Southampton’s Over-50s Wealth Hits Record High as Generational Property Gulf Grows

The Southampton property market is proving increasingly difficult for some younger Southampton buyers, but mature homeowners have benefitted immensely from rising house prices in the last few decades.

How wealth is spread across the generations will always be a controversial issue, significantly as the Baby Boomers (those born between 1946 and 1964) and the older Gen X's (born in the late 1960s / very early 1970s) wealth has grown exponentially over the last two decades, compared to the wealth of the younger generation.

The over-50s in the Southampton area have a record £5,307,401,294 in mortgage-free equity, twice as much as the total in 2011, underlining the generational gap in the Southampton housing market.

 

Rocketing Southampton property prices have helped mature homeowners more than ever, while high house values and expensive mortgages are pricing out some Southampton first-time buyers. Compared to those younger, the gap is quite stark.

Southampton under-50’s own £559m ofmortgage-free property outright.

 

So, how exactly are properties split in the local area of Southampton, how do they compare to the national figures and more importantly - what can be done about it?

 

For under-50’s in Southampton:

·         4.2% own their own home outright, i.e., no mortgage, compared to 6.4% nationally

·         32.4% own their own home with a mortgage, compared to 41.6% nationally

·         18.7% live in social housing, i.e., council house or housing association, compared to 17.8% nationally

·         44.7% live in private rented accommodation, compared to 34.2% nationally

 

For over-50’s in Southampton:

·         43.0% own their own home outright, i.e., no mortgage, compared to 52.1% nationally

·         19.4% own their own home with a mortgage compared to 21.1% nationally

·         25.4% live in social housing, i.e., council house or housing association, compared to 16.5% nationally

·         12.2% live in private rented accommodation compared to 10.3% nationally

 

The stats that jump out at me in the over-50 age range is over 1 in 10 people nationally are in privately rented accommodation, and over 1 in 5 of over-50s still have a mortgage (although that reduces to 1 in 16 by the time they reach the age of 65).

Campaigners have said the younger generation has been priced out of the property market and the goal of getting on the housing ladder has become an impossible dream for many. The wealth gap of the generations shows the older generations have been aided by increasing house prices, leaving their sons and daughters with few options.

 

So, should the mortgage-free older generation of Southampton feel guilty?

 

Well, I expect the older generation to be mortgage free. It typically takes around 25 years to repay a mortgage fully, and mortgages accumulate over time.

Consequently, it's unsurprising that older homeowners possess higher ownership and equity. Similarly, younger homeowners in the present are likely to accumulate more equity and ownership as they age.

Another intriguing observation is that younger individuals often inherit their properties as older people pass away. With the baby boomer generation experiencing a significant increase in mortality, this transfer of property is expected to occur frequently.

 

Neither should the Baby Boomers and Gen X’s feel guilty. Many can remember mortgage rates at 16% in 1992.

 

Also, older Southampton people faced more significant difficulties in obtaining mortgages when they were younger. They encountered strict caps on mortgage sizes and had to contend with considerably higher interest rates.

Additionally, the older generation in Southampton tended to lead more austere lives in the 1960s and 1970s and saved more money.

When housing construction and supply were relatively robust, demand was constrained during that period. Consequently, Southampton house prices were significantly more modest than today's soaring prices.

The present situation reflects the last three decades of stringent house-building restrictions imposed by every political party, combined with a flood of inexpensive money from the banking system since 2008 and substantial immigration (who also require housing and age over time).

 

As a result, an inevitable surge in British house prices has occurred.

 

Today, younger Southampton people tend to delay marriage, postpone having children and pursue higher education. As a result, they enter the housing market at a later age, but they generally express contentment with this arrangement.

As I said recently in my Southampton property blog, first-time buyers have been on the rise lately, albeit their average age is now 33.4 years old (compared to 30.6 years old in 2005 and 23.6 years old in the 1960s), meaning they won’t be paying off their mortgage until later in life.

 

What could be the answer(s) to help solve this issue in the Southampton property market?

 

One is to build more houses – and that requires a willingness as a society to build on land that many might not want to build on (a political hot potato at the best of times!).

Secondly, we need to help older Southampton homeowners to downsize, freeing up their larger homes for younger generations.

 

Most over-50s live in average-priced family properties with no enticement to downsize.

 

Their children have flown the nest, and they rattle around a house often too big for them (as I discussed a few months ago and many have homes with two or more spare bedrooms). This country requires more bungalows and suitable houses for mature homeowners' lifestyles.

As a society, we need a discussion between the generations on how the £3 trillion of mortgage-free equity tied up in property owned by those who are 50 years old and above can be used to help the younger generation (i.e., their children and grandchildren), theoretically improving their prospects of affording their own home.

These are interesting times ahead. What are your thoughts on the matter? Do share your thoughts in the comments.

Southampton First-time Buyers Keeping our Local Property Market Afloat

The Southampton housing market is relativity buoyant, thanks to an unexpected group of people – Southampton first-time buyers.

Many Southampton tenants are annoyed with competing for Southampton rental properties at high rents. Therefore, over the last 12 months, many renters have been stretching their finances to get on the Southampton housing ladder, despite sky-high mortgage rates.

 

Using data from the Office of National Statistics, Land Registry and the Bank of England …

 

of the 4,479 properties bought in the last 12 months in the Southampton area, 1,214 were bought by first-time buyers.

 

With just under 1 in 3 house purchases made by first-time buyers in the last 12 months, it might surprise many that this has been steadily growing since 2010 when only 1 in 5 house purchases were made by first-time buyers.

Surprisingly, first-time buyers have remained the most resilient group of property buyers, even during these difficult times.

Usually, first-time buyers would be the most affected in times of stress in the property market (like in the last two property market crashes of 1998 and 2008). However, this time is different. Despite the sky high mortgage rates, the rental market and its high rents are making buying a more attractive option for many Southampton renters.

In Q1 2021, the average rent in the Southampton area was £934 per month.

 

The Southampton area rental market has experienced soaring rents in the last two years, with the average rent increasing to £1,151 a month in Q1 2023, an increase of 23.2%.

 

(Southampton area being SO14-SO19).

There are multiple reasons why rents are rising.

One reason includes higher mortgage rates for landlords, passed on to tenants in increased rents.

Some Southampton landlords with high % mortgages are selling their buy-to-let portfolios because of the Section 24 taxation rule changes and leaving the market entirely. Another reason is fewer landlords are buying rental properties to let out, with only 1 in 8 house purchases being made by landlords.

Meanwhile, demand for Southampton rental properties is high.

With demand outpacing supply, some Southampton renters are forced to accept higher prices or offer more than the asking price to secure new tenancies.

 

Other Southampton tenants are offering to pay six to twelve months rent in advance to strengthen their negotiating position.

 

This situation has made many Southampton renters move forward with their plans to buy a home for themselves, despite the increasing costs of home ownership.

But what about the deposit?

It appears the ‘Bank of Mum & Dad’ are helping first-time buyers with their deposits. The national average deposit paid by first-time buyers was just over £63,000 in January '23, which was 23.4% of their purchase.

The lowest rate for a two-year fixed first-time mortgage with a 23% deposit is 4.13%, up from 2.86% a year ago.

So, how can Southampton first-time buyers reduce their monthly payments? They can do it by increasing the length of their mortgage. For example, increasing your mortgage term from 25 to 30 years will save you £45 per month in mortgage payments for every £100,000 borrowed.

 

Eleven out of twenty first-time buyers are taking out mortgages of 30 years or more, the highest level since records began in 2005.

 

But what about those buyers with a low deposit?

According to the Moneyfacts website, the number of available 95% mortgage deals has risen from the early 160s in early March to nearly 210 last week. This is the highest level since September 2022, showing that banks are not worried about a property price crash. Moreover, the Coventry and Nationwide Building Societies have reduced their mortgage rates on low deposit (90% to 95%) mortgages over the past few weeks. The average 2-year fixed 95% mortgage is 5.64%, and the best rate is 4.9%.

However, Skipton Building Society has even launched structured products for certain first-time buyers that will not need a 5% deposit if the buyer can prove their rental history (about time too if you ask me).

The government mortgage guarantee scheme was also extended into 2023, which partially insures the bank/building society on any defaults on their 95% mortgages. It has been recognised for keeping some of these low deposits available for first-time buyers.

 

The outlook for the Southampton property market is uncertain, but a comparatively soft landing is still the most likely outcome.

 

With first-time buyers fuelling the market, interesting times lay ahead!

These are my thoughts, do share yours.

Southampton Homeowners Worried About the Property Market? The Latest Quarterly Data Might Surprise You!

In my articles on the Southampton property market, I like to provide an insight into the real story of what is happening in our local (and national) property market and address the misconceptions that some of the media have been spreading.

Despite almost daily reports of a housing market crash since September 2022, the data shows that the UK (and Southampton) property market is gingerly doing OK.

So, let’s dive into the stats and start with the life blood of the housing market – new properties coming on to the market.

Nationally, 407,946 UK properties came onto the market in Q1 2023.

(Q1 = Jan & Feb & March)

Interesting when compared to the 7-year average (2017 to 2023 inclusive) of 403,105 new properties on the market in Q1.

New properties coming onto the market are a critical bellwether of the property market.

If we had a situation like 2008, where the number of properties coming on the market in 2008/9 was double that of 2007, supply outstripped demand and hence economics dictated and house prices fell.

 

The balance of houses coming on the market and how many sell determine what happens to property prices.

 

So how do you know if we are heading for another Southampton house price crash as we did in 2008 or not, as the case maybe?

Let me share a quick and easy way to find out before anyone else.

Firstly, do a Rightmove search on your chosen property market and map the number of properties for sale every week. Next, do the same search, but this time include sold subject to contract properties. This will show you can see how many properties are available and how many sold subject to contract (stc). The third step is to calculate the ratio between the first two numbers: i.e., what’s available versus what’s been sold.

If the ratio of sold property to available property rises monthly, the market is improving. If the ratio is falling, the market is slowing.

If you really wish to go deep into this; you could split the search into property type (and bedrooms) you are selling and buying e.g., detached, semi, terrace or flats. This will help you to judge demand and supply and time the market to your advantage.

 

Next, looking at house sales nationally, 276,482 properties sold (stc) in Q1 2023.

 

However, the devil is in the data. The 276,482 properties sold stc is not very good when compared to the 7-year Q1 average (2017 to 2023 inclusive) of 306,532.

Yet that average includes Q1 2021, where 397,402 properties had sold stc and Q1 2022 when 341,888 properties sold. Both of those years were exceptional; however, when we compare Q1 2023 to the Q1 average of 2017/18/19/20, a more reasonable 282,488 houses were sold on average.

Next, I wish to look at what is selling nationally by price band.

 

Nearly half (44%) of all the properties sold in the UK in Q1 ’23 were £250,000 or less, yet only just over a third of the homes (36%) that came on the market in the UK in Q1 '23 were £250,000 or less.

 

The lower end of the property market is performing better than the higher end.

Looking locally at the Q1 stats, starting with the number of properties in the Southampton area (SO14 to SO19) that came onto the market in Q1 2023…

 

1,387 properties came onto the market in Q1 2023 in the Southampton area.

 

The average price of those Southampton properties coming to the market was £287,195.

The price range/band that saw the most listings was the £250k to £300k range, where 287 Southampton area properties came to market.

Now, looking at sales in Southampton…

 

1,092 properties were sold in Q1 2023 in the Southampton area.

 

The average price of those Southampton properties selling was £269,235.

The price range/band that saw the most sales was the £250k to £300k range, where 256 Southampton area properties were sold.

 

Typical first-time buyer properties are leading the recovery.

 

Although economic turbulence remains, the property market is gradually moving towards pre-pandemic activity levels.

The national sales agreed in this lower price band are unexpectedly recovering the fastest. However, larger, more expensive home sales are lagging (e.g., 8.5% of listings in the UK in Q1 '23 were in the £750k to £2m price band, yet only 6.4% of the sales were in the same band). The £2m+ price range, even though the numbers are quite small, the difference is quite startling (1.2% of listings were £2m+, but only 0.6% of sales agreed were in the same range).

The average mortgage rates fell back from their peak last year, with the best rate for a 10% deposit five-year fixed mortgage now 4.6%, compared to last October at 6.62%.

However, this isn’t as good as the 10% deposit 5-year mortgage at 1.64% in January 2022.

So, what does this all mean for homeowners wanting to sell in this market?

Realistic pricing when you put your house on the market is everything!

 

In Q1 2023, there have been 243,602 price reductions on the 590,481 properties on the market, compared to 119,068 price reductions in Q1 2022 on 424,796 properties on the market.

 

It is better to come on the market at a realistic price to start when the property is fresh to the market, than go on at a high price, lose that initial honeymoon period and then reduce it, only for some people to wonder what was wrong with the property.

The Southampton property market is seeing stability and confidence return as it recovers from the turbulence at the end of 2022. The pace of the market had reached an unsustainable level in the last two years, and it was on track to slow to a more normal level.

The reaction to September's mini-Budget accelerated the speed of this slowdown.

Although higher mortgage rates and economic headwinds present challenges, many potential home buyers who were effectively sidelined in the fierce bidding wars of the last two years will find that a slower paced property market gives them time to plan a strategy for their next move as we go into the traditionally busy post-Easter house buying season.

 

While the demand for quality Southampton houses is still healthy, if the asking price is above the current market, sellers may need help finding buyers.

 

Determining a realistic price is crucial but not easy. Many sellers look at similar properties on property portals, but those prices may be over-inflated.

Estate agents have more tools at their disposal, such as comparing sale prices for comparable properties and thinking about prospective purchasers in the market for the type of property under valuation.

Although getting the price right can be difficult, revising it downwards quickly is essential.

Sellers should ensure that their property looks better value for money than similar properties. If you plan to trade up, it is good sense to sell at realistic prices, as you will gain substantial savings compared to moving in the last few years.

However, if you don't need to sell urgently, becoming a landlord could be an option - again I can help on that if needs be. Nevertheless, homeowners-turned-landlords should consider that if property values do drift downwards in the coming 12/18 months, it may take a few more years after that to recover to those values seen last year.

 

Whatever the rest of 2023 brings, moving home should mostly be based on your circumstances and not solely on what is happening to Southampton property prices.

 

If you would like an informal chat about your potential move without any obligation or cost, get me around for a chat. I promise I will tell you like it is, without any guff – then you can decide what is best for you and your family.

In the meantime, do let me know your thoughts in the comments below.

Unveiling the Secrets of Southampton's Housing Market: Insights from the 2021 Census

The property market is one of the most important economic indicators, as it can significantly impact the prosperity of both the local and national economy.

Recently, new data from the Census 2021 has become available that sheds light on seldom discussed areas of property, such as the types of properties Southampton has, together with how we live in and use our homes.

This data could be of interest to all Southampton people. However, it should be fascinating to Southampton homeowners and landlords, as it can help them make informed future decisions about buying, selling and renting property.

Furthermore, comparing the data to the national statistics can provide a broader perspective and a better understanding of how we live in our homes in Southampton.

In this report, I will analyse seven measurements from the new Census data to assess the city's housing stock and provide valuable insights for potential buyers and sellers.

The seven metrics I have selected provide essential information about the city's demographics, housing types, and tenure.  

 

1.      Population and households of Southampton.

Knowing the population of a city is essential for a variety of reasons. First and foremost, it helps us understand the demographic makeup of Southampton. This information is crucial for local authority officials and businesses as they decide where to allocate resources and how to serve the community's needs (like whether we need to build more new homes, for example).

Looking at demographics allows for better long-term planning and development (and for savvy buy-to-let Southampton investors to spot opportunities years in advance). Additionally, population data can help identify trends and changes in the community over time (I will revisit this in future articles where I will discuss the growth of Southampton over the last few decades and what that means for the property market and long-term house prices). Finally, having accurate population figures is necessary for allocating government funding and resources, making it critical for our city's overall health and well-being.

 

The population of Southampton currently stands at

249,600 in 102,600 households.

2.      The age profile of the people who live in Southampton.

The age profile of a city's population provides valuable insights into the local property market. For example, suppose the city has a large population of retirees. In that case, it is more likely to have a higher demand for bungalows or sheltered accommodation. In comparison, a city with a large student population may have more demand for shared accommodation. Knowing the age profile of the city's population is crucial for targeting the right buyers and understanding the potential market for different types of properties.

 

13.5% of Southampton's population is 65 years and over,

compared to the national average of 18.4%.

Again, I will delve into this in more detail in my articles on the Southampton property market in the coming months.

3.      Southampton household composition - one-person households vs family households.

Understanding household composition is crucial for predicting the demand for different properties. For example, if the city has a large population of single people, there may be more demand for one-bedroom apartments or studios. However, if the city has many families, there may be more demand for three or four-bedroom houses and schools.

 

32.9% of Southampton households are one-person households (compared to 30.2% nationally), and 57.3% of Southampton households are single-family households (compared to 63.0% nationally).

 

The remainder is made up of shared accommodation etc.

4.      Southampton accommodation types - house or apartment.

Knowing the accommodation type is critical in understanding the local property market's demand and supply. For example, if the city has many apartments, it may indicate that the city has a higher demand for properties with lower maintenance costs or land is too expensive to build houses on. Conversely, if the city has a higher than the national (or regional) average number of houses, it may indicate that it has more families looking for larger properties.

 

58.5% of the homes in Southampton are houses

(compared to the national average of 77.9%).

5.      Number of bedrooms in Southampton.

The number of bedrooms is another crucial factor that affects the local property market. Knowing the average number of bedrooms in the city can help predict the demand for different property types. For example, if the city has many four or five-bedroom properties, it has more affluent buyers looking for larger properties.

·         20.5% of Southampton homes are one-bed households (11.4% nationally)

·         30.1% of Southampton homes are two-bed households (27.1% nationally)

·         36.7% of Southampton homes are three-bed households (40.4% nationally)

·         12.6% of Southampton homes are four-bed or more households (21.1% nationally)

6.      Occupancy rating for Southampton bedrooms - whether a property is under-occupied or overcrowded.

Knowing the occupancy rating for bedrooms is critical in understanding the local property market's demand and supply. For example, if the city has many under-occupied properties, it could indicate people living in homes too big for their daily needs.

 

24% of Southampton homes have two or more spare bedrooms

(compared to the national average of 42.7%).

7.      Tenure of Southampton households - whether owned outright, owned with a mortgage, social housing or privately rented.

Understanding households' tenure is essential in understanding the local property market's demand and supply. For example, if the city has a high number of households in social housing, it may indicate that there is less demand for private rental properties. Conversely, if the city has an increased number of households owning properties outright, it usually suggests that there are more older homeowners (compared to younger homeowners)

·         22.6% of Southampton households own their home without a mortgage (compared to 32.8% nationally)

·         26.3% of Southampton households own their home with a mortgage (compared to 29.7% nationally)

·         21.9% of Southampton households live in social housing (compared to 17.1% nationally)

·         29.3% of Southampton households live in private rented accommodation (compared to 20.4% nationally)

So, what is all this telling us?

The seven metrics discussed in this article on Southampton provide valuable insights into the city's demographics and the future of Southampton’s property market's demand and supply.

As a Southampton estate agent, having a deep understanding of these metrics can help me better target potential buyers, predict the demand for different types of properties and provide valuable insights and advice to Southampton house sellers, buyers and buy-to-let landlords.

If you are considering moving home in 2023 and want to know how this data will affect your buying or selling decisions, please do not hesitate to contact me for a personalised no-obligation no-cost consultation.

I am here to help you make informed decisions and find your dream property in this thriving city of Southampton.

 

Cautious Optimism in the Southampton Property Market

 

As the British and Southampton property market navigates the ongoing economic turmoil, many Southampton homeowners and landlords may feel uncertain about the future.

However, up-to-date data suggests that the 2023 property crash predicted by the many newspapers and the usual clickbait doom-mongers in the lead-up to Christmas on social media, may not be as bad as initially thought, and there are reasons to be cautiously optimistic.

According to property website Rightmove, the average asking price of a home for sale in the UK rose by just £14 in February.

While this might sound like cause for concern, asking prices remaining flat rather than falling could be seen as a positive sign for the year ahead. Remember that they are only what people are asking (and not necessarily achieving).

So, what exactly is happening in the Southampton property market?

Well, it all starts with realistic pricing.

 

Thankfully, most Southampton sellers are heeding their estate agents' advice and being more realistic on price, helping maintain market stability.

If you are realistic with pricing, the property should sell.

The time it takes to get a property to sale agreed upon has increased nationally from 21 days in the summer of 2022 to around 50 days in Q1 2023.

Additionally, despite the turbulent economic conditions, buyer demand is rising. Rightmove also reported in the national press that the number of people contacting estate agents has increased by 11% in the last two weeks compared to the same period in 2019.

The number of sales agreed upon has also rebounded.

 

Nationally, from 1^st January to the 19^th February 2023,

134,886 properties had been sold subject to contract in the UK.

Not a good figure when I compare it with the same year-to-date sale agreed figures from the last couple of years.

2022 - 173,607 properties sold stc

2021 - 193,607 properties sold stc

But the last couple of years have been extraordinary for the UK property market and should be taken with a pinch of salt in some respect. We must compare 2023 with more normal years, like 2017/18/19/20. This tells a different story.

2020 - 151,694 properties sold stc

2019 - 143,504 properties sold stc

2018 - 138,665 properties sold stc

2017 - 134,503 properties sold stc

 

The picture looks similar when we look closer to home in Southampton.

In Southampton (SO14 to SO19), in the first seven weeks up to the 19^th February 2022, 688 properties sold subject to contract.

This year, from the exact 1^st January to the 19^th February timeline, 557 properties have sold stc, which is lower, yet in the same ballpark as 2017, 2018 and 2019.

Yet it is all terrific selling a house (subject to contract); it is still only sold subject to contract, meaning the sale could fall through (as it is not legally binding).

As an agent who likes to delve deeper into statistics, I considered the 'net property sales'. (Net Property Sales being the gross number of properties sold that week less the sale fall throughs in the same week).

In the three months leading up to the Mini-Budget in September 2022, there was an average of 17,801 ‘net property sales’ per week in the UK. That dropped by 34.7% two months after the Autumn Mini-Budget to an average of 11,624 ‘net property sales’ per week in the UK.

 

In the last five weeks, that has rebounded to 17,050

‘net property sales’ per week.

 

And when you consider the average for the same five weeks in 2017/18/19 was 18,330 'net property sales' per week, we are close to what many considered a normal market.

Improving market conditions has been supported by a reduction in average mortgage rates. Homebuyers taking out a five-year fixed-rate mortgage with a 15% deposit can expect a rate of 4.39% (correct at the time of writing with HSBC), down from an average of 6.1% in early October. This reduction in mortgage rates may have contributed to the recent increase in buyer demand.

 

These positive signs in the market have led some experts to suggest that a ‘softer landing’ for the UK property market than initially expected could be on the horizon.

The combination of sellers being more realistic on price and an improving picture of the number of agreed-upon sales suggests a more positive outlook for the property market.

I advise Southampton homeowners coming to market in the upcoming spring season to use their agent's expertise and get the price right the first time to find the right buyer more quickly. If you do wish to chance a higher asking price, only do so for no more than two weeks. If you haven't sold by then, take the agent's advice and realign your asking price.

 

428 Southampton homeowners have realigned their

asking prices since 1^st January 2023.

 

While it's true that some first-time buyers may still be priced out of their original plans and may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets, there is still cause for optimism.

There is still a considerable demand for buying property in Southampton - renting is becoming increasingly unattractive for many people as rents are increasing by double digits percentages.

It is important to remember that purchasing a property always involves a trade-off between what one desires and what is affordable, regardless of the market conditions. For example, while a four-bed detached house may be out of reach, a larger and older three-bed semi-detached property may be a more realistic option (and probably have similar square footage).

 

Southampton landlords looking to invest in buy-to-let homes – now may be a good time, as rising rents could offer attractive returns.

 

Of the 1,134 properties let in Southampton since the 1^st January 2023, the average rent achieved has been £1,174 per month. This is a significant drop in the number of properties let in the same first seven weeks of the years of 2017/18/19 and a massive increase in rents.

Finally, the newspapers will be full of news about house price drops in the coming months. All the indexes report house sales where the sale agreed price was offered nine to eleven months ago and completed (i.e., monies and keys handed over) three or four months ago. This peculiar time lag means the house price data is nearly a year old before publication.

So, if you decide to buy a home on that information, you are using old property data. In late 2021/early 2022, there were 30+ viewings per property, and people paid way over the asking price to secure a property. Now there is more 'normality' in the Southampton housing market; today's prices are also more normal (at or slightly below the realistic asking price). So yes, the house price indexes will show a reduction in house prices. The newspapers will say house prices are crashing, yet when it is explained I have above ... whilst it is not a newspaper clickbait title - it is the truth and it’s more of a return to more 'normal house prices'.

 

So, prepare for clickbait newspaper headlines of a house price crash (because ‘bad news sells newspapers’ as the saying goes).

 

Also, prepare for the doom-mongers to quote the bad news of the earnings-to-house prices ratio at one of its highest levels ever.

Earnings-to-house price ratios are a poor measurement of health in the UK property market. Instead, I believe Nationwide's measure of first-time buyer mortgage payments as a percentage of take-home pay is better (as it is actual pound notes out of actual pay packets).

The Nationwide measure of first-time buyer mortgage payments as a percentage of take-home pay has grown for first-time buyers from 30.4% in Q4 2021 to 39.4% in Q4 2022 … a massive rise! Yet mortgage interest rates have dropped since then (so that percentage will fall). Also, to give some context, let us not forget that percentage in 1989 was 48.4%.

Ultimately, Southampton homeowners and landlords should decide, based on their unique circumstances, rather than being swayed by newspaper headlines or general market trends. Anyone uncertain about the property market's future should contact me for my opinion, advice and guidance.

Is your Southampton home bigger than 904 sq ft?

 

Southampton Homeowners - Do you know how big your Southampton home is?

What is the square footage of your Southampton home?

Don’t worry, most of us don't - yet it could be fundamental as Southampton home buyers search for new homes.

 

Us Brits are obsessed with our homes, yet most Southampton homeowners need to learn the square footage (those born after the mid-1970s) or square metre(age) of their homes.

 

As an agent, I find homebuyers usually assess the size of their intended house purchase chiefly by the number of bedrooms the property offers. However, could we all make more effort to calculate how much actual space we require in the home outside the number of bedrooms?

Let me see how the properties locally are split down regarding bedrooms.

The split of bedrooms in Southampton is as follows:

·         20.6% of properties have one bedroom compared to the national average of 10.7%

·         30.2% of properties have two bedrooms compared to the national average of 26.7%

·         36.7% of properties have three bedrooms compared to the national average of 40.6%

·         12.5% of properties have four or more bedrooms compared to the national average of 22.0%

As one would expect for our location in the UK, we have a higher number of 2 and 3-bedroom homes in our locality.

 

So, are more bedrooms better? Not necessarily.

 

Unless you are buying a Southampton property to develop and then sell on straightaway, I believe it is imperative to enjoy your property for what it was designed to be – your home.

Though room for growth and resale ability potential of the house purchase is vital, the manner of the way you and your family live and how you use your home must be the primary consideration for improving your quality of life. And because of this …

 

I have noticed a slight change in how Southampton buyers (and tenants) have been asking and enquiring about property in the last 18 months.

 

The first is asking for a property’s energy efficiency rating. This can be seen on the property’s Energy Performance Certificate (EPC). That was expected, with the rise in gas and electric bills.

Yet the second is that more and more Southampton tenants and buyers are asking about the size of the property, which can be found in the EPC mentioned above.

Talk in the property industry suggests a move towards home movers wanting homes with minimum square footage instead of a property with a particular number of bedrooms.

 

I am noticing mature Southampton homeowners who are downsizing are asking for the size of a property, as they require fewer yet larger rooms.

 

Should we all consider how we use our space in our Southampton homes before we decide to move? Before we do, let’s look at the average sizes of the properties locally.

These are the averages for the Southampton area.

·         The average size of a house is 1,065 sq. ft. compared to the national average of 1,103 sq. ft.

·         The average size of a bungalow is 818 sq. ft. compared to the national average of 862 sq. ft.

·         The average size of a flat/apartment is 398 sq. ft. compared to the national average of 464 sq. ft.

·         The average size of a maisonette is 538 sq. ft compared to the national average of 657 sq. ft.

·         The overall average is 904 sq. ft. compared to the national average of 994 sq. ft.

 

Again, as I would expect due to our location, the average home is smaller than the national average.

In the last few years, with lockdowns, as a nation, we have started to use our homes differently.

Rooms in our homes have become interchangeable - having more bedrooms isn't automatically the status symbol it once probably was.

Spare bedrooms have become offices, dining rooms have become gyms, and so on.

Are you willing to sacrifice living room space for an extra bedroom, even if it makes the living room feel cramped and uncomfortable?

 

Before selecting a home based solely on the number of bedrooms it offers, there are several factors to consider.

 

Evaluate your current living space and how you use it.

 

Determine if you utilise all the rooms to the best of the space available, if you have enough storage, and if the layout works for you. If you value space and openness, prioritise square footage instead of bedrooms.

Consider your current life stage and living space needs. If you have a family, bedrooms may be a priority, but assessing how many are needed is essential. It would help if you also considered whether you need a separate space for work or a top-of-the-range ensuite.

 

If you plan to rent out your Southampton property, the number

of bedrooms is crucial.

 

However, it is essential to consider the type of Southampton tenant you want to attract and what type of space would be most marketable.

Instead of moving to a new Southampton home, renovating your current space might be a better option?

By reconfiguring the space or extending it, you could improve your quality of life or increase the value of your Southampton property. A home makeover could give you the open space or environment you desire?

By answering these questions, you can determine whether the number of bedrooms, other rooms, or square footage is the most crucial factor when selecting a new home.

What do you think?

Before I go, if you are a Southampton homeowner or property buyer and you want to pick my brains on your best options, please don't hesitate to pick up the phone or drop me a line and we can start a discussion without any obligation or cost.