Southampton Homeowners Have Made an Annual Profit Of £8,494 Since the Millennium

As we go full steam ahead into 2019, it’s certain that the Southampton housing market in 2018 was a little more restrained than 2016 and 2017 and I believe this will continue into 2019. Property ownership is a medium to long term investment so, looking at the long-term, the average Southampton homeowner, having owned their property since the Millennium, has seen its value rise by more than 168%.                                                                                                                                                                 

This is important, as house prices are a national obsession and tied into the health of the UK economy as a whole. The preponderance of that historical gain in Southampton property values has come from the growth in Southampton property values, while some of it will have been enhanced by extending, modernising or developing their Southampton home.

Taking a look at the different property types in Southampton, and the profit made by each type, makes interesting reading..

However, we can’t forget there has been just over 60% inflation over those 18 years, which eats into the ‘real’ value (or true spending power of that profit) … so if we take into account inflation since 2000, the true spending power of that profit has been lower.

So the ‘real’ value of the profit, after inflation, in Southampton has been £5,185 per year.. still nothing to sniff at.

I wanted to show you that even though we had the 2008/09 Credit Crunch property market crash where, depending on the type of Southampton property, property values dropped between 15% and 20% in 18 months … Southampton homeowners over the long term are still better off than those renting.

Moving forward, the question I get asked time and again is what will happen in the future to the Southampton Property market? Irrespective of what is happening in the World, Europe or even Central London, the biggest factor over the medium to long term to ensure that this level of house price growth is maintained in Southampton is the building of new homes both locally and in the country as a whole. Whilst we haven’t had the 2018 stats yet, Government sources suggest this will be nearer 180,000 to 190,000, a decrease from the 2017 figure of 217,350 new households being created. When you consider that we need to build 240,000 households to equal demand (immigration, people living longer, higher divorce rates and people co-habiting later in life etc) … demand will outstrip supply and unless the Government start to spend billions building council houses .. this trend will continue for years (and decades to come).

Another factor is that whilst Southampton landlords have been hit with higher taxes to enable them to actually be a landlord most, in every national survey, still intends to increase their portfolio in the medium to long term. The youngsters of Southampton see renting as a choice, giving them flexibility and options that being tied to a home cannot give… thus meaning demand will continue to grow and landlords will be able to enjoy increased rents and capital growth, although those very same Southampton buy to let landlords will have to work smarter in the future to continue to make decent returns (profits) from their buy to let investments. Even with the tempering of house price inflation in Southampton in 2018, most Southampton buy to let landlords (and homeowners) are still sitting on a copious amount of growth from previous years.

The question is, how do you, as a Southampton buy to let landlord, ensure that continues?

Since the 1990’s, making money from investing in buy to let property was as easy as falling off a log. Looking forward though, with all the changes in the tax regime and balance of power, making those similar levels of return in the future won’t be so easy. Over the last ten years, I have seen the role of the forward thinking agents evolve from a person collecting the rent to a more all-inclusive role; I call it, ‘strategic portfolio leadership’. Thankfully, along with myself, there are a handful of agents in Southampton whom I would consider exemplary at this landlord portfolio strategy where they can give you a balanced structured overview of your short, medium and long-term goals, in relation to your required return on investment, yield and capital growth requirements.

If you would like such advice, speak with your current agent or alternatively – whether you are a landlord of ours or not – without any cost or commitment, feel free to drop me a line and drop in for a coffee and a chat.

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@belvoir.co.uk 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/belvoirsouthampton/

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

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

Live in Southampton? About to Retire and Privately Rent? You Could be £9,600 a Year Worse Off!

You read the personal finance pages of the newspapers and it all seems to be the impending pensions crisis ... where people aren’t saving enough for their retirement. But it’s not the lack of Southampton peoples’ future pension incomes that are my immediate concern. The fact is that so many of the future retirees in Southampton over the coming decade, who never bought their home in the Millennial years of the 1990’s and 2000’s, will have to make some tough decisions regarding what house they live in when they retire anytime between now and 2038.

In Southampton, there are 2,471 privately rented households, where the head of the household is between 50 years and 64 years of age (meaning they will be retiring anytime between now and 2038). They are working now and easily paying the rent, yet what happens when they retire?

A Southampton retired couple, who currently privately rent and who have paid their fully qualifying NI stamp over the last few decades are likely to retire with the couples State Pension of £1,091 per month plus a tiny bit of private pension if they are lucky. Given that the average rent in Southampton is £1,306 a month - a lot of that pension will be lost in rent. This means taxpayers will have no alternative but to step in and top up the rent payments with Housing Benefit, yet...

The maximum housing benefit for a couple in Southampton is currently £504.96 per month … leaving a significant gap when you consider the average rent in Southampton is £1,306 per month

It is most people’s opinion that retirees are either council tenants or own their home outright. Looking at these figures though, it looks like both these ‘mature’ private renters could be having to make some decisions on their lifestyle and where they live, possibly looking at downsizing the home they rent to make things more affordable in their old age. Also, the government will be in for a horrible surprise as more of Southampton people retire and continue to rent from a private landlord. Numerous Southampton private renters, with little or no savings, will have to rely on Housing Benefit, which will put greater pressure on the public purse.

The average Southampton retiree will need to find £9,612 pa to stay in their privately rented home after retirement

A recent report from Scottish Widows suggested that 1 in 8 OAP’s will be privately renting by 2032, up from the current one in 15.47 OAP’s whom currently private rent (or 6.47%). In fact, in that report they said the equivalent of more than one-third of the whole annual NHS budget would be spent on Housing Benefit for OAP’s in retirement living in private rented property.

What does this mean for mature Southampton homeowners? I see many using equity release schemes to stay in their homes to pay for a better retirement and others more open to downsizing, selling their large home to a family that needs it and moving into a smaller apartment or bungalow ... yet lets be frank - they aren’t building bungalows in large numbers in Southampton anymore.

And for the Southampton landlords? Well with the younger Millennials showing no appetite in jumping onto the homeownership bandwagon anytime soon, it can only result in the demands on the buy to let market from Southampton tenants rising substantially. Of course, many Millennials will inherit money from their home owning parents in the coming few decades, yet a lot won’t as it will be spent on nursing home care and any leftovers (if any) split between siblings.

For those retiring in post 2050/2060, there is better news as official reports suggest those retirees will enjoy a State Pension approximately similar to today’s pensioners with auto-enrolment into top-up private pensions through their employer.


The solution to all this is to build more homes, of course. Last year we created/built just over 217,000 households in the UK, up from a post Millennial average of just under 150,000 households a year. We need to get back to the building booms of the late 1960’s and early 1970’s when on average 300,000 households were built ... but back to reality ... that won’t happen so it looks like we are turning into a nation of renters, which is of course good news for Southampton buy to let landlords!

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@belvoir.co.uk 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/belvoirsouthampton/

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

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

Our Buy 2 Let Deal of the Week yields 6%

This one bed flat has just come on the market. It is well located at the city end of Hill Lane and a short walk to the Central Train Station and the city core. It is located on the first floor, has been recently modernised and has parking. This location will appeal to a wide tenant pool and will let well at £650 per month. From an investment point of view you have a share of the freehold and your service charge is only £45 per month. Gross yield will be 6% and after direct property costs it will be 5.6%. Well worth a look. Full details can be found here: https://www.rightmove.co.uk/property-for-sale/property-59436765.html

Top 25 Most Saleable Streets in S018

Following on from my last article, if you recall I said that Midanbury Lane had the most properties sold in the SO18 Southampton postcode, yet I felt that this information wasn’t telling the whole story, as some roads in Southampton have more properties on them than others. Therefore, I promised that I would compare the average number of properties sold by the actual number of properties on that street, to find out the streets whose owners proportionally moved (or sold) more often than the rest of the locality.

To give some foundation to the article, in 2017 Southampton homeowners had, on average, lived at their existing address for 17 years and 6 months. However, when I looked at the difference between homeowners with and without a mortgage; Southampton homeowners without a mortgage had lived in their Southampton home for an average of 23 years and 9 months compared with 10 years and 1 month for homeowners with a mortgage. Interestingly, Southampton’s Council own tenants have on average resided at their present homes for 11 years and 4 months, whilst finally for those who rent from a private landlord, tenants generally have lived in their property for an average of 3 years and 11 months (up from 3 years 5 months only five years ago).

The SO18 street in the top 25 saleable streets with the highest number of households on it is Bitterne Road West, which has 358 residential addresses. Yet since 1995, only 231 properties have changed hands (some multiple times!)  .. which means the street’s saleability or churn rate is 64.5%.

However, the street or road that has the highest saleability or churn rate is Torridge Gardens … which has 72 households on it, yet since 1995 there have been 179 house sales … a saleability rate of 248.6%. Here is the full breakdown of the top 25 streets …

So, as you can see, some interesting statistics and a lot more correlation between saleability rate and property values (unlike the article last time where we compared value to ‘out and out’ raw sales figures).

Therefore, what does all this mean to Southampton homeowners and Southampton landlords?  Well these 25 streets are the best performing streets out of the 338 streets in the SO18 area so if you live/own a property on those 25 streets … you are sitting on a very saleable street. If you want to find out how saleable your street is .. please drop me a line and we can discuss this further.

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@belvoir.co.uk 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/belvoirsouthampton/

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

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

5 Reasons Why Southampton High Street Estate Agents are Better Than Internet Estate Agents

  

There doesn’t seem to be a week going by that a new online call centre based estate agency opens offering unbelievable services at quarter of the price, implying their service is just as good as the so called ‘expensive’ high street agents.

1. Online Agents are not No Sale No Fee.

On the face it .. a similar service for a quarter of the price sounds fantastic! Who doesn’t want to spend less on agent fees when trying to sell their Southampton home? Yes, the fee is lower, but you will have to pay it upfront (or defer it for up to 10 months but still have to pay) whether yur property sells or not.

2. Online Agents Hidden Extras.

The eye-catching low fees for these call-centre online agents are, on the outside, attractive but when you dig a little deeper you find that the low fee is not all it appears to be. Add-ons can include extra for paying accompanied viewings, floor plans, listing on Rightmove or being forced to use their call centre solicitors at the other end of the Country.

3. Experienced Estate Agents.

Call centre online agents are what they say they are on the tin – online, and the majority if not all of your negotiations and communications will be with the folks in the agent’s national call centre. Do you want the sale of your largest asset handled by someone sitting in a call centre 200 miles away from the property as they attempt to sell, without that all vital local market knowledge? I have to ask, how can these online agents know about your home, school catchment areas etc., and the locality in Southampton.

4. Local Knowledge of Southampton.

If you’re selling your home in Southampton it pays to choose an agent with local knowledge of the Southampton market. Every Southampton High Street agent is aware of the Southampton market trends and most importantly sensible pricing structures for the area.

5. Getting the Best Price for Your Home.

The High Street agent fee is a huge incentive for them to get it right for you – first time. At Southampton, we meet all of our clients to discuss a realistic market price for their Southampton property. We never offer to market properties for more than their true market value – a ploy some online call centre based estate agents do in an attempt to win your property – but this guarantees that when your property does go onto the market for the first time (the most important time), it gets little or no interest as buyers know their prices and can’t be fooled. Our fee ensures that you receive the very best service from us – it is totally in our best interest to find the most suitable buyer for your home and get them to pay the best price for it.

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@belvoir.co.uk 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/belvoirsouthampton/

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

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