𝐄𝐢𝐠𝐡𝐭 𝐖𝐚𝐲𝐬 𝐒𝐨𝐮𝐭𝐡𝐚𝐦𝐩𝐭𝐨𝐧 𝐋𝐚𝐧𝐝𝐥𝐨𝐫𝐝𝐬 𝐂𝐚𝐧 𝐆𝐞𝐭 𝐭𝐡𝐞 𝐁𝐞𝐬𝐭 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐃𝐞𝐚𝐥

In this three-minute read, we look at how landlords can avoid getting a bad insurance deal

If you’re a landlord looking to take out insurance or renew a current policy, there are a few things you should know.

The insurance market is “hardening”, or in other words, insurers are tightening their belts.

The rising costs of claims due to extreme weather events such as last year’s Storm Dennis and low interest rates (meaning insurance firms make less on their investments) have hit the industry hard.

As a result, insurers are upping the cost of premiums and employing other – less obvious – tactics to increase their bottom line.

𝐁𝐮𝐭 𝐟𝐢𝐫𝐬𝐭, 𝐚 𝐪𝐮𝐢𝐜𝐤 𝐫𝐞𝐦𝐢𝐧𝐝𝐞𝐫

Landlords need specific insurance; a standard home and contents policy will not suffice. Landlord insurance is usually a condition of a buy-to-let mortgage, but even if you’re debt-free, it’s worth getting. (You hope the worst won’t happen, but if it does, you’ll be covered.)

Standard policies include buildings and liability cover, although you can also opt to include things like legal costs, accidental damage, or loss of rent.

𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐭𝐢𝐩𝐬 𝐟𝐨𝐫 𝐒𝐨𝐮𝐭𝐡𝐚𝐦𝐩𝐭𝐨𝐧 𝐥𝐚𝐧𝐝𝐥𝐨𝐫𝐝𝐬 𝐅𝐨𝐥𝐥𝐨𝐰 𝐭𝐡𝐢𝐬 𝐜𝐡𝐞𝐜𝐤𝐥𝐢𝐬𝐭 𝐭𝐨 𝐠𝐞𝐭 𝐭𝐡𝐞 𝐛𝐞𝐬𝐭 𝐝𝐞𝐚𝐥:

- If you already have a policy, read it thoroughly before you start your research. It might not be the most exciting few hours of your life, but your diligence could save you time and money in the long run.

- Note in your diary when your policy is due to expire and leave yourself enough time to shop around. You won’t get the best deal if you’re in a last-minute panic.

- Look at what the premium covers. Is there a gaping omission that could leave you exposed? If it’s an existing policy, has your coverage been reduced?

- Check the standard excess (excess rates have been creeping up). The policy premium might be appealingly low, but if the excess is high, you could wind up paying more in the long run.

- Be aware that some types of claims have a higher excess. For example, escape of water (which covers leaks and burst pipes) has a higher excess as it’s a more common occurrence.

- Check the rules around vacancy as some policies become void if the property is empty. As there could be a rise in tenant turnover when furlough ends later this year, ensure your policy gives you a bit of leeway on vacancy periods.

- Have your paperwork to hand when talking to insurers. They’ll want to know (and see proof of) the age of the property, state of repair, and claims history.

- Some policies only cover certain types of tenants – for example, professionals – who are viewed as low risk. It may pay to include other tenant groups, such as students, in your policy to give you more flexibility.

For more advice about protecting your rental property, get in touch with us here at Belvoir.

COPYRIGHT Belvoir Southampton 2021

Will Southampton House Prices Fall in 2022?

One of the most astounding things that has happened in the last 12 months was something that did not happen. Even after the country saw the deepest recession since the Great Freeze of 1709 with GDP dropping 28% in one quarter, one would have expected a large fall in Southampton house prices would follow. Yet…

 

Southampton house prices are 7.8% higher than 12 months ago.

 

Even though buying and selling Southampton property was put on ice for the first time in the history of the Southampton property market last spring due to the Covid 19 outbreak, as the Southampton property market wobbled on the edge of a deep recession, it stepped back in early summer and now it is rocketing upwards as…

 

13.4% of Southampton homes are selling within a fortnight of coming to market.

 

Some commentators have suggested the end of the Stamp Duty holiday together with the ending of the furlough scheme on the 30^th September 2021 could be the catalyst for a drop in house prices. Even the Government’s own regulator of finances expects UK house prices to fall around a couple of percentage points in 2022 whilst some others have predicted a drop of around 5% as unemployment levels increase post furlough.

 

However, other property market forecasters believe that property values in 2022 won’t drop against the background of robust British economic recovery in Q3 and Q4 of 2021.

 

What do I think will happen to the Southampton property market in the next 12 months?

 

On the positive side, what I do know is the Stamp Duty holiday enabled Southampton homebuyers to spend those tax savings on the price paid for their Southampton home and that certainly accounts for some of the uplift in house prices mentioned above.

 

Also, the historically low interest rates that have supported Southampton homebuyers’ affordability for the last 13 years since the Credit Crunch has continued. Secondly, with people spending many months working from home, this has seemed to have polarised people’s inclination to make lifestyle changes. Finally, the Government has recently introduced 5% deposit mortgages for first-time buyers. All these factors will fuel demand and hence may cause house prices to rise.

 

On a more cautious note, I do not believe these very sturdy Southampton house value rises of the past year will persist at these levels for the next 12 months. With buyers having to use many thousands of pounds on Stamp Duty, the price they pay for their Southampton home will be curtailed, meaning property values by definition will ease. 

 

The simple fact is the British economy has yet to feel the full effect of its largest recession since 1709, and we must remain considerate about the long-term effects of the economy (and unemployment levels) on the property market.

 

These are interesting times for the Southampton property market. If the price you want to achieve for your Southampton home is the most important thing, now as opposed to 2022 might be a good time to consider placing your property on the market.

 

Don’t forget, you can still put your Southampton property on the market, find a buyer and then go and see what is available to buy. Many buyers will wait for you to find a property, yet if they can’t/won’t – you won’t be made homeless. English property law means you can still come away from the sale and you won’t be forced to sell. If you would like to know a bit more about that or any aspect of buying or selling property in Southampton, drop me a message or call me.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH

 

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.

 

Blog, http://southamptonproperty.blogspot.co.uk/

 

Facebook, https://www.facebook.com/belvoirsouthampton/

 

Twitter, https://twitter.com/sotonbelvoir

 

LinkedIn, https://www.linkedin.com/in/brianlinehan

 

Website, https://www.belvoir.co.uk/offices/southampton

Lessons for landlords in Southampton from the wealthiest person in the world

A landlords’ advice article published recently said property investors need to think more like the Amazon founder Jeff Bezos.

The billionaire businessman is renowned for his long-term thinking. He thinks decades ahead, and let’s face it, he’s not doing too bad, is he?

The article said landlords should retain good tenants at a reasonable rate rather than aim to get the highest rents in the short term. It’s wise advice and something we believe in.

When a landlord adopts a short-term view of their property investment, it can often lead to lasting headaches. The advice you are given can often depend on your letting agent’s philosophy.

Some agents will say things like: ‘The rental market in Southampton is on fire now. We can get you even higher rents and squeeze out every penny from tenants.’

That’s not the way we approach things. Why? Because if you hike up a person’s rent whenever possible, it may mean more money in the short run but can be more costly in the long run.

Our advice to clients and indeed anyone thinking of investing in rental property is this:

Getting higher monthly rents isn’t as crucial in the mid to long term as finding and looking after good quality tenants paying a fair rate.

Here are some of the plus points a good longer term tenant brings:

Fewer void periods.

Fewer unnecessary repair or maintenance call outs mean a reduction in the property’s running expenses.

Good tenants appreciate they are being treated fairly and respectfully, and they look after their home.

Never to be underestimated is that having a good tenant in your property reduces your stress levels.

Going for the highest monthly rent charge as a property rental strategy can often be a mistake. It is more about maximising the overall return for our landlords.

At Belvoir Southampton, we take the time to find, vet and keep good quality tenants for our landlords. This is the best way forward in the long term.

So, take a leaf out of the wealthiest person in the World’s book (Bezos was ranked #1 by Forbes magazine last month) and think further ahead when it comes to achieving rental property success.

 

*Copyright Belvoir Southampton

Are You Ready for Life after Lockdown in Southampton?

In this two-minute read, we look at how to get ready for the changes that lie ahead as restrictions continue to ease.

With the end to our arduous Covid hibernation in sight, it’s time to prepare for life in the “new normal”.

While the prospect of restrictions easing is exciting – we can’t wait to eat at Jehangir’s Restaurant and drink at The Dancing Man Pub – it will also take a little getting used to.

That’s because many of us have grown used to lockdown living; we now work from home, live in tracksuit bottoms, and tell ourselves that cutting our own hair is a good idea.

But after a year of adapting to a host of unfortunate circumstances, it’s time to adapt again – only for happier reasons. Here are a few ways to prepare for life after lockdown.

Spring clean your wardrobe

If you’ve spent the past year in leggings, jeggings, slankets, and onesies – anything with a forgiving waistline basically – now is the time to dig out your “good” clothes. Try them on and decide if you still like them and if they still fit you. Donate unwanted items to a charity shop and make any necessary purchases. You don’t have to ditch all your comfy stuff, but you will need a few pieces that will look smart in a work meeting or at a catch-up with friends.

Revamp your fitness routine

Many people kicked off the first lockdown in 2020 with a flurry of physical activity that tapered off as the pandemic dragged on and on. They’re now – understandably as it’s been a tough year – carrying a few extra pounds. If you want to shift a little weight, take your time. Start slowly and progress steadily to avoid injury. Also, focus on activities that you enjoy – they will be good for your mental health, and you’re more likely to continue with them long term.

Acknowledge stress

It may seem that with lockdown lifting, all our troubles will be over. But it’s important to be realistic with our expectations. Some of the activities that we’ve avoided over the past year such as long commutes, mingling at parties, making small talk in the work canteen – may make a return and prove stressful. If things you once took for granted now feel challenging, don’t give yourself a hard time. Talk to someone about it (lots of people will be in the same boat), and remember that we’re still navigating our way through a deadly pandemic. Be kind to other people – and yourself.

From all of us here at Belvoir, take care and stay cheerful.

COPYRIGHT BELVOIR SOUTHAMPTON 2021

Southampton Property Market: 2011-2021

A look back at the Southampton housing market over the last decade

With all of us completing the Census, a couple of weeks ago, it made me realise profoundly that mine and my family’s life, which from our own point of view seems unique and delightful, makes us all into a series of statistics for the Census gatherers to pore over. To digest and regurgitate facts, figures and trends for those who are interested in the ever- changing social circumstances of these islands.

 

However, the information from the Census is vital to improving our lives - Governments can plan the future with the information it provides and we in turn can wonder about the lives of our past generations with the information provided therein historically if we so wish. 

 

Whilst the information from this Census won’t be published until March 2023, let us have a look at what has been happening in the Southampton property market since the last time we completed the Census, in 2011.

 

Just to remind you, 2011 saw the wedding of Prince William and Kate Middleton, Mr Cameron was the PM, there was the last flight of the Space Shuttle and Game of Thrones premiered.

 Whilst in the Southampton property market …

 

·       The average price paid for a Southampton detached home in the last 12 months has been £446,000. The average value of a Southampton detached home has risen by 36.5% in the last 10 years or £125,000

 

·         The average price paid for a Southampton semi-detached home in the last 12 months has been £293,200. The average value of a Southampton semi-detached home has risen by 39.0% in the last 10 years or £95,100

 

·         The average price paid for a Southampton town house/terraced home in the last 12 months has been £238,900. The average value of a Southampton town house/terraced home has risen by 34.8% in the last 10 years or £76,200

 

·         The average price paid for a Southampton apartment/flat in the last 12 months has been £174,300. The average value of a Southampton apartment/flat has risen by 31.7% in the last 10 years or £55,500

 

Irrespective of any dip in Southampton house prices or transactions when the Stamp Duty Holiday ends in the autumn, this is a trend that looks set to continue, with no sign that supply of new homes is anywhere near to keeping pace with demand for households.

 

There have only been 6,385 new properties built in Southampton in the last 10 years, that’s just over 53 a month. That means the population in Southampton has risen by 2.62 people for every new home built over

that decade.

 

Nationally, the Country has only built just over 180k homes a year over the last decade, 120k less than the national target of 300k. In the meantime, the population has grown by more than 4 million.

 

When looking locally at the size of new build property in Southampton, the average property is just over 850 sq. ft., which is 20% smaller than a decade ago.

 

Rents in Southampton …

 

Whether you are a winner or loser in terms of rental values depends on whether you are a Southampton landlord or a Southampton tenant.

 

The average rent for a property in Southampton currently stands at £1,228 per month, whilst a decade ago, it was £998 per month

 

This means private rents have increased by £1.91 a month for the past ten years.  Interesting, when compared to the national average of 98p a month whilst in London, rents have grown by a massive £4.64 a month.

 

 

So what’s in store for the next 10 years of the Southampton Property Market…

 

Well the next ten years will also be just as fascinating. To try and predict would be a fool’s game.

 

For example, who would have believed what the Southampton property market has done in the last 12 months since the start of Lockdown 1.0. The number of transactions (i.e. people moving) in turn with UK house prices having risen so much in the last year ... all during a worldwide pandemic and at a time of such mayhem and havoc in the UK and world economy, is nothing short of remarkable … the question is – is it sustainable?

 

Read these articles in the coming months and years and I will share with you what is happening to the value of your Southampton property, be you a Southampton homeowner or Southampton landlord.

CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH

 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.

 

Blog, http://southamptonproperty.blogspot.co.uk/

 

Facebook, https://www.facebook.com/belvoirsouthampton/

 

Twitter, https://twitter.com/sotonbelvoir

 

LinkedIn, https://www.linkedin.com/in/brianlinehan

 

Website, https://www.belvoir.co.uk/offices/southampton

 

Southampton Property Market Improved by 28.7% Over Pre-pandemic Levels

Has there ever been a better time for Southampton home sellers?

 

The Southampton property market, for people looking to sell, is at its sturdiest for at least the last five years with home buyers jumping onto the Southampton property ladder with abandon.

Southampton house prices are anticipated to rise throughout 2021 after the Stamp Duty cut (and subsequent extension until the autumn) and the newly revealed 95% mortgages for Southampton first-time buyers (and Southampton homeowners with minimal equity).

In addition, the continued low interest rates and the demand for larger homes because of lockdown means the Southampton property market should remain bullish for a while. There is a surge in potential buyers putting themselves on mailing lists with Southampton estate agents, making the biggest disparity between supply and demand for Southampton property for many years.

Fears of a cliff edge for the Southampton housing market at the end of March have dispersed, somewhat due to the Stamp Duty tax deadline extensions, but also because of the elevated level of buyer demand caused by the three lockdowns which has continued to swell since the start of 2021, meaning that today …

 

66% of Southampton properties on the market are Sold (STC)

Interesting, when utilising data from theadvisory.co.uk website, the Southampton average for the last five years has only been 51%, meaning there has been an uplift of 28.7% in the proportion of Southampton properties sold (stc) compared to that five-year average.

  

Yet what can’t be forgotten is that 45% of Southampton house sellers are also house buyers, so whilst they do indeed achieve a higher price for their Southampton property, they also have to pay more for the Southampton property they want to buy.

So, how much will Southampton house prices rise by?

Like all things in life, it’s all about supply and demand. I have discussed the demand, yet what about the supply of properties for sale? Well…..

 

There are 5% more Southampton properties for sale today compared to 6 years ago

Nationally, in most UK towns and cities, the number of properties that are for sale today compared to same pre-Easter property markets of 2015 to 2019 are lower by around 10% to 20%, yet in Southampton the opposite is true. With the easing of lockdown started and the faster rollout of the vaccine, this has persuaded more Southampton homeowners (especially those older Southampton homeowners who have had their jabs) to start making the first steps towards moving home in 2021 and placing their property on the market for sale.

This will mean there will be more Southampton properties available for sale in the conventionally busier post Easter market in the coming weeks and months which should cause more equilibrium and help keep Southampton property prices in check.

These are interesting times for the Southampton property market. If you are a Southampton homeowner or Southampton landlord looking to buy or let your Southampton property in the coming weeks or months, don’t hesitate to drop me a line to discuss what all the points raised in article mean to you.

 CLICK HERE TO FIND OUT HOW MUCH YOUR SOUTHAMPTON PROPERTY IS WORTH

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.

 

Blog, http://southamptonproperty.blogspot.co.uk/

 

Facebook, https://www.facebook.com/belvoirsouthampton/

 

Twitter, https://twitter.com/sotonbelvoir

 

LinkedIn, https://www.linkedin.com/in/brianlinehan

 

Website, https://www.belvoir.co.uk/offices/southampton

 

Southampton First-time Buyers Can Now Buy Using the Government's 5% Deposit Mortgages

Yet higher mortgage rates could see Southampton buyers paying

a lot more each month for the privilege

Being a Southampton first-time buyer in the last 12 months has not been an easy thing. Just before lockdown there were 400 ‘5% deposit mortgage’ deals and first-time buyers were able to shop around to get the best deal. When the first lockdown hit, 5% deposit mortgages disappeared meaning that many Southampton would-be first-time buyers had the rug pulled from under their feet.

Today, you can count on two hands the number of mortgage deals which allow a 5% deposit. Even worse, the number of hoops one has to jump through to get a 5% deposit mortgage is very high (plus you have to pay handsomely for the privilege, with mortgage rates of at least 4.15%).

In putting down a 5% deposit, you borrow the remaining 95% as a mortgage. These 95% mortgages (or Loan to Value) were very popular with Southampton first-time buyers before the Credit Crunch. Nearly 1 in 6 mortgages were 90% to 95%+ Loan to Value mortgages in 2007 (15.5%), yet as the Global Financial Crisis hit in 2008/9 that dropped to only 1 in 63 mortgages being in 90% to 95%+ range in 2010 – meaning many Southampton first-time buyers were unable to buy their first Southampton home between 2010 and 2015.

 

Yet in the recent Budget, Rishi Sunak has vowed to back the building societies and banks so that they can offer more of these higher 95% Loan to Value mortgage deals.

Many people have said, this will mean there will be a Southampton house price boom – especially as the Stamp Duty holiday is extended until September

This scheme is nothing new as a practically identical scheme was launched by George Osborne in the 2013 Budget with his Help to Buy Scheme. Nearly one in five houses sold in the year after that budget used this scheme, yet Osborne’s was only for first-time buyers and it was only for brand new homes (not second-hand homes). Whilst there is no doubt this caused an increase in house purchases, many commentators said it was a backdoor method to keep the country’s new homes builders afloat.

The big difference with this new 2021 scheme is that it is available for Southampton second-hand homes as well and is open to all Southampton owner occupiers moving home

But the big question is, what interest rate will the banks’ charge?

Although no building societies or banks have yet publicised the mortgage rates they will charge, all the High Street lenders including NatWest, Santander, HSBC, Virgin Money, Barclays and Lloyds have stated they intend to offer these 95% LTV mortgages.

Under the Government’s mortgage guarantee to the Banks, Westminster will guarantee 20% of any mortgage offered at 95% Loan to Value. In principle, that means that building societies/banks should be able to offer the low mortgage rates as those available to people wanting to borrow 75% Loan to Value.

At the moment the average five-year fixed rate mortgage is 3.6%with a 10% deposit but if you have a 25% deposit, you can fix forfive years at 1.63%

However, don’t forget though that the banks will be charged a ‘still to be decided’ amount to use the Government guarantee. On the last Help to Buy Scheme, it was rumoured they were charged 0.9% of the mortgage borrowed, so this cost would have to be passed on to the first-time buyer. I would suspect the eventual rates Southampton first-time buyers will have to pay will be somewhere in the region of 3%.

This new 95% mortgage/5% deposit scheme is only going to work if the banks and building societies have sensible mortgage rates as it needs to help those Southampton first-time buyers it was intended to benefit, who are finding it hard work to get on the first rung of the Southampton housing ladder.

It all comes down to how anxious the banks and building societies feel about the true long-term effect of the pandemic once the furlough scheme ends in the autumn. Only time will tell.

Yet, to give you an idea of the difference the mortgage rates scheme will make on a typical Southampton terraced/town house …

the average price paid for a Southampton terraced inthe last 12 months was £238,900

Assuming a 35-year repayment mortgage and borrowing that amount on each scenario:

1. At the current best 95% LTV mortgage rate (i.e. 5% deposit) of 4.15% mentioned at the start of the article, that would cost £1,079 per month in mortgage payment
2. At the current average 90% LTV mortgage rate (i.e. 10% deposit) of 3.6% mentioned in the middle of the article, that would cost £1,001 per month in mortgage payment
3. At the best 75% LTV mortgage rate (i.e. 25% deposit) of 1.63% mentioned at the start of the article, that would cost £747 per month in mortgage payments

As you can see, quite a difference.

 I have to applaud Rishi Sunak for this initiative, yet will it be ‘fields of clover forever’ for the Southampton property market with the new scheme? Well no, it won’t be!

It will be a good boost to the Southampton (and UK as a whole) property market. Whilst the mortgage guarantee offers a small portion of security for the lenders, it does focus on the riskiest part of the housing market. Many lenders still have cold shivers of the Northern Rock 125% mortgage debacle from a decade ago and those memories still ring true today.

The fact is these types of mortgages will be a higher risk, even if the Government are underwriting them with their smaller deposits, which will come through in bank’s and building societies higher pricing for these mortgages. Also, the lenders are already at near full capacity trying to get hundreds of thousands of existing property sales and purchase deals through because of the Stamp Duty rush over the last 9 months. I await the rates in early April and will make comment again.

If you are a Southampton homeowner, potential Southampton first-time buyer or anyone involved in the Southampton property market and you would like to chat about anything I’ve covered in this article or any of my other articles on the Southampton property market, please don’t hesitate to drop me a line.

Don't forget to visit the links below to view back dated deals and Southampton Property News.

 

Blog, http://southamptonproperty.blogspot.co.uk/

 

Facebook, https://www.facebook.com/belvoirsouthampton/

 

Twitter, https://twitter.com/sotonbelvoir

 

LinkedIn, https://www.linkedin.com/in/brianlinehan

 

Website, https://www.belvoir.co.uk/offices/southampton