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Thursday 28 December 2023

Southampton Property Market: Which homes are selling the best?


Inflation, interest rates, house prices down, house prices up ... the newspapers are full of column inches on Brit’s second favourite topic - the property market (the first being the weather obviously!).

Those of you that read my articles on the Southampton property market know I like to look further afield to compare the Southampton market with the regional and national markets. The one thing that is immediately apparent is that the UK does not have one property market.

House prices are up in one region of the UK, yet down in another. It is a hotchpotch patchwork (almost like a fly’s eye) of lots of small property markets all performing in different ways.  

… and that made me think …

Is there just one Southampton property market or many?

So, I decided to dive into the dynamics of the Southampton housing market, to see if it operates as a singular entity or if the diverse price ranges significantly influence a property's saleability.

This curiosity stems from the observation that properties, much like a spectrum, range from modestly priced to premium priced. Such variations in pricing could potentially carve out distinct segments within the market, each with its own trends and buyer behaviours. I decided the best way was to split the Southampton property market into four equal sized distinct price ranges, each representing a unique slice of the market.

Imagine the entire range of house prices as a four-layer cake.

The lowest quartile forms the base layer, representing the most affordable 25% of homes – these are typically the most accessible for first-time buyers and buy-to-let landlords. Next up is the lower middle quartile, the second layer, encompassing properties priced between the 25th and 50th percentiles. These homes offer a step up in features, style or location while remaining within a moderate price range.

Ascending further, the middle upper quartile, the third layer, includes homes priced between the 50th and 75th percentiles, appealing to buyers looking for more amenities or premium locations. At the top sits the upper quartile, the cream of the crop, representing the most expensive 25% of properties in Southampton. These homes are often luxurious, boasting high-end features and coveted locations, and are sought after by those who desire the best the market has to offer.

By segmenting properties into these quartiles, we gain insight into their saleability and can tailor strategies to target buyers effectively within each segment.

These are the quartile/house price bands for Southampton:

·       Lowest Quartile - (0 to 25% quartile in terms of value) - Up to £180,000

·       Lower Middle Quartile - (25% to 50% quartile in terms of value) - £180,000 to £270,000

·       Middle Upper Quartile - (50% to 75% quartile in terms of value) - £270,000 to £375,000

·       Upper Quartile - (highest 25% quartile in terms of value) - £375,000 upwards

So, having split the Southampton property market approximately into four equal sizes, the results in terms of what price band has sold (subject to contract or stc) the most is quite enlightening –



Sold STC

% Sold

up to £180,000




£180,000 to £270,000




£270,000 to £375,000




£375,000 upwards





The statistics across various price ranges present an interesting pattern. For properties priced up to £180,000, there are 370 available, with 427 already sold subject to contract (STC), representing a 53.6% sale rate.

In the next price band, £180,000 to £270,000, there are 368 properties available, with 536 sold STC, accounting for a 59.3% sale rate.

The £270,000 to £375,000 range shows 356 properties on the market, of which 515 have been sold STC, indicating a 59.1% sale rate.

Lastly, for properties priced at £375,000 and upwards, there are 378 available, with 298 sold STC, resulting in a sale rate of 44.1%.

The best performing price ranges/quartiles in the Southampton area are the lower middle quartile and middle upper quartile markets, with the upper quartile (the top 25%) range finding things tougher.

In analysing the Southampton property market, it's clear that the dynamics are multifaceted and cannot be neatly categorised under a single umbrella.

The market's behaviour is akin to a kaleidoscope, with each turn revealing a different pattern based on the price segment. This diversity in performance across various price bands/quartiles is indicative of a market that caters to a wide spectrum of buyer preferences and financial capacities.

The most illuminating insight from this investigation is the relative success of different price quartiles.

The lower middle and middle upper quartiles, encompassing homes between £180,000 and £270,000, have shown remarkable resilience, with a high percentage of properties going under contract.

In contrast, the upper quartile, representing the most expensive homes, faces a more challenging landscape. With a lower percentage of homes sold, this segment could be experiencing a slowdown, possibly due to its limited buyer pool or the broader economic factors affecting higher-end property investments and underlines the need for realistic pricing.

This disparity in market performance underscores the importance of understanding Southampton's property landscape through a segmented approach.

By recognising the unique characteristics and demand drivers within each quartile, estate agents, buyers, and sellers can make more informed decisions.

As a Southampton estate agent, this insight into the local market's nuances not only enhances our ability to advise clients but also reinforces our commitment to providing tailored solutions that resonate with the diverse needs of the Southampton community.

Embarking on the Landlord Journey: - Insights for Aspiring and Seasoned Landlords in Southampton


Property investment has long been a staple in British retirement planning.

The introduction of the buy-to-let mortgage over a quarter-century ago marked a significant turn, presenting opportunities for dual returns: rental income in the short term and capital growth in the long-term. You can see why there are a substantial number of Southampton landlords who view property investment as a cornerstone of their retirement strategy.

However, this path is full of challenges. Recent shifts in tax and regulatory landscapes, coupled with escalating interest rates, have imposed pressures on profitability, compelling some landlords to reconsider their positions. Thus, becoming a landlord in Southampton necessitates meticulous research and a strategic approach.


The Foundations of Buy-to-Let Mortgages in Southampton

A critical step in this venture is securing a buy-to-let mortgage, a process distinct from obtaining a homeowner loan. Lenders assess buy-to-let applicants based on an interest-coverage ratio (ICR), which demands that rental income meets or exceeds a certain percentage of the monthly mortgage interest (a minimum of 125% for standard taxpayers and 145% for higher-rate taxpayers). Additionally, many lenders require that buy-to-let borrowers have a minimum annual income outside of rental earnings to mitigate dependence on rental income.

Regarding the initial investment, a typical deposit hovers around 25% of the property's value. The borrowing landscape has experienced upheavals with the Bank of England's recent base rate increases. However, the average rate for a five-year fixed buy-to-let mortgage has witnessed a reduction in rates recently. For example, at the time of writing, HSBC has a 5-year BTL mortgage at 4.84% with a 75% Loan to Value (i.e. you put down a 25% deposit) with an arrangement fee of £1,999. Prospective Southampton landlords must judiciously consider these factors, evaluating the sustainability of their investment against potential interest rate hikes.


Understanding Costs and Preparations

The financial commitment extends beyond the deposit. Prospective landlords in Southampton should account for additional expenses like stamp duty, which includes a 3% surcharge for second homes. Furthermore, maintaining a contingency fund for maintenance and unforeseen rental voids is prudent. It's advisable to earmark approximately 1% of the property’s value annually for repairs and upkeep.


Navigating the Buy-to-Let Landscape

Investment in Southampton buy-to-let properties is not merely a financial decision but also an emotional one. Landlords must be prepared for the demands of property management, ranging from addressing maintenance issues to dealing with tenant-related challenges. The complexity of landlord responsibilities is underscored by over 150 pieces of legislation governing the sector, a figure poised to rise with impending regulations.


Demand & Supply of Southampton Rental Properties

The Southampton rental market has experienced a sustained period of significant rental inflation over the past few years. Despite that, Zoopla recently stated that demand for rental properties on its portal was 51% higher in Q3 2023 than the five-year average.

In the Southampton area (SO14 to SO19), the numbers of properties being let over the last six years are as follows.

In 2018, an average of 613 properties were let per month in the Southampton area.

In 2019, an average of 646 properties were let per month in the Southampton area.

In 2020, an average of 565 properties were let per month in the Southampton area.

In 2021, an average of 587 properties were let per month in the Southampton area.

In 2022, an average of 606 properties were let per month in the Southampton area.

In 2023, an average of 569 properties were let per month in the Southampton area.



However, even though demand is higher, the long-term supply of rental properties coming onto the market in the Southampton area has seen a slight decline.

So, we have increased demand and reduced supply, which can only mean rents will continue to grow as they have for the last couple of years.

This ongoing imbalance between supply and demand is a consistent characteristic of the rental market throughout all regions and countries in the UK. Currently, the annual rent growth rate in the UK stands at just over 10%. It's not good news for tenants, yet it still makes buy-to-let financially viable for most Southampton landlords, especially as interest rates have risen significantly in the last few years.


Rent Adjustments and Tenant Relations in Southampton

For landlords, understanding the regulations surrounding rent increases is crucial. These rules vary depending on the tenancy type, with periodic tenancies allowing for annual rent reviews. Ensuring transparent communication and fair practices in rent adjustments can foster harmonious landlord-tenant relationships.


The Eviction Process: A Delicate Matter

Eviction is a process governed by strict legal parameters. The anticipated changes in the Renters’ Reform Bill, particularly concerning Section 21 evictions, are set to alter the landscape, emphasizing tenant protection. Landlords must be well-versed in these regulations to navigate tenant eviction legally and ethically.


Conclusion: The Role of Expertise in Property Investment

Having a knowledgeable and experienced guide is invaluable in the intricate world of property letting. As a seasoned agent in Southampton, I offer a wealth of expertise and insight, making me and my team an ideal partner for both novice and experienced landlords

Whether navigating the complexities of buy-to-let mortgages, understanding the nuances of property investment in Southampton, or managing tenant relationships, our proficiency is a vital resource for anyone looking to explore or deepen their involvement in the property market.

In conclusion, the journey to becoming a landlord, especially in a market like Southampton, rewards careful planning, informed decision-making, and strategic foresight. With the guidance of seasoned professionals like us, Southampton landlords can navigate the challenges and complexities of the property market, ensuring their investment not only endures but thrives.

Navigating the Southampton Property Market: - The Art of Pricing Properties Right


As we stand at the threshold of 2024, facing economic uncertainties and a shifting housing landscape, the significance of correct pricing in Southampton's property market has never been more pronounced.

This comprehensive guide delves into the crucial aspects of property pricing and its profound impact on the property market transaction process.


Southampton's Property Market: A Brief Overview

Southampton's property market presents a unique blend of historical charm and modern appeal. The Southampton property market caters to diverse preferences, from classic village properties and 19th-century homes to contemporary modern homes, from terraced homes, apartments, flats, maisonettes, and detached and semi-detached homes. However, this diversity brings with it the challenge of accurately valuing properties. Various factors, including economic shifts, transport links, schools, demographic changes, and national housing trends, have influenced the local Southampton market. Understanding these elements is essential for setting a price that reflects the property's worth and market conditions.


The Risks of Overpricing Your Southampton Home

One of the most common pitfalls in property sales is overpricing. This mistake often originates for two reasons.

The first is an emotional attachment to the property or the owner's misinterpretation of the market, so the owner’s hopes are over inflated for the local property market (remember, buyers haven’t got the emotional connection you have for your home).

The second is when estate agents overvalue properties to attract homeowner business; it poses significant risks and consequences for the homeowners. This practice, often driven by the desire to secure a listing, can lead to a misleading perception of the property's actual market value.


Overpriced Southampton Properties Tend to Remain on the Market for More Extended Periods

When a property is overpriced, it leads to what's often termed as 'listing fatigue.' This stagnation can create a negative perception among potential buyers, who may assume there are unspoken issues with the property.

This stagnation not only diminishes the property's appeal but can also necessitate subsequent price reductions, which may cast doubt on the property’s condition or desirability in the eyes of potential buyers.

Moreover, a property lingering unsold due to overvaluation can disrupt the homeowner's plans, whether purchasing a new home or relocating.

I recognise for the homeowner, an overinflated price tag initially seems appealing. Yet, it ultimately results in a prolonged period on the market, as the property fails to attract buyers at this unrealistic level and sometimes you have to drop your asking price below the market value six/nine months later to get it sold.

All these scenarios underscore the importance of choosing a Southampton estate agent who provides honest, market-reflective valuations from the outset, ensuring a smoother, more efficient sale process and safeguarding the homeowner's best interests.


The Downside of Under-pricing Your Southampton Home


Conversely, under-pricing a property, although potentially expediting a sale, can result in substantial financial loss for the seller. Setting a price too low in a market where maximising returns is paramount can mean significantly under-realising your Southampton property's actual market value. This scenario underscores the importance of expert valuation that considers all aspects of the property, including its potential in the current market.


Striking the Right Balance for Your Southampton Home

Accurate pricing is a delicate art that balances understanding a property's intrinsic value and aligning it with market trends. It involves thoroughly analysing local Southampton market conditions, comparative property studies, and awareness of broader economic factors.

As a seasoned estate agent in Southampton, I bring a comprehensive understanding and in-depth knowledge of local markets to assist homeowners in accurately pricing their properties. This approach is not just about facilitating quicker sales; it's about ensuring that properties are sold at their rightful value.

There is no harm in ‘trying the market’ at a slightly higher price in the initial stages of marketing. Yet, if you are going to try a slightly higher price, it is so important to have this monitored on a weekly basis in the first four to six weeks of the property being on the market and making any necessary changes to the asking price around that time.

There is such a thing as a Goldilocks price reduction. It shouldn’t be too little or too much, just right, so it gives a strategic price reduction.


Southampton House Price Reduction Stats

In a competitive property market, a strategic price reduction can reignite interest in a property. When used judiciously, this tactic attracts more potential buyers, sparking renewed attention and leading to a quicker sale. By adjusting the price to align with market trends and buyer expectations more closely, sellers can effectively boost the appeal and visibility of their property.

The rule of thumb is that if you try a slightly higher price in the initial stages of marketing, do so, at most, for a few weeks/one month, then reduce it. But how much should you reduce it by?

As always, that comes down to your property and its standing in the market.

However, I wanted to share with you the level of price reductions in the Southampton area (SO14-SO19) over the last six years.

In 2018, an average of 2,003 properties were for sale in the Southampton area. Estate agents reduced, on average, 259 properties per month; thus, 12.8% of Southampton homes were reduced in price every month.

In 2019, an average of 2,143 properties were for sale in the Southampton area. Estate agents reduced, on average, 295 properties per month; thus, 13.7% of Southampton homes were reduced in price every month.

In 2020, there were an average of 2,215 properties for sale in the Southampton area during the year. Estate agents reduced, on average, 277 properties per month; thus, 11.9% of Southampton homes were reduced in price every month.

In 2021, an average of 1,780 properties were for sale in the Southampton area. Estate agents reduced, on average, 193 properties per month; thus, 10.9% of Southampton homes were reduced in price every month.

In 2022, there were an average of 1,458 properties for sale in the Southampton area. Estate agents reduced, on average, 187 properties per month; thus, 12.6% of Southampton homes were reduced in price every month.

In 2023 (to the end of November), there have been an average of 1,933 properties for sale in the Southampton area during the year. Estate agents reduced, on average, 310 properties per month; thus, 16.0% of Southampton homes were reduced in price every month.


As you can see, there has been a substantial increase in properties on the market and thus price reductions in the Southampton area the last year.



The average reduction of a Southampton home in the last tthree months has been 6.7%


Looking Ahead to the 2024 Southampton Property Market


As we advance into 2024, the Southampton property market, like many others, is navigating through a period marked by economic uncertainties and evolving buyer preferences. In this environment, realistic pricing is not merely a tactic for selling; it becomes a critical tool for differentiation in a competitive marketplace. Southampton properties priced in line with current market realities are more likely to attract serious buyers and foster successful home moves.

My final thoughts are that homeowners need to understand and master the art of property pricing, which is crucial in today's challenging and complex real estate market, especially in a diverse and evolving area like Southampton.

As an estate agent committed to delivering the best outcomes for my clients, my role goes beyond facilitating property transactions; it involves guiding and educating Southampton homeowners to make informed decisions in this dynamic market. Regardless of which estate agent you choose, remember that realistic and accurate pricing is the cornerstone of success in the current property landscape.

If you're thinking of moving in the next few months, and you want to know the true place of your Southampton property in the Southampton property market as a whole, or you are presently on the market with another Southampton agent and you would like an honest opinion of where you stand, please do not hesitate to contact me.

Friday 22 December 2023

How the 19% Saleability Drop in the Southampton Property Market Might Impact Your 2024 Home Moving Plans


The Southampton housing market, like many others, has experienced a notable shift in 2023.

The percentage of home sales agreed and moved (completed) compared to those withdrawn from the market unsold has decreased relative to 2022.

Looking at independent data for the Southampton area (SO14 to SO19) …


In 2022, 70.6% of properties that left the books of Southampton estate agents agreed a sale, exchanged contracts, and the owners moved home


(3,801 Southampton area properties exchanged and completed vs 1,578 properties that withdrew from the agent’s books, unsold).


In 2023, 57.2% of properties that have left the books of Southampton estate agents agreed a sale, exchanged contracts, and the owners moved home


(3,015 Southampton area properties exchanged and completed vs 2,252 properties that withdrew from the agent’s books, unsold up to the 20th December 2023), meaning there has been a …


19% proportional reduction in the saleability of

Southampton homes between 2022 and 2023


It's interesting to compare that with the South East regional and national stats for both years.

In the South East, 63.46% of properties were exchanged, completed, and moved in 2022, compared to 47.54% in 2023, a drop of 25.1%. Nationally, 65.55% of properties were exchanged, completed and moved in 2022 compared to 52.39% in 2023, a decline of 20.1%.

This could raise concerns among Southampton homeowners and potential sellers. As a seasoned estate agent in Southampton, I have observed these trends closely and offer insights into this phenomenon and strategies to enhance your home's saleability in 2024.


Understanding the Dip in Saleability in Southampton

Economic Influences: much like the rest of the UK, Southampton has been subject to financial pressures such as inflation and Bank of England interest rate increases. These factors have affected buyer affordability, leading to a more cautious approach to home purchasing.

Market Saturation and Buyer's Market: 2023 saw a surge in Southampton properties on the market. This increase changed the Southampton property market from a strong seller's market to a balanced market or even a buyer's market in some parts of Southampton throughout 2023, where the availability of choices led to a more selective purchasing behaviour.

Changing Buyer Preferences: In Southampton, buyer preferences have evolved. There's a growing demand for properties that offer flexible living spaces, energy efficiency, and modern amenities, which not all available homes meet.

Local Economic and Social Factors: Southampton's local economic and social developments, such as job market shifts and community developments, have also played a role in influencing the housing market dynamics.


Six Tips to Maximising Your Southampton Home's Saleability in 2024


Southampton properties are still selling, yet not at the rate they were in 2021 and 2022.

Just over 11 out of 20 Southampton people in 2023 have sold and moved (i.e., the 57.2% figure mentioned above). If you want to avoid being in the 9 out of 20 Southampton people who were unable to sell and move this year, there are some things that you can do to stack the cards in your favour.

To start with, the saleability levels in Southampton in 2023 are very similar to the saleability rates between 2014 and 2019.

1.     Strategic Pricing: Understanding the Southampton market is critical. Homes priced correctly from the outset are more likely to attract serious buyers. This requires a deep understanding of the local market trends, something a knowledgeable estate agent can provide.

2.     Tailoring to Buyer Preferences: Align your Southampton home with current trends. This could mean investing in creating flexible work-from-home spaces, upgrading energy systems, or modernising key areas like kitchens and bathrooms. However, before you start spending tens of thousands of pounds on this, please do pick up the phone so I can give you the best advice for the type of property you own in Southampton. I have lost count of the number of times I've seen a Southampton homeowner spend money on the wrong things without advice, only to find the money they spent did nothing for the value of their home nor made it more saleable.

3.     Effective Marketing: Utilise a comprehensive marketing strategy that includes high-quality photography, virtual tours, and leveraging online social media and portals. As experts in the Southampton property market, we can target the correct demographic and present your home in its best light.

4.     Preparing for Viewings: First impressions matter. Ensure your Southampton home is well-presented, clean, and decluttered. We can offer personalised advice on the presentation of your home to appeal to potential buyers.

5.     Flexibility and Negotiation: Be prepared for negotiation and show flexibility in terms of viewing times and conditions of sale. This approach can make your property more appealing compared to others on the market.

6.     Capitalising on Local Knowledge: Southampton's unique charm and amenities should be highlighted. As a local market expert in the city, I can help showcase these aspects effectively to potential buyers.

The decrease in the saleability rate in Southampton reflects broader economic trends and evolving buyer preferences. However, with the right approach and strategies, selling your home in 2024 can be a realistic and successful endeavour.

By understanding the Southampton market, pricing strategically, aligning with buyer preferences, and utilising effective marketing and presentation techniques, you can significantly enhance your chances of a successful sale.

As a Southampton property market expert, I offer more than just transactional advice; I provide insights into what makes our local Southampton market tick. By partnering with a knowledgeable estate agent, you can confidently navigate these challenging times and maximise your chances of a successful home sale in 2024.

Wednesday 1 November 2023

Southampton Property Insights: Ignoring the Doom Monger Headlines


Navigating the property landscape, particularly in a city like Southampton, requires more than just a reactive approach to the daily newspaper and social media headlines.

As homeowners and potential investors are continuously bombarded with alarming whispers of plummeting house prices, coupled with rising interest rates and the heartache of negative equity, there's a tangible atmosphere of anxiety and trepidation. Yet, the truth we must all embrace is this:


No one can predict the property market with pinpoint accuracy, not even the experts.


Every press release from the Halifax, Nationwide or Land Registry with the merest hint of a downturn or hiccup in the property market becomes headline fodder, often stoking fears and uncertainty. Why do the newspapers and clickbait doom mongers post that? 

Because ‘bad news’ sells newspapers!

With interest rates on an upward trajectory, both prospective and current Southampton homeowners are grappling with pressing questions …

Will the house price decline continue? Is negative equity on the horizon? What of interest rates? Let us dive in on the current state of play.


Southampton house prices are only 3.0% lower than their peak of January 2023.


(£253,778 January 2023 to £246,052 June 2023 – the most up-to-date data from the Land Registry).

Interesting when compared with a national drop of 1.9% over the same time frame, with most areas seeing house prices rise in the last two months!

Historically, property prices have exhibited a rhythmic dance of peaks and troughs. A review of housing market trends over decades would reveal this inherent cyclical nature. House price declines are only a prelude to eventual rebounds. This pattern has been the underpinning of the property market for generations.

What of negative equity?

If Southampton house prices drop by 10%, a small percentage of homeowners (2.83% of all homeowners that have bought in the last two years) will be in negative equity. 

Yet, that is only a problem if they decide to sell the property, and as we all know, homeownership is a long-term thing, and most of those who would have negative equity will probably be on five-year fixed low-rate mortgages.


But what if Southampton house prices dropped from the peak in January 2023 by the same percentage (20.2%) as they did in the global financial crash in 2008/9?


If that were the case, Southampton house prices would just return to the Land Registry house price levels achieved in July 2019 (£205,468) – and nobody was complaining about those! (Although the number of people in negative equity would increase slightly).

As Southampton homeowners face uncertainty regarding potential house price drops, it is crucial to recognise the various factors that support the housing market’s resilience. While economic conditions can fluctuate, history has shown that housing values tend to appreciate over the long term. 

Southampton homeowners can also take comfort in the differences between the 2023 market and the 2008 housing bubble, including stronger equity positions and a more regulated lending environment. 


So what does the future hold for Southampton homeowners?


For homeowners in Southampton, it's crucial to understand the broader context. Global economic dynamics, national policies, regional developments, and local demand-supply dynamics all play pivotal roles in determining property prices.

As such, while short-term market shifts are inevitable, they don't necessarily define the long-term trajectory of property values.


Moreover, property should often be viewed as a long-term investment.


While the temptation to make quick decisions based on current trends is strong, it's vital to consider the bigger picture. Remember that property isn't just an asset; for many, it's a home, a place of memories, and a cornerstone of family life.

The mortgage interest rates of 1% to 1.5%, that we saw up to 18 months ago, are not going to return. Yet looking at 5-year swap rates, the money markets are predicting (with billions and billions of pounds of their own money at stake) that UK interest rates will come down significantly over the next 5 years from their current levels of around early 6%.


There is a saying in property -

“Marry the house, and date the interest rate”.

It simply means you are committing to a long-term relationship with the house you love. Yet you can dump the interest rate when you re-mortgage. The idea is that when you find the house you love, you buy it, with the anticipation that you will be able to refinance later when interest rates drop.

Diving into the archives of property history, one witnesses a tale as old as time: a fluctuating market characterised by peaks and troughs. Like the ever-rolling waves of the sea, property prices rise, fall, and rise again.

Such is the cyclical nature of housing markets worldwide, and Southampton is no exception.

For the residents and homeowners of Southampton, understanding the broader tapestry of property dynamics is paramount. Consider these vital elements:

·       Global and Local Economic Factors: Southampton's property market, though unique, doesn't exist in a vacuum. International economic shifts, national fiscal policies, regional developments, and even local events play decisive roles in shaping property prices. A short-term dip, as mentioned above, does not foretell a long-term decline or house prices crashes as seen in 2008.

·       The Long Game: Traditionally, owning property is a marathon, not a sprint. Quick, impulsive decisions, driven by panic or greed, rarely bear fruit. Instead, a more measured, patient approach, considering the property's long-term potential, is often more rewarding.

·       Southampton's Rich Tapestry: With its historical charm, coupled with an array of property types ranging from vintage homes to contemporary modern brand-new homes, Southampton offers resilience against sweeping market downturns. This diversity provides both stability and opportunity.

·       Infrastructure & Growth: Southampton's ongoing development and infrastructural projects often lead to a long-term appreciation of property values, countering short-term market fluctuations.

·       Rental Prospects: A potential silver lining during market downturns is the rental market. Southampton's strategic location, history, and vibrant community make it a perennial attraction for renters. For Southampton homeowners, this can translate to a steady income stream even if the sales market looks less favourable.

·       Historic Resilience: A glance at Southampton's past reveals a property market that has not only weathered numerous economic challenges but often emerged stronger and more robust. This resilience speaks volumes about its inherent potential.

In weaving through the property labyrinth, homeowners and investors in Southampton must cultivate a panoramic view. While it's easy to get swayed by the market's immediate waves, one must remember the vast seas and ocean beyond. The short-lived troughs are merely precursors to the next crest.

To truly succeed in Southampton's property domain, it's less about reacting to today's noise and more about tuning into the timeless melodies of history, patience, and informed foresight.

If would like a chat about where you sit in the Southampton property market, do not hesitate to give me a call or drop me a message on social media.


Thursday 28 September 2023

The Changing Landscape of Southampton’s Housing Market: Exploring the Ethical Dimensions of Buy-to-Let Investment.


The city of Southampton has witnessed a profound transformation in its housing landscape over the last few years, and the surge in private renting has led to significant debates about the morality of the buy-to-let market.


Let us look at the current statistics compared to 40 years ago to show the seismic shift. Looking at our local authority area of Southampton Council.


29,860 Southampton Households are in the Private Rented sector now, representing 29.19% of all homes in our local authority area.


Interesting when we compare this to the 1981 numbers for Southampton.


In 1981, 9,886 Southampton Households were in the Private Rented Sector, representing 13.13% of all homes in the local authority area.


This has started prompting discussions about the role of the Baby Boomer Generation in exacerbating the housing crisis and the ethical implications of the buy-to-let phenomenon.

This article delves into the factors contributing to Southampton's housing challenges, examines the generational economic imbalance, explores the history of housing policy, dissects the impact of financial deregulation, and evaluates the moral questions surrounding the buy-to-let market.


Generational Imbalance and Economic Disparities

The housing crisis in Southampton has ignited a debate over whether the Baby Boomer Generation, aged between 59 to 76, bears responsibility for the present situation. Born after World War II, this generation experienced unparalleled economic growth and prosperity during the 1970s and 1980s, benefiting from improved education, government subsidies, rising property prices, and technological advancements. However, critics argue that the success of Baby Boomers has contributed to a generational economic imbalance, leaving their children struggling with soaring rents and burdensome mortgages.


A Glimpse into the Past of the Southampton Property Market

To comprehend Southampton's current housing challenges, one must trace the key events that shaped its housing market. The mass construction of council housing during the 1950s and 60s, followed by the selloff of many council houses in the 1980s under Margaret Thatcher's Government, is blamed by many for their role in altering the market dynamics.


To give you an idea of the number involved …


22,397 Southampton Households are now in the Social Housing sector (Council Houses & Housing Association), representing 21.90% of all homes in our local authority area.

Interesting when we compare this to the 1981 numbers for Southampton.


In 1981, 24,551 Southampton Households were in the Social Housing sector, representing 32.61% of all homes in our local authority area.

As you can see, the numbers are not seismically different, are they? So, what are the other issues that caused this?

The early 1990s witnessed skyrocketing interest rates (15% at one point), leading to widespread repossessions in Southampton (and the UK as a whole). This was one of the catalysts that contributed to the underlying housing crisis of today.


Financial Deregulation and Buy-to-Let Investments

Another catalyst was risky lending practices in the UK and USA. In the early 2000s, UK Banks started introducing 100% mortgages and even riskier lending practices, with Northern Rock lending 125% mortgages (and we know what happened to them).

All this lending was built on the back of ‘derivative swaps’ between all the world's banks (they would sell the debts (i.e. mortgages) between each other to make money).

The problem was that many of these derivatives contained lots of safe, low-risk low-profit mortgages and some high-risk profitable ‘sub-prime’ USA mortgages. This had been caused by a change in the law in the USA in the mid-1990s with the easing of lending rules in the US through the Community Reinvestment Act in 1995, which allowed for sub-prime lending.

So, when the money markets started getting cold feet in 2007 because the banks didn’t know if their derivatives had a small or large number of high-risk sub-prime mortgages, the banks stopped lending to each other (because they were worried they wouldn’t be paid back as many of these sub-prime mortgages were defaulting in 2006/7 and being repossessed). 

This had a ripple effect on the UK's housing market. The UK banks had much smaller funds to lend out (because they could borrow money from the money markets for the reasons above), so they stopped lending to high-risk UK borrowers (i.e. 95% first-time buyers), whilst at the same time they increased lending to lower-risk landlords with buy-to-let mortgages with a 25% deposit and a stable income.


Millennials and the Buy-to-Let Controversy

The millennial generation, born between the mid-1980s and late 1990s, has been particularly affected by the surge in buy-to-let investments. These young adults, shaped by the digital revolution, need help entering the property market due to competition with buy-to-let landlords. Critics often portray Southampton landlords as greedy individuals capitalising on the housing crisis, exacerbating the sense of social despair among millennials. However, as I wrote in the Southampton property blog a few weeks ago, 64% of Southampton landlords are not increasing their rents. (If you want to read that article – drop me a message request).


Role of Property Developers and Housing Shortage

In response to the growing housing demand, property investors have stepped up, acquiring dilapidated properties and repurposing them into habitable homes. This has provided a partial solution to the shortage of available housing, particularly for those who rely on rental properties provided by landlords and property developers.


Ethical Dimensions of Buy-to-Let Investments

The ethical considerations surrounding the Southampton buy-to-let market are complex and multifaceted. On the one hand, Southampton buy-to-let landlords have filled a void in the Southampton housing market, providing much-needed shelter to many Southampton tenants. On the other hand, concerns arise regarding exploitative practices by a handful of rogue landlords and the potential commodification of a basic human need – shelter.

The bottom line is, as the population of Southampton grows, there needs to be more properties being built for everyone to have a decent roof over their head. The rogue landlords of Southampton need to be put out of business. Finally, Southampton tenants should expect a more regulated rental market (which they have achieved over the last few years), with greater security for tenants, where they can rely on good decent Southampton landlords providing high standards for their safe and modernised home.


Addressing the Crisis and Moving Forward

To alleviate Southampton's housing crisis, a multifaceted approach is necessary. Fairer regulations for Southampton landlords, enhanced tenant protections, and incentivising property development could contribute to a more balanced housing market. Exploring innovative models from European countries, where renting is more prevalent, could provide insights into creating a system that ensures decent and affordable housing.

Final Thoughts

Southampton's housing market has undergone substantial changes over the years, with the rise of private renting and the proliferation of buy-to-let investments playing a pivotal role. The generational economic imbalance and ethical concerns associated with the Southampton buy-to-let market have sparked passionate debates about the responsibility of different generations and the moral implications of housing as an investment.

As Southampton continues to grapple with housing challenges, collaborative efforts between policymakers in local and central Government, developers, Southampton landlords, and tenants are essential to creating a housing landscape that is fair, ethical, and accessible to all.

So, my final question is to you, the reader of this article.

Only you can decide if buy-to-let is immoral, but let me ask this question first.


If these Southampton buy-to-let landlords had not taken up the slack and provided 19,974 extra homes in the last 40 years for people in the Southampton Council area, where would these Southampton tenants be living now?


During the height of council house building in the 1950s, UK local authorities were building, on average, around 147,000 council houses a year. In the last decade, UK local authorities have only averaged building around 1,400 council homes a year.


It would cost Southampton Council £2.54bn to build all those 19,974 buy-to-let homes today that local landlords have funded themselves (a figure that assumes the council build on land they own).


That building sum would take up 100% of our local authority's budget for the next eight to ten years.


All this conjures up many questions such as:


  • ·         Is the buy-to-let practice immoral or in fact necessary?


  • ·         Should, as recently voiced, landlords be restricted to one rental property each?


  • ·         What would our housing landscape be like without rented accommodation?


·         Of the 29,860 Southampton households that are in private rented accommodation, how many of those have little or no option other than to rent, so where would they be if there was no private rented sector?

These are my thoughts; tell me yours!