How did the Southampton property market fare against the rest of the UK in 2014?

We have all seen the growth in property prices during 2014 and the cooling off in the last quarter. London has taken the headlines and has returned 17.8% growth and the UK as a whole has seen increases of 8.3% on average, but averages can hide a lot!!
So looking at the UK in a little more detail:

REGION	AVERAGE PRICE	ANNUAL % CHANGE	QUARTERLY CHANGE
Wales	£141,631	1.4%	-0.6%
Scotland	£142,527	4.2%	0.5%
Northern Ireland	£120,685	8.1%	1.6%
England	£226,809	10.6%	1.6%
UK	£189,002	8.3%	1.1%
London	£406,730	17.8%	2.5%

Wales has struggled with Cardiff returning only 4% growth. Scotland faired a little better with Aberdeen the top city with 12% growth. Northern Ireland did well with Belfast being its star pupil at 17%. It was very patchy in the North of England with Manchester returning zero growth, Sunderland 5% and Leeds was the star at 14% growth.

So how has Southampton performed compared to other cities and towns in the South of England:

REGION	Q4 PRICE	ANNUAL % CHANGE
Bristol	£277,638	14%
Brighton & Hove	£394,755	13%
Portsmouth	£221,742	12%
Bournemouth	£274,057	11%
Swindon	206,917	9%
Southampton	£252,513	8%
Isle of Wight	£206,695	8%
Bath	£286,190	7%
Poole	£275,247	7%
Plymouth	£184,553	5%
Cheltenham	£252,925	-2%

Well Southampton is mid table (I know the Saints wouldn't be happy with that) on property values and growth rates and that's a nice place to be!  Our property is not too expensive, sure it is £19,000 more expensive than last December but with steady growth it can provide a good investment platform. An 8% capital growth together with a gross yield of 6% provides an attractive overall return of 14%.

2015 will bring its challenges, as we have seen house price growth has moderated over the last number of months but of more concern is the decline in the number of mortgage approvals which fell to their lowest level for 16 months in October. The economy is going in the right direction, employment is improving and wage growth is starting to happen after a long period of decline. And of course interest rates are low and will remain so for some time, sure they will tick up and may end up at circa 3% in 18 or 24 months’ time. The recent stamp duty changes will also have a positive impact for Southampton property buyers. In the outer South East region about 85% of all transactions will benefit from lower stamp duty cost by an average of £1,571. (Source Nationwide analysis of Land Registry Data 2013/14).

You can't get away from the fact that there is a shortage of housing in the UK. We have a requirement for about 240,000 new homes a year and since 2008 we have only been producing 120,000 - thats a deficit on the supply side of some 840,000 homes and as a result of that we have seen more people move into the private rented sector and the age at which someone acquires their first property is now almost 30. But first time buyers are now getting more active and will continue to be, as long as the supply comes through. But it takes time to fix the supply side there are infrastructural issues, planning issues and political issues to overcome. All of this points to a growth in the private rented sector which will support and grow values here in Southampton.

So if you are thinking of investing in Southampton the returns look good but you need to do your homework. You need to buy the right asset in the right location and above all else don't over pay for it - it will destroy your yield and you will spend a long time catching up. I know the Southampton property market well and if I can assist you please call me and we can have a chat over a coffee.
http://www.nationwide.co.uk/about/house-price-index/download-data#tab:Downloaddata

Tenants' referees may not have right to confidentiality

A newspaper consumer column has highlighted a potential problem for letting agents and landlords - that is, a tenant has an apparent right to see a reference even if the referee who authored it does not give consent and even if it identifies the referee in question.

 

Observer consumer champion Anna Tims  received a letter from a tenant stating: “I have been turned down by a letting agent for a flat as I failed the referencing. It couldn’t tell me why, so I contacted Blinc Referencing, which handled the process. It refused to tell me. Are they allowed to do this? Is this a data protection issue? MH, London.”

 

Tims says she contacted Blinc, which says it withholds references to protect its referees. 

 

“We would be able to write to the referees to ask if they would be happy for us to provide the applicant with a copy of the full reference,” says Blinc director Darren Bignall. “If they decline, then we would not be able to do so.”

 

But Tims says this position contradicts consumer protection laws. According to the Competition and Markets Authority guidelines - confirmed to Landlord Today’s sister site Letting Agent Today by the CMA this week - the tenant’s right to know the reasons for a failed check outweigh a referee’s right to confidentiality. 

 

“The failure to explain why a check was failed may count as a misleading omission since it deprives the tenant of the chance to defend their case. You have the right under the Data Protection Act to request a copy of your personal data," advises Tims. 

http://www.landlordtoday.co.uk/news_features/Tenants-referees-may-not-have-right-to-confidentiality

Oxford landlord fined for running unlicensed, poorly maintained HMO

An Oxford landlord has been handed fines totalling £4,500 for renting out a House in Multiple Occupation (HMO) that was unlicensed and in a state of disrepair.

 

Jeffeth Junior Latchman, 49, of Garsington appeared before Oxford Magistrates' Court on Monday 5 January 2015 after being prosecuted for running the HMO in Nowell Road.

 

Concerns over conditions at the property and its status were raised when one of the tenants complained to the City Council about the poor living conditions in the property.

 

An environmental health officer from the City Council's HMO Enforcement Team visited the property in August last year to follow up and deal with the tenants’ concerns. The officer determined the property to be an unlicensed and unsafe HMO in disrepair, which was also infested with cockroaches.

 

Latchman pleaded guilty to being in control of an unlicensed HMO and received a fine of £2,000 for failing to obtain a licence.

 

He also pleaded guilty to five breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006, and was fined £500 per offence. Three of the offences were failing to ensure that adequate safety measures were taken within the property, including a broken fire alarm system, an obstructed means of escape in case of fire and lack of fire resisting doors. Two further offences were for disrepair.

 

In addition, the Magistrates' Court ordered Latchman to pay all the council's costs of £815 for bringing the case to court.

 

Councillor Ed Turner, board member for finance, asset management and public health, says: "It is good that this landlord has been brought to book for running a cockroach-infested property in the way he did.

 

"Landlords who fail to meet their responsibilities to their tenants and the wider community should be in no doubt that they will be prosecuted, and the courts are now imposing substantial fines."

http://www.landlordtoday.co.uk/news_features/Oxford-landlord-fined-for-running-unlicensed-poorly-maintained-HMO

NLA reveals figures on landlord investment

The combined cost of buy-to-let (BTL) mortgage repayments in the past 12 months is £21.9bn according to the National Landlords Association (NLA).

 

Research from the NLA reveals that approximately one million (1.05m) landlords in the UK have some form of BTL borrowing, with the average cost of their mortgage repayments in the past year £20,950.

 

The staggering figure, which excludes upfront deposits of typically 25% of property value, emerges shortly after the Bank of England announced a high of £8bn of BTL lending in quarter three of 2014.

 

The NLA’s findings show that landlords with smaller portfolios (1-4 properties) spent an average of £10,335 on repayments last year, compared to £55,285 spent by those with larger portfolios (11 or more properties).

 

On average it takes six weeks for a landlord to secure a BTL mortgage, with one in five (19%) landlords waiting over two months to complete their BTL application.

 

Carolyn Uphill, NLA chairman, said: “These figures really hammer home just how much money private landlords put into providing much needed homes for the UK’s estimated nine million renters, especially  if we consider that such a large proportion are single-property or smaller portfolio landlords.  

 

“The majority of private individual investors are keeping a supply of well-maintained homes on the market when previous governments have failed to incentivise or stimulate more housing and social housing has been in long term decline.

 

“There’s no sign of either of these issues letting up anytime soon so is it any wonder that BTL lending is at an all-time high? It’s hard to imagine exactly where all this investment would come from if landlords weren’t financing housing to such an extent.”

 

The NLA is also reminding landlords to prepare for future rises to interest rates and has produced new guidance about dealing with the issue in order to minimise the effect it has on their lettings business.

http://www.landlordtoday.co.uk/news_features/NLA-reveals-figures-on-landlord-investment

First time buyers are back - with a vengeance

The number of people buying a home for the first time surged to a seven-year high last year, despite prices rising by an average of nine per cent.

The Halifax First Time Buyer Review charts a 22 per cent rise in those purchasing their first property, hitting a total of 326,500 last year.

It marked the highest level since before the financial crisis as average prices rose to £172,000.

However, the report noted that the average cost of a deposit for first-time buyers fell seven per cent in 2014 to £29,218 helped by record-low interest rates and an improvement in competition for mortgages.

House prices grew in the first half of the year, spurred by initiatives such as the government's Help to Buy scheme.

But in the second half of the year fears of a housing bubble saw the Bank of England impose stricter lending limits on borrowers in a bid to cool the market.

The report also stated that Chancellor George Osborne's stamp duty changes, announced in the autumn statement last month, reduced the average first-time buyer's tax bill by £781.

The average age of a new purchaser rose to 30 from 29 in 2013, while the region with the oldest average age was London at 32, the report found.

http://www.estateagenttoday.co.uk/1813-first-time-buyers-are-back-with-a-vengeance

UK owner-occupation now down to 64.6%

Startling figures released by Eurostat, the European Commission’s official statistics bureau, show that 64.6 per cent of households in Britain are owner occupiers - well below the 73.3 per cent peak in 2007.

Britain’s total is also well behind the all-Europe average of around 70 per cent owner occupation.

The Eurostat figures - although only just issued - are for 2013 and analysts such as Matthew Pointon of British consultancy Capital Economics believes the proportion of British owner-occupiers will have fallen further during 2014.

Eurostat also claims that of the approximately 2.9m new homes constructed in Britain between 2000 and 2012, some 2.5m of them have gone into the private rented sector - presumably mostly through individual buy to let and more recently through build to let.

Perhaps Eurostat’s single most controversial claim is that only 400,000 of the homes constructed in that 12 year period were purchased by owner occupiers.

http://www.estateagenttoday.co.uk/1803-uk-owner-occupation-now-down-to-64-6