southampton today than a year ago

There were 1,294 properties for sale 12 months ago, and today that stands at 1,421. It doesn’t sound a lot, yet this is a small step in the right direction to a more stable property market.

Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Southampton say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Southampton house sellers and potential house buyers, I do foresee the Southampton Property Market will show steady yet sustained improvement during the first half of 2018.

What does this mean for Southampton landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true that demand amongst FTB’s is increasing, albeit from a low base. Even with the new landlord tax rules, buy to let in Southampton still looks a good investment, providing Southampton landlords with a good income at a time of low interest rates and a roller coaster stock market.

If you are thinking of investing in bricks and mortar in Southampton, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … and don’t forget the first rule of Buy To Let Investment …..

I will tell you that 1^st rule in a couple of weeks!

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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton  

Southampton Council Tax Payers Stung by 69.0% above Inflation Rise

Buying and selling a home in Southampton isn’t the easiest or cheapest thing you will ever do. Estate Agent fees, Solicitors fees, Survey fees, Mortgage fees, Removal Van … the costs just mount up throughout every step of the move. Last week, a Southampton landlord asked me whether the Council Tax Band made a difference to a property’s appeal, be it tenanted or to owner occupiers, when it comes to being sold on the open market and whether extensions or improvements made a difference to the tax banding?

Well, like I said, the first point you should always be aware of is what Council Tax Band your new house or apartment will fall under. Being aware of this before you buy/move will help when planning month by month for life in your home (or investment). But what exactly are Council Tax Bands, and how do they affect landlords/tenants/homebuyers?

How much Council Tax you pay depends on two variables. The first is which Council Tax Band your property is in. A property is placed into a specific band depending upon what the value of the property was in April 1991 – the date when the tax band system was applied. In a nutshell, what your property is worth today has no relevance whatsoever to your banding.

Council Tax Bands have a letter of the alphabet and range from bands A-H.

The Council Tax Band values are:

Band A – up to £40,000

Band B – £40,001 to £52,000

Band C – £52,001 to £68,000

Band D – £68,001 to  £88,000

Band E – £88,001 to £120,000

Band F – £120,001 to £160,000

Band G – £160,001 to £320,000

Band H – more than £320,000

So, for example, if a property sold for £110,000 in April 1991 but is now worth £350,000 it will remain in Band E – NOT Band H), as this was the value when the bands were set in 1991. For new homes, the same thing applies: they are valued based on the 1991 market value. This safeguards that all homes and all buyers are treated equally and consistently. The second factor that determines how much Council Tax you pay is what each individual local authority decides each band will pay in Council Tax. (So for example, a householder/tenant in Leeds in a Band E property will pay a different amount in Council Tax each year to someone in Swindon or North London in Band E).

Interestingly, the average current level of Council tax paid by Southampton people stands at £1,038 per annum, up from £323 in 1993 (although if it had risen by inflation in those 25 years .. today that should only be £614) … meaning Council Tax has outstripped inflation by 69.0%. So unless the local authority changes its majority political party, the only way you can change the amount you pay in Council Tax is your banding i.e. you physically move to a higher or lower band.

Contrary to what most people think, extensions and improvements do not change the Council Tax Band and existing householders/tenants only have to pay the same Council Tax as they would have without any extensions and improvements. However, the Valuation Office (The Government’s Property Valuers) do reserve the right to re-value the extended property if the property gets sold.  If you are a potential buyer, you should be aware of this review as it could change the amount of Council Tax you pay after the purchase. If a higher band is necessary, the new band will be based on what the extended property would have been expected to sell for in 1991. However, this does not necessarily mean that the banding will jump one band, as this is contingent on the extent of the changes and whether the property falls towards the top or bottom of its existing band. More often than not – it isn’t an issue and the banding stays the same.

In terms of which band the property is in, this can be challenged. In my experience in the Southampton property market the only issue is one where there is an anomaly with the banding, when one property is in a different band to all the others in the street. This is much rarer than it used to be, as most such anomalies have been found and rectified. Anyone can check the banding of any property by going to Google and typing in “Check My Council Tax Banding”. I do need to mention a thoughtful warning though. Challenging your Council Tax Band is not something to do on a whim for one simple fact - you cannot request your band to be lowered, only 'reassessed', which means your band could be moved up as well as down. I have even heard of neighbouring properties band’s being increased by someone appealing, although this is the exception. If you have any questions don’t hesitate to drop me a line.

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.

Blog, http://southamptonproperty.blogspot.co.uk/

Facebook, https://www.facebook.com/belvoirlettingssouthampton/

Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan

Website, https://www.belvoir.co.uk/letting-agents-southampton