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Post lockdown, the need for Southampton
families who want bigger homes has meant Southampton homebuyers must now pay considerably
more to trade up to that larger home…
One
thing that has come out of lockdown has been the inexorable movement of Southampton
households wanting to upsize to a larger home. Often considered to be first
time buyer properties, the smaller 1st step on the property ladder
one and two bedroom properties are selling quite well yet demand for those
properties on the 2nd and 3rd step rungs on the Southampton
property ladder (i.e. the three or four bedroom homes) has been even greater.
This demand
has been driven by Southampton buyers looking for more living space, especially
those looking for an area or room to work from home (be that a bedroom,
reception room or even an outbuilding converted into a study).
The average asking price of a 3 bed Southampton home
is £284,900, whilst for a 4 bed Southampton home it stands at £393,400
As
you can see, quite a jump for an extra bedroom! The increased competition for 2nd
and 3rd step Southampton homes for that extra bedroom has pushed demand
to a record in October for those looking to take the next step up the ladder. Historically,
as a family and its household income grow, the need for more space has permanently
been the main reason for moving home, yet now there is a new need for additional
space to facilitate people working from home. This means not only do we have
growing families wanting larger Southampton homes, there are also the people
needing the same larger homes for space for a home office. So, looking at the
current stats, as you can see, the Southampton property market is doing quite
well…
60.1% of all listed 3 bed and 61.3% of all listed 4 bed
homes
in Southampton are sold (subject to contract)
Roll
the clock back to pre-Covid times and ask any Southampton homeowner who had
enough bedrooms for their children if they wanted an additional bedroom, and
most homeowners would say that was very much a ‘nice to have’, yet not a ‘must
have’. With us all being cooped-up over the spring this year, demand for
additional rooms is at a high, with those presently looking for their next larger
Southampton home are going to find that only offers close to (if not sometimes
over) the asking price will be accepted.
Even
though no properties sold during lockdown, putting the Southampton (and UK)
property market on hold for many months, many more people buying their next Southampton
home will have more than made up for it since lockdown was lifted as the
portals have stated if the UK property market remains at its existing trajectory,
then the number of properties sold YTD by the end of October 2020 will be
greater than YTD October 2019.
Yet
all these properties sold are causing another issue. Just because a property
becomes Sold Subject to Contract (SSTC) doesn’t mean the property is actually “sold”.
Before going into Covid, it was taking approximately 19 weeks from agreeing a sale
price (and instructing lawyers) to completing the sale. Yet, because we are
nationally running at 140% to 150% of properties SSTC (than we normally do at this time of year), many of my estate agents colleagues are
having to manage expectations with buyers and sellers, and tell them that the
date they are going to move will take a little longer.
The elephant in the room is that the
temporary stamp duty holiday ends on the 31st March 2021
It
sounds an age away, yet trust me, nothing could be further from the truth. Adding an extra month for the additional
homes in the bottleneck means even if the sale of your Southampton home was
agreed today, that would take us to the 3rd week in March ... that’s
cutting it very close for the stamp duty holiday.
It is
so fundamental for buyers and sellers of Southampton homes to work meticulously
with their estate agent, solicitor and mortgage lender. For example, there are
less staff in the local authorities to do the local searches, bank staff are
working from home meaning mortgages are taking much longer to get approved, and
conveyancer/solicitors are snowed under with work. Therefore, if you get a
document that needs filling in, are asked to provide documents, pay
disbursements or questions need answering, do it immediately and without delay.
A day here and day there will snowball and could mean you miss the stamp duty
holiday … and that could cost you thousands and thousands of pounds.
The
bottom line is that we haven’t seen this sort of pressure on the UK property
market since 1987, when dual-MIRAS was abolished. Now, as we are slowly
starting to come out of Covid, with many legal and banking staff working
remotely or still on furlough, the perfect storm has occurred with unprecedented
demand from buyers looking to move post lockdown. The best advice I can give is,
as soon as you put your property onto the market, find a solicitor that has the
capacity to work with you, then instruct that solicitor to start work
immediately to prepare the paperwork, so once you have a buyer, things can move
more smoothly and quickly. The last thing you want is to lose out on saving
thousands of pounds by missing the stamp duty holiday by a whisker.
If you would like to pick my brains on the Southampton Property Market – Just drop me a line on social media or email me @ brian.linehan@belvoir.co.uk you can also call me on 023 8001 8222.
If you are looking for an agent that is well established, professional and communicative, then contact me to find out how we can get the best out of your investment property.
Don't forget to visit the links below to view back dated deals and Southampton Property News.
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ReplyDeleteHi, thanks for sharing this awesome post.
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