The Southampton housing market is a fascinating beast and
has been particularly interesting since the Credit Crunch of 2008/9 with the
subsequent property market crash. There is currently some talk of a ‘property
bubble’ nationally as Brexit seems to be the ‘go-to’ excuse for every issue in
the Country. Upon saying that, looking at both what we do as an agent, and
chatting with my fellow property professionals in Southampton, the market has
certainly changed for both buyers and sellers alike (be they Southampton buy to
let landlords, Southampton first time buyers or Southampton owner occupiers
looking to make the move up the Southampton property ladder).
Southampton
House Values are 3.1% higher than a year ago, and the rents Southampton tenants
have to pay are 1.5% higher than a year ago
When we compare little old Southampton to the national
picture, national property values have risen by 0.4% compared to last
month and risen by 3.0% compared to a year ago, and this will
surprise you even more, as nationally, property values are 19.8% higher than
January 2015 (compared to 11.4% higher in the EU in the same time frame).
However, if we look further back...
Since 2006, Southampton
House Values are 42.7% higher, yet the rents Southampton tenants have had to
pay for their Southampton rental property are 26.4% higher
...which sounds a lot, yet UK inflation in those 12 years
has been 42%, meaning Southampton tenants are 15.6% better off in ‘real
spending power terms’.
Looking at the graph, the rental changes have been much
gentler than the roller coaster ride of property values. I particularly want to
bring to your attention the dip in Southampton house values (in red) in the
years of 2008 and 2009 ... yet as Southampton property values started to rise
after the summer of 2009, see how Southampton rents dipped 6/12 months later
(the yellow bars)…. Fascinating!
So, we have a win for tenants and a win for the homeowners,
as they are also happy due to the increase in the value of their Southampton
property.
However, maybe an even more interesting point is for the long-term
Southampton buy to let landlords. The performance of Southampton rental income
vs Southampton house values has seen the resultant yields drop over time (if house prices rise quicker than rents –
yields drop).
Whilst, it’s true Southampton landlords have benefited from
decent capital growth over the last decade –with the new tax rules for
landlords – now more than ever, it’s so important to maximise one’s yields to
ensure the long term health of your Southampton buy to let portfolio. More and
more I am sitting down with both Southampton landlords of mine and landlords of
other agents who might not be trained in these skills - to carry out an MOT
style check on their Southampton portfolio, to ensure your investment will meet
your future needs of capital growth and income. If you don’t want to miss out
on such a MOT check up, drop me a line – what have you got to lose? 30 minutes
of time against peace of mind - the
choice is yours.
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.
Twitter, https://twitter.com/sotonbelvoir
LinkedIn, https://www.linkedin.com/in/brianlinehan
LinkedIn, https://www.linkedin.com/in/brianlinehan
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