The Halifax announced in early January that there was a
Boris Bounce in the national property market as they stated national property
values soared 1.7% in December 2019 - the biggest rise since the 1.9% month on
month rise in February 2007 (a few months before the Global Financial Crisis
aka the Credit Crunch).
Get the flags out - all hail Boris as the Conservatives gain
their landslide general election triumph - the Boris Bounce is here … or is it?
The Halifax (as well as the Land Registry and other house
price indexes) use data of property that has sold and completed (completion
being when monies and keys of homes sold are transferred). The Halifax data was
based on properties that completed in December 2019, and as anyone who has sold
or bought a Southampton property in the last 10 years knows, the time it takes
from agreeing a buying price to handing over the money is many weeks. In fact, the
average length of time between sale agreed and completion in the country is
running at 19 weeks, meaning the figures mentioned by the Halifax are for sales
agreed in July / August 2019. This growth relates to what was happening to the
property market in Summer 2019.
One of the most important things for the property market is
confidence. Interestingly, Rightmove reported a 28% surge in buyer enquiries
between the 13th December and 18th December. After a couple of years of Parliamentary
hold-up, the confidence following this general election is unquestionably a
much needed boost for the economy (and ultimately confidence), so much so,
shares in the new homes builders Barratt jumped 14% and Persimmon 12% the day
after the election, showing a property sector anticipation that the property market
is about to move forward as suppressed demand for people moving home is liberated.
Looking at the previous elections, I decided to look at what
happened to property values in Southampton in the 12 months after each
election, with some interesting results.
So, with past experience, a general election generally has a
good effect rather than a worse effect on the Southampton property market.
Looking at the rest of 2020, my intuition tells me in the
better areas of Southampton, it will likely be a seller’s market, as they will
have more influence to ask for higher asking prices from Southampton property buyers
that have placed plans to move on hold for far too long - and this could push
up Southampton property values more promptly in the short term.
Yet, as more Southampton properties come on to the market in
the usual spring rush, we could see Southampton home buyers having more choice
and thus, as supply increases yet demand remains the same, buyers will get more
power to negotiate a better deal. Irrespective of that, there is still the all-encompassing
issue that I have spoken about many times in my blog of not enough homes
being built to keep up with the number required, meaning negotiating power and
prices being inflated.
The bottom line is, the Southampton housing market will get
a slight boost from the general election. The threat of a Jeremy Corbyn
government obstructed some Southampton landlords to build their buy to let
portfolio in the later parts of 2019, so as long as sellers remain realistic
with their pricing and present their properties in the best light, 2020 in the Southampton
property market should be a year of ‘steady as she goes’.
P.S .One final thought - remember what I said about the
Halifax price Index being 5/6 months behind the times - don’t be alarmed when
they announce in the March/April/May a reduction in property values - like I
said before - this will be the prices achieved in the later parts of 2019 i.e.
not what is happening right now.
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.
Twitter, https://twitter.com/sotonbelvoir
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