44% Drop in Southampton Council Houses in the Last 40 years

 ·         In 1981, 30.1% of properties in Southampton (and  Southampton as a whole) were council            houses. Today, that figure stands at 16.9%, a proportional drop of 44%.

 ·         Why has the number of council houses dropped so much in those 40 years?

 ·         How has that changed the dynamics of the Southampton property market in those 40 years?

 

The ability of local authorities to build council houses came into law in July 1919 with the 1919 Housing and Town Planning Act. It was one of the most important pieces of domestic legislation passed after WW1 and was the first time in the UK that a nationally public funded system of providing homes was made for the masses. It was paid for mostly by central government and provided by local authorities (councils) and public utility societies (which in later years became today’s housing associations). 

 

Between 1919 and 1979, 6.94 million council houses were built.

 

Just over 1 million council houses were built between 1920 and 1939, whilst 5,804,150 council houses were built between 1946 and 1979. This is compared to 4,533,440 private homes and 260,910 housing association properties in the same time frame (’46 to ’79).

So, between 1946 and 1979, the council house was the dominate force of British housing. But that all changed in 1979!

Many people believe it was Margaret Thatcher who was the architect of allowing the sitting tenant of a council house to buy their home. Interestingly, council house tenants have been able to buy their council house from as early as the mid-1930s, albeit with little or no discount. Also, as late as 1977, the Labour Housing Minster published a Green Paper extolling the virtues of homeownership and council tenants being able to buy their home at a discount.

But after the General Election of 1979, the new Tory government drafted the Housing Act 1980, which gave the Right to Buy, which became law in the autumn of 1980. Then things really took off!

This new law established a right for most council tenants who had been in their home for three years or more to a discount. The discount started at 33% and increased by 1% for each extra year, up to a maximum of 50%. If the tenant sold the house within the first five years of ownership, a prorated repayment of their discount was required.

 

Between 1980 and 1989, 970,558 council houses nationally were sold at a discount.

Yet the issue was, when a council house was sold, it took that house out of the council’s portfolio for future generations. From the start, there were limitations on local authorities’ use of monies from the council house sales as most of it had to be given to central government in London, meaning only 390,560 new council houses were built between 1980 and 1989. Looking at the numbers locally …

In 1981, there were 22,688 council houses in Southampton today it’s 16,633.

No wonder the country has a housing crisis ... yet as my regular readers know - the devil is in the detail … and that devil is the humble housing association. 

The Tory General Election Manifesto in 1979 had proposed the rights for both council house and housing association tenants to buy their own house under the Right to Buy scheme. The Conservatives argued housing associations, who obtained government funding, should be subject to the same Right to Buy proposals as councils. The Government won the vote in the Commons, yet lost the vote in the Lords, meaning housing association tenants could not buy their homes at a large discount.

At the time, there were only 400,000 housing association properties in the country, so the Government were not that worried. But the significance of housing associations developed in the 1980s and beyond as they were allowed to borrow money from the private sector.

Between 1949 and 1979, the average number of housing association properties built annually was 8,524. Since 1979 to today, it has been 25,062 per year (and 31,606 per year in the 2010s).

Also, the Government encouraged councils to transfer their remaining council houses to housing association schemes from 1986. The advantage to these ‘stock transfers’ was the Government allowed housing associations to access private funding to improve their existing properties and buy new ones (good news for existing tenants complaining that the local authority never upgraded their homes).

Moreover, the Tory Government liked stock transfers, as it allowed them to dismantle council housing from the inside. Interestingly, Labour expanded the ‘Stock Transfer’ process in 1997 and further reduced the eligibility for council tenants’ Right to Buy, meaning the number of council tenants exercising their Right to Buy declined considerably.

Meaning today, even though the provision of council housing has dropped like the proverbial stone … 

the number of housing association properties in Southampton has increased from 1,868 in 1981 to 6,234.

So, how has this changed the dynamic of the Southampton property market in the last 40 years?

Would it surprise you to learn that the number of people who own their Southampton home today is very similar to what it was 20 years ago before the property boom started? It’s just that even though we’ve had a large drop in the number of council houses and an increase in the number of housing association properties, the number of people owning their home has remained relatively stable (in some areas of Southampton this has actually increased), the significant issue is the growth of the private rented sector in Southampton.

 

It's almost as if people who used to rent from the council now rent

from a private landlord.

 

The question is, is it right for private individuals to make money from tenants who rent from them as opposed to the local authority? Or are private landlords providing better types, choices and quality of accommodation for these tenants, albeit at a higher rental rate than if they rented a council house?

I really do believe if it wasn’t for the growth of the buy-to-let landlord, which began in the early 2000s, we would have an even bigger housing crisis on our hands than the one we currently have.

Both local and central government have had their hands tied behind their backs since 2008 with a lack of funding, and it’s the humble private landlord who has stepped up and supplied in excess of 2.3 million additional rental properties since 2001, housing nearly 5,520,000 tenants. These landlords have saved the day since the big council house sell off in the 1980s!

 

What are your thoughts on this matter?

How to Be a Stress-Free First-Time Buyer in Southampton

 

Taking that first step on the property ladder is simultaneously exciting and terrifying. No matter how old you are, buying your first property will make you feel like a proper grown-up. Before you even find the right property, there’s lots to learn, so in this quick read, we’ve pulled together our top five tips for first-time buyers.

 

Be mortgage savvy

There are so many different options when buying a first home – whether you’re getting a loan from the bank of mum and dad, wading through Help to Buy admin, or going it alone. In every case, a mortgage is the first step you need to take.

For a rough estimate of how much you’ll need to borrow, there are plenty of online tools that can help. You could also speak directly to your bank or high-street lender about their mortgage deals. If you need some extra help, speak to us about a financial adviser or mortgage broker. We work with plenty of first-time buyers and have all the info you need.

 

Be real

When you first start looking, it’s important to be realistic about your budget. By looking at properties way outside your price range, you could find it harder to see the potential in those that suit your current financial situation. Get yourself a vision board and focus on the things you really need from a new home.

 

Be in the know

Newsflash: not all properties are on Rightmove or Zoopla. While these sites give you a good idea of what’s available and for how much, by registering with agents such as ourselves, we keep you in mind (and updated) before something even goes online.

There’s nearly always competition for a property, so it’s best to speak to experienced agents and register what you’re looking for instead of just relying on the internet.

 

Be open

You might have a very specific list of requirements, such as area, parking, outside space, and so on. However, it’s important to be flexible when you view a property. It might not tick every item on your list, but it may also have tonnes of potential. Always view a property before you rule it out.

 

Be calm

Once you’ve found a property, stay calm. If you’ve got your mortgage sorted, you’ve got a conveyancer, and you’re regularly in touch with your agent, there’s no need to worry. We understand there’s a lot to get done before you exchange; our job is to help you take any stress away.

 

We have served many first-time buyers at Belvoir over the years, and we’re ready to help you get your feet on the property ladder. Contact us on 02380018222 today or email me brian.linehan@belvoir.co.uk

Why Does it Take 124 Days to Get the Keys When You Buy a Southampton House?

·             -    4,224 properties have sold in the Southampton area in the last 12 months.

·             -    It only takes 54 days to sell a Southampton home, so why does it take 124 days from the sold board going up to the buyer getting the keys?

·             -    With a shortage of solicitors and a sub-standard conveyancing system, this article discusses   what Southampton house sellers (and buyers) can do to speed up the house buying process.

 

Nationally, the average length of time it takes from agreeing the sale of a property to the keys being handed over is 111 days (down from 117 days last year), yet in Southampton, we are above the national average at 124 days.

So why does it take just under 18 weeks, when all that is required is the lawyers to look at some paperwork and get a mortgage? Also, what can Southampton homebuyers and sellers do to speed this up? 

The legal process to buy and sell a UK property is called conveyancing. The conveyancing system itself hasn’t really changed in hundreds of years. After the housing market was reopened after the first lockdown in the spring of 2020, the property market returned with a bang, helped on with the stamp duty holiday.

In 2021, the number of properties selling in Southampton in some months went up massively, e.g., by 96% June 2021 and by 65% in March 2021. Many conveyancers and solicitors had to sort the legal paperwork out for upwards of 120 to 150 properties each at any one time.

 

This glut of sold properties caused by the pandemic that needed legal work to be sorted exacerbated a problem already present in the conveyancing industry.

 

For years conveyancers have complained of overwork and underpay. Conveyancing is seen as the Cinderella of the legal profession. This workload was the straw that broke the camel’s back, making many conveyancers leave the profession and go into better paid legal work like corporate work.

Also, the legal process of conveyancing has built-in inefficiencies, and the conveyancing profession has been relatively slow to innovate. However, there are some excellent tech solutions that are being slowly rolled out across the industry to make the process more efficient and effective.

 

What can Southampton home buyers and sellers do to speed up their property sale?

 

If you are buying or selling your Southampton property as we speak, you won’t be able to wait for the conveyancing profession to be revamped, yet you can be as pre-emptive as possible to get your Southampton house sale through earlier.

In a nutshell, ensure you have all the paperwork sorted on your Southampton home before you put your home on the market. Next, get the ball rolling on your mortgage. If you receive some paperwork, read it, check it, sign it and send it back in a day, do not leave it a week; finally, always communicate frequently with your estate agent and conveyancer.

When you instruct a solicitor, most will request money to start the ball rolling for searches and disbursements. They won’t lift a finger until that is paid.

You will have to prove who you are in the conveyancing process, so your conveyancer will ask you to show them proof of ID and address. If you are buying, they will need to prove you have the funds/deposit to buy the home (and if your deposit is coming from family/friends, then they are required to write a letter to that effect).

 

How can the house buying and selling process be improved?

 

A couple of years ago, the Government set up the Home Buying and Selling Group to find the answer to this problem. Chaired by the well-known property guru Kate Faulkner, it is looking at an amalgamated Seller’s Information Pack (SIPs) and an IT-based single platform to share and communicate that SIP between buyers, sellers, their conveyancers, the estate agent, mortgage providers and brokers and finally surveyors.

 

The advantage of the SIP is that it can be created before the buyer has been found, meaning property buyers would be more knowledgeable when making an offer. Also, once the sale has been agreed upon, the SIP could be sent straightaway electronically to the buyers’ legal team (from the seller’s legal team) to start the procedure of asking for searches and raising inquiries.

 

The bottom line is the conveyancing process is not fit for purpose in the 21^st century and change is on the horizon.

 

So, before the SIP becomes mandatory, there are things everyone can do to ensure they get the home of their dreams quicker.

At my agency, I recommend the seller, us as the agent and the conveyancer start to liaise with each other to get the key information on the property being sold as quickly as possible. Then once a buyer is found, I believe it is vital we, as the agent, regularly communicate with all the stakeholders in the chain to ensure everyone is playing their part to expedite the sale.

In the future, utilising technology and every agent/conveyancer preparing information upfront with the SIP will drastically reduce the time it takes between agreeing a sale and the keys/monies handed over.

 

The conveyancing process will have to change to meet the needs of the 21^st century, but how long that will take is the big question.

If you would like to chat with me about how we do things differently to ensure your property not only gets the best price and how we do all we can, as agents, to expedite a smooth sale for your Southampton property, do not hesitate to pick up the phone to me on 02380018222or drop me a line at the office on brian.linehan@belvoir.co.uk

1 in 3 Southampton Homeowners Unable to Sell

         -          The average time to find a buyer for a Southampton property reduced from 64 days in                   2020 to 54 days in 2021.

 

·                        -              Yet still, almost 1 in 3 Southampton homeowners are on the market after 12 weeks.

 

·                        -             Why are so many Southampton homes still on the market after all that time, and what                   does it mean for the Southampton property market?

 

You would have needed to have been living in a cave since the end of Lockdown No.1, not to realise the property market has been on fire in Southampton (and the UK as a whole) for the last 20 months.

It has been very much a seller’s market, especially in 2021. Yet as we enter the second quarter of 2022, I have noticed a slight rebalancing of the Southampton property market, more towards buyers, something that is good news for everyone (sellers and buyers) locally.

In 2020, it took on average 64 days from the average Southampton property appearing on the property portals (i.e. Rightmove, Zoopla etc) to the property going sold (STC).

Interesting when compared to the national average of 72 days in 2020. Yet, last year, this was reduced to 54 days in Southampton (51 days nationally).

Well, that was last year, and things have changed slightly since.

 

Of the properties for sale in Southampton 29.3% of houses have been on the market for more than 12 weeks.

 

That doesn't sound a lot, yet that is an eternity in this market!

So, why are there so many properties on the market in Southampton still for sale after all this time … it usually comes down to one thing … the practice of 'overvaluing'.

So before I explain what overvaluing is, let me give you some background.

Many agents (not just ourselves), in 2021, were achieving top prices for Southampton property with multiple offers becoming the standard. The property they were selling was only available to buy for days before the owner obtained multiple offers that were not only at a satisfactory level, yet more than they ever dreamed likely.

Although this was great news for Southampton homeowners, this caused fewer homes to come onto the market in the last six months in Southampton, as people were afraid to put their home on the market without having a property to buy.  

With fewer properties coming onto the market, some estate agents have become more and more desperate to get a larger slice of this smaller property market. It has seen an unwelcome side of the estate agency profession, the estate agency practice of ‘overvaluing’.

While ‘overvaluing’ is nothing new, the custom has been generally limited to a small number of estate agents. Yet now, it's become more prevalent and creates uncountable distress and pressure for some Southampton homeowners.

Many Southampton homeowners want to sell quickly to get the property of their dreams. Yet, in many cases, when they do put their property on to the market, they don’t sell quickly enough because of this ‘overvaluing’ (even with the fantastic current property market conditions).

To give you an idea of the issue…

64% of Southampton homes put on the market in the last 30 days have not sold.

There are hundreds of Southampton families having their dreams dashed by 'overvaluing.'

Therefore, let me look at exactly what overvaluing is, why it’s on the rise and most importantly, the harm overvaluing causes to homeowners like yourself.

You would think the most important thing in estate agency is all about finding the best buyer for your home, at the best price, who can make the move with the least amount of hassle.

To us it is, and to many other Southampton estate agents, it is as well. Yet, to some agents, sales aren’t the essential objective. Instead, it is having a vigorous catalogue of properties to sell to generate more future leads.

Deprived of an endless number of new properties for sale, the enquiries estate agents receive will significantly drop, leaving them high and dry without any buyer (or seller) leads, the lifeblood of estate agents.

Therefore, some (not all), but some estate agents will feed on a homeowner’s appetite to get the highest possible price for their Southampton home by giving them an over-inflated suggested asking price to market their property at (i.e. ‘overvaluing’).

If one estate agent can get you an extra £30,000 for your Southampton home, you will take it, won’t you?

The suggestion of pushing the asking price of your Southampton home for 10%, 15% even 20% could be seen by many as a temptation too good to miss. Yet once you are on the market, the agent is trained to slowly get you to reduce your asking price over a lengthy sole agency agreement.

The problem is that the home of your dreams might have sold by the time you reduced your price in 3 months. Also, Which reports in 2017 and 2019 proved you ended up getting less for your home when it did eventually sell (which means you lose money) and finally, the agents know homeowners perceive it’s a hassle to swap agents (which it isn’t).

But estate agents only get paid when they sell the house; why do they overvalue?

Would it surprise you that some Estate Agency chains pay their staff a commission when they put the property on to the market, not when it sells? So, their team overinflate their suggested asking prices to get that commission.

Over the last 18 months, with the rising property market, there has undoubtedly been a valid reason for pushing the envelope on the asking price. Yet, if every house like yours is on the market or sold subject to contract at £300,000 to £320,000, yours isn’t going to achieve £355,000, let alone £375,000 – even in this market.

With 64% of Southampton homes still for sale after a month, the market is starting to level out and if you are keen to sell, then let me give you some advice.

 

Research has shown that if the asking price is initially set too high, it will be ignored by people surfing Rightmove and Zoopla.

 

(Come on, be honest – you have done that yourself haven’t you?)

When the property is eventually reduced because it has the stigma of being on the property market too long (begging the question of potential buyers that there may be a problem with the property itself hence no interest?), often when it does eventually sell, it will sell for less than what it would have done if it were priced correctly from day one (as per the two reports from Which in 2017 and 2019).

Of course, on the other hand, setting the asking price below its market value means potentially leaving money on the table needlessly – hence the need for a good agent.

Putting your Southampton home or buy-to-let investment up for sale at the right price from the beginning is the key to selling within the best time frame and for the best price to a serious and motivated buyer.

Ask a handful of estate agents to value your home, ask them to back up any valuation of your Southampton home with cold hard comparables of similar properties to yours.

Find your comparables by searching ALL the property portals (i.e. Rightmove, Zoopla, Boomin, OnTheMarket).

If you only take away one thing from this article, when you search the portals for comparables, make sure you include under offer/sold STC properties, as that will triple the comparable evidence. 

Thus, by doing your homework and then working with a dependable, trustworthy and experienced Southampton estate agent, who will help to ensure that your Southampton property is put on the market to get you, the homeowner, the best price from day one without over cooking it (so you don’t lose out), you will be just fine.

These are my thoughts, let me know if you have any yourself.