The Affordability of Buying Property in Southampton

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Looking back at the 75^th Anniversary of the D-Day landing a few months ago, it reminded me of the huge changes that have happened to Southampton and more specifically the Southampton property market since WW2. Back in 1946, the average wage in Southampton was just over £5 a week and to buy an average car would cost you just under £600, yet this is a property blog, so...

The average value of a Southampton property in 1946 was £1,217

In fact, in those 75 years, the average Southampton house had doubled in price by 1961, then again in 1971, 1975, 1980, 1988, 2000 and 2006. Now a lot of those increases (especially in the 1970’s) were caused by hyperinflation, yet since the start of the 21^st Century inflation has been kept low and since the Credit Crunch (2008/9), whilst property values have been rising, they haven’t been at the rates experienced in the latter half of the 20^th Century.

Now what a property sells for is irrelevant, its whether someone can afford it.

Increases in Southampton property values have produced huge increases in equity for many Southampton homeowners and Southampton buy to let landlords, yet on the other side of the coin also making housing unaffordable for other people. The best measure of the affordability of housing is the ratio of Southampton property values to Southampton average earnings (i.e. salary/wages). The ratio works on the basis the higher the ratio, the less affordable properties are.

In 1997, the average value of a Southampton property was 3 times higher than the average annual wage in Southampton, in 2007 it peaked at 6.4, yet two years later it had dropped to 5.4 and since then has slowly risen to 7.7 times higher!

It can be seen that even though property in Southampton became more affordable after the 2007/8 property crash (i.e. the ratio dropped), in subsequent years, with house values rising but earnings/salaries not keeping up, the ratio started to rise. This has meant there has been a decline in affordability of property in Southampton over the last five years - so for those on particularly low incomes or with little capital, it unfortunately means that buying a Southampton home will never become an option.

Therefore, the demand for private rented properties in Southampton will continue to grow as many young Southampton people are deciding to rent instead of buy their own house (knowing when their parents pass away, the equity built up in their parents property will be passed down - and then they can buy in their 50’s and 60’s - just like it happens in Germany).

Yet, that is many decades away and with fewer Southampton people wanting or able to save up the 5% deposit required by mortgage lenders, more and more people are looking to rent. Tie this in with the subtle shift in attitudes towards renting since the Millennium and less people jumping the on the bottom rung of the property ladder, this has driven rents and demand up in Southampton over the last few years. Yet (and it’s an important proviso) the type, location and demands of Southampton tenants has changed over that same time frame meaning you can’t just make money from buy to let as easily as falling off a log like you did in the early 2000’s.

If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email. 

If you are looking for an agent that is well established, professional and communicative, 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  

The Southampton Monopoly Board

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Board games seem a thing of the past for youngsters nowadays with their consoles and mobile phones yet a family favourite in our household that will bring young and old together is Monopoly.

Mayfair is the square everyone wants to buy and whilst it is the most expensive to buy – it offers the greatest returns. Mayfair was the must have London address when the Monopoly board game was made in 1935 when, at the time, it was the most expensive street to buy houses at £400 each. A member of my family asked me what a property today would be worth in Mayfair and how much it would cost to buy them all. Readers will know I like a challenge. My research shows that a typical house in Mayfair today costs on average £2.8m - whilst the total value of all the property in the Mayfair area currently stands at £11.8bn.

The fun part of Monopoly was to build more houses and ultimately a hotel to extract the maximum rent from the other players who landed on the square. That made me think, instead of looking at the average value of a property on the street, what if we looked at the total value of property on the whole street. So, I carried out some research on all the 216 streets in SO14 and calculated the top 20 streets in terms of their total value of all properties on the street..  and just for fun, colour coded them as if they were on a Monopoly board  …

Mayfair and Park Lane are represented by Channel Way and Ocean Way .. no surprises there, yet there are some surprises in the mix including Golden Grove and St Marys Road. They are rightly in the list because of the sheer size of those streets; because whilst the value of those homes are much lower than the posher streets, the total value of the whole street means they make the top 20 list.

Now of course whilst drawing a comparison between a 1935 board game and the actual total house values on those Southampton streets and roads provides a light hearted point of view of the Southampton property market, it does present a credible picture of Southampton’s most popular streets. Next time I will get back to writing an article with a little more seriousness and deeper issues on the Southampton housing market … but this week, I hope you enjoyed my little bit of fun!

If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email. 

If you are looking for an agent that is well established, professional and communicative, 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  

Only 40.4% of Southampton Households are Eco-friendly

Improving the energy efficiency of Britain’s 27.2 million homes, which are responsible for more than a quarter of the country’s CO2 and other greenhouse gas emissions, is seen as key to tackling the issues of climate change, fuel poverty and our country’s energy security. This is particularly important as in June the Government announced they were going to make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retro-fitting to meet these ambitious climate targets.

Researchers at Nottingham Trent University said it would cost on average £17,000 per property to retrofit an average UK home to make it carbon neutral with renewable energy and insulation (if done en masse and not piece meal). That would cost the Country £462.4bn (interesting when the NHS costs £154bn per year). Now of course 22.7m homes are privately owned so that would be the responsibility of the owners, but if we look at publicly owned council housing, that would cost the Government in excess of £76.5bn - HS2 is ‘only’ £56bn!

The benefits of making homes carbon neutral go further than saving the planet, as occupants would have much lower gas and electric bills (which total £31.824bn per year), warmer households and a much-lower strain on the NHS, which currently spends about £848m a year treating conditions that arise from cold housing. Also, local authorities would have to spend a lot less than the £5.2bn a year for ongoing property maintenance by the installation of extra insulation and renewable energy such as ground source heating, wind or solar panels.

To improve efficiency ratings, last year the Government banned landlords from renting property with an energy performance rating of F and G (the lowest ratings), yet I don’t think there is an appetite to force private homeowners to do this work (although you never know in the future??). Homeowners would be unenthusiastic to take on the bother and cost of such building works, yet the Government could offer incentives and grants, which along with the funds saved on their energy bills could make the plan more appealing?

So, what about eco credentials of the properties of Southampton homeowners and landlords?

Every home that has been built, rented out or put on to the market in Southampton since 2007 has had to have an Energy Performance Certificate (E.P.C), giving it a rating between A and G (rather like those stickers you see on fridges and washing machines). A is highest rating (i.e. most efficient and greener) and G is the worst energy performance rating. So, looking at Southampton first, then comparing us to the rest of the UK, this is the result...

  

  

So, 40.4% of Southampton homes are in that eco-friendly A to C energy performance banding ratings, which is proportionally 8.84% higher than the national average.

So, what next? Well the Government will endeavour to make the green revolution as painless as possible with technology developments like LED light bulbs, for example, saving greenhouse gases without people noticing. In the future we might have hydrogen central heating instead of mains gas, all have solar panels for electricity, all triple glazed windows and even ground sourced heating ... sounds pie-in-the-sky? Well who would have thought some of the most wanted cars would be electric and hybrid 10 years ago, built by the likes of Tesla?

There is no doubt that the energy efficiency of a property will rise in the coming years as the cost of fuel and people’s opinion on going green changes. You don’t need to spend £17,000 to find out what you can do to make your property greener. Look at your E.P.C and it will tell you what small changes you can make to improve your Southampton home’s energy efficiency rating and ultimately save yourself money.

If you want to find your E.P.C rating of your Southampton home, go to www.epcregsiter.com

If you would like to pick my brains on the Southampton Property Market – pop in for a coffee or drop me a line on social media or email. 

If you are looking for an agent that is well established, professional and communicative, 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  

What's in a Southampton name?

I recently went to a local landlord gathering in Southampton, i met with some of the local landlords and we had general conversations about the amount of different Estate Agents in Southampton and what landlords expect from there Estate Agents, what I found was a lot of agents concentrate so hard on trying to win new business, that as soon as they have won a new landlord over and rented out their property, they pretty much forget about them and start the chase all over again. Wouldn't it be great if they took the time to at least get to know your name, your preferences regarding your property management style and what makes you feel comfortable as a landlord?

With almost 300 properties on our books and over 80 landlords, we are always in contact with a vast number of those people about one thing or another, and where one landlord might be quite liberal and easy going towards the actions of his tenants, another may well have stricter standards – for example, some will allow tenants to decorate to their own style, fix furniture to walls or undertake other improvements such as fitting extra radiators yet another landlord might not allow any of this, with the property having to stay magnolia and with a limited number of picture hooks put into the walls. This is where knowing your landlords and their preferences adds a personal touch, because as the agent we can then take a lot of the strain and buffer many of the requests that we get from tenants.

So if we get a request for a new fridge for one of Deans properties we already know his answer and how to handle it, whereas for Jane her answer and approach will be different, and on any given day when Kevin calls we immediately know his voice, where his properties are, what his tenants are like and the on-going issues and relationships he and they both have, and all of this means we can tailor our approach towards the very specific nature of the matter at hand and the people involved. We can do this because all of our staff are located in one location, and we are all constantly over-hearing and getting involved what is going on within all of the other roles within the office - there is no outsourcing to a remote call centre, no subcontracting of responsibilities, and you can always reach the same person who has been dealing with an on-going issue at any time.

We don’t offer a ‘one size fits all’ approach because clearly we are all different, the properties are of varying age, condition and specification, and sure as anything we get to see the whole spectrum of human nature demonstrated by tenants (which is in itself a whole blog article for the future). If you were to call your existing agent today, out of the blue, would they have a good enough relationship with you that they could already pre-empt your requests and the way you would like such an outcome to be achieved? Would they even remember your name?

You see, as someone made clear to me some time ago, being an Estate Agents is not just about property but is more about people and personality, because who would you trust to look after your best interests – someone in it purely for the money, or someone prepared to dedicate the time and effort to building a relationship with you such that trust, confidence, and ultimately a smooth transaction will naturally follow?

If you are looking for an agent that is well established, professional and communicative, 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.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH

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