The long-lasting issue of the Southampton property market
are laid bare as the final 2018 property transaction figures have just been
published and they continue the post credit crunch trend of less people moving.
34.3% less of Southampton people are selling their
homes annually since the credit crunch, when compared to the post Millennium
years of 2000 to 2005
This is not just an issue of the Southampton housing market
slowing down since the credit crunch - the challenge is to split out
shorter-term factors such as Brexit and the elections from longer-term
structural issues of the UK society, because when these most recent property
transaction figures are seen against longer-term trends for Southampton, they
suggest more significant issues in the Southampton housing market.
In the late 1990’s, 4,586 properties were sold annually in the
Southampton area, then in the same area, the Millennium boom saw transactions
rise to 5,295 per annum. Property sales then more than halved to 2,628 per
annum in the challenge of the global financial crash and subsequent retrenchment
of the mortgage market. Post credit crunch (2012 and beyond) locally, on
average, 3,471 properties have sold annually.
So, whilst there was a recovery from 2013 onwards, it was
rather uninspiring when compared to the pre-credit crunch years, with a lacklustre
performance in property transactions since mid 2010’s.
You might ask why we should be concerned about the
number of property transactions and not the change in property values?
The number of transaction numbers are a far more exact
bellwether for the health and potency of the local housing market.
As less people have been selling their homes locally, this
is not only bad for the Southampton housing market but for the economy locally,
especially when you consider how many allied businesses (builders, decorators,
solicitors, removal vans, estate agents, mortgage arrangers and other people)
lose out as a result.
Some say the deficiency of supply of property, mainly
affordable first-time buyer property, is the chief reason why transaction
figures remain stubbornly low. Others suggest the absence of suitable housing
stock up the property ladder (particularly bungalows for the older generation),
combined with rising demand, is causing a bottleneck in our local housing
market.
I know there has been much talk from Westminster about grand
home-building programmes, yet we now require them to deliver on these undertakings
and even then, it will be a few decades before we see a seismic change in the Southampton
property market.
In the short-term, a quicker improvement may come from modifications
to stamp duty. First time buyers don’t need to pay Stamp Duty up to a certain level,
yet those Stamp Duty concessions could be extended to those mature homeowners looking
to downsize. This could liberate a meaningful number of mature family homes
occupied principally by these mature generation and the tax lost through Stamp Duty
could be replenished by a revaluation of the Council Tax bands?
Council Tax bandings were set in 1991 and the seven bands,
the highest band starts at £320,000 (based on 1991 values). It seems irrational
to us that upper value band, set in the 1991 revaluations, has not been
increased, particularly as house prices in London have risen by over 400 per
cent during in the last 25 years.
That would mean higher tax for those who don’t move yet less
tax for those that do move - because we believe it would boost a far more liquid
Southampton property market.
Just a thought of mending the local property market - what
are your thoughts?
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.
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