What’s the Difference Between a Flat and an Apartment in Southampton?

·       "An apartment is over £100 grand and a flat under £100k", said my friend.

·         Joking aside, there is no difference, call it what you will, the humble apartment/flat has served Southampton well over the years.

·         The average sale price of an apartment in Southampton in 2021 was £198,838, making it an excellent first-time buyer purchase and buy-to-let investment.

·         In this article, I want to look at the apartment/flat in Southampton and how it could solve the county’s housing crisis.

The word ‘Apartment’ derives from the French word ‘Appartement', which comes from the Italian form of the word, ‘Appartamento’. The core of that Italian word ‘appartare’ means ‘to separate’, as in ‘separate a building’.

The word comes from Roman times when housing costs were so expensive within the city walls of Rome. Savvy property owners split (or separated) their houses into what we know as apartments or flats today.

The word flat is derived from the Old Scottish/Old English word 'flet'. The flet is the interior of the home. Some also think the phrase stuck as most flats are on one floor, and so by definition, the accommodation is on the flat (i.e., no stairs inside).

The country has an enduring housing shortage. Not enough homes are being built, and even though the Government is aspiring to build 300,000 new homes annually to match demand and keep costs of housing affordable, less than 250,000 were built in 2019, the best rate in the last decade.

And that is why some say the simple solution to Britain’s housing problem is building more apartments/flats.

The British population has been growing by more than half a million every year for the last twenty years. Yet just over 175,000 homes have been built annually.

One solution is building more apartments – and on the face of it, the facts stack up as they are cheaper to heat, the views are often unique and they use less land.

To look at what we do as a country with our apartments, it's important to look at Europe to see how they live so that we can compare the percentages of flats/apartments lived in -

·         Spain 66.1%

·         Switzerland 63.1%

·         Greece 59.2%

·         Germany 56.3%

·         Italy 53.1%

·         EU average 46.2%

·         Sweden 46.7%

·         France 34.0%

·         The United Kingdom 14.8%

Quite a stark difference, isn't it!

Now let’s look at Southampton itself.

Of the 108,545 households in Southampton, 38.3% of them (41,577) are apartments / flats.

Even though only 1.2% of the country has residential property built on it (and an additional 3.5% are gardens), building houses is low-density land use. Is it sustainable in the long term to continue to build that way in Britain, a country with a similar population to France yet having less than half its landmass?

If we continue to build just over 5 in 6 new households as houses, surely sooner or later, the precious green belt around our towns and cities will have to go. And I know many of you will say use brownfield sites. Of course, there are brownfield sites, and …

in the whole of the Southampton area, there are 37 brownfield sites, totalling only 177.1 acres, which would provide 3,779 houses.

The country needs a decent supply of homes for its growing and ageing population. Many of you will frown when it has been suggested, even if it's for environmental reasons alone, most of these should be apartments/flats.

Don’t get me wrong, the love/hate relationship with the apartment/flat and the British is well-founded. Many apartments/flats in Britain are not suitable for happy family living. The high-rise ghetto council blocks built in the 1960s didn’t help with their poor communal areas, lack of maintenance and lifts that didn’t work.

Why do so many more Europeans live in apartments?

In mainland Europe, the apartments are larger. For example, in Germany, they are 974 sq ft; in Denmark, they are 1,452 sq. ft; in the UK, they are only 793 sq ft. Also, European apartment/flat owners have more storage areas, higher ceilings and better communal areas.

It is a vicious cycle. Poorly made small apartments make families side-step them, which makes new home builders construct apartments unsuitable for families, which means the situation worsens. This results in the British property market trying to expand our towns and cities outwards into the countryside with houses, rather than upwards into the sky.

I am not suggesting 20-storey high-rise tower blocks for one second. Looking deeper into the information from Europe, most people live in low-rise three and four-storey purpose-built apartment blocks.

To begin with, these new apartments/flats need to be justly desirable for families and be seen as such by the local population. The building materials used, communal spaces, the building’s functionality, and design specifications must not only meet but exceed current building specs on houses, or planning permission should withhold.

Maybe the Government could incentivise builders to build apartments/flats instead of houses to improve the supply of quality apartments/flats with tax breaks?  

Things will take decades to change, yet I thought it was appropriate to discuss the matter in such an environment as this.

These are my thoughts, what are yours?

Southampton’s ‘Generation Stuck’ and Their £9,198m Tied-up Equity

 

The predicament of the Southampton 20 to 30 year olds who rent and their inability to get onto the housing ladder is often discussed in the press.

There are 4.43m properties in the UK that are still in the private rented sector (compared to 2.13m in 2002).

This group of people in their 20s and 30’s, who rent from a private landlord, are often called ‘Generation Rent’.

Yet would it surprise you that since 2017, the number of UK households in the private rented sector has reduced by 260,000 whilst the number of homeowners has increased by 1.1m?

In this article I want to talk about another set of people, not ‘Generation Rent’, but ‘Generation Stuck’.

 

Generation Stuck are our middle-aged and mature homeowners of Southampton. They are the generation that could be described as late ‘Baby Boomers’ (born in late 1950s and early 1960s) and the early ‘Gen X’ (born in the mid 1960s to early 1970s).

These 50 to 64 year old people feel stuck in their Southampton homes, and therefore I have nicknamed them ‘Generation Stuck’. Their inability to move could be holding back those younger Southampton ‘Generation Renters’.

So, let me look at the numbers involved.

 

In Southampton, there are 13,833 households, whose owners are aged between 50 and 64 years old and about to pay their mortgage off on property that is worth £4,708.16m.

There are an additional 13,194 mortgage free Southampton households, owned by 50 to 64 year olds, worth £4,490.67m, meaning ...

 

Southampton ‘Baby Boomers’ and Southampton ‘Gen X ‘are sitting on £9,198.8m worth of Southampton property.

According to the Census, 47.8% of homes occupied by 50 to 64 year olds have two or more spare bedrooms.

This is backed up by the annual English Housing Survey that states nationally, 49% of properties occupied by these ‘Generation Stuck’ are ‘under-occupied’.

Under-occupied is categorised as having at least two spare bedrooms.

Looking at the statistics closer to home

 

36.3% of Southampton 50 to 64 year olds have two or more spare bedrooms, making it the 315^th highest local authority in the country (out of 348 local authorities).

The rising number of older Southampton homeowners who want to downsize their Southampton home are often held back by the lack of suitable housing options for older people and the difficulties of moving.

Lots of over 50 year old Southampton people cannot move home in the way that they would like, due to a lack of suitable housing options and so can find themselves ‘stuck’ in homes which are no longer suitable for them as they age.

 

Only 1 in 29 people over the age of 50 move home each year, compared to 1 in 15 for the rest of the population.

Helping mature Southampton homeowners (Generation Stuck) to downsize their homes at the right time will also allow younger Southampton people (Generation Rent) to find the Southampton family homes they need – meaning every generation wins, both young and old.

However, to ensure downsizing works, we need more choices for these “last-time-buyers”.

 

That means building more bungalows or more ground floor apartments suitable for the middle to older generation.

One way this could be done is by changing the planning rules to force builders to build these types of properties, whilst the other could be the changing of the stamp duty tax breaks for downsizers.

In this way, older Southampton people will be more able to move into homes which suit their specific needs, improve their quality of life whilst meeting their goals in life, all without them becoming detached from their friends and family locally in the Southampton area.

These are my thoughts, please let me know yours.

 

Will The Cost-of-Living Crisis Mark the End of the Booming Southampton Property Market?

 

Southampton property prices have increased by 19.1% over the last two years.

Southampton house prices have risen on the back of several things, including changes in how people see their homes and how they live and work (i.e. working from home), a lack of properties on the market and government tax incentives (the stamp duty holiday in 2020).

Yet, the tide could be beginning to turn as the number of houses coming on the market is increasing as supply is starting to catch up with demand - in Q1 2022, 389,811 properties came onto the market in the UK compared to 425,295 in Q2 2022. One would typically expect Q1 to be larger than Q2 in average years.

Yet some commentators are saying one thing that could stifle this growth is the cost-of-living crisis.

I wanted to delve deeper into what was happening in Southampton instead of reading headlines in the newspapers. Let me start with average incomes.

 

The average Southampton household income is £602.20 per week, compared to £660.10 in the South East region and £613.10 nationally.

 

Roll the clock back twenty years to 2002, and the average Southampton household income was £387.60.

I wanted to go into greater detail a few weeks ago; I stated that mortgage costs for first-time buyers were much lower today (as a percentage of household income) than in 1989 and 2007. Many of you commented on social media or sent me messages asking what happened to other household bills.

In 1989, 16% of people’s household income went on housing (rent or mortgage) compared to 17.5% in 2021.

Food represented 19% of people’s spending in 1989, compared to 14.4% in 2021. 

 

Also, gas and electricity were 6% of household income in 1989 compared to 4.81% in 2021.

(although that was before we saw the recent energy price hikes).

Interestingly, the UK household spent 15% of their monthly income on leisure activities in 2021, compared to 10% in 1989.

Household goods and services (i.e. household appliances, insurance etc.) have risen from 11% in 1989 to 14.9% in 2021.

Before I leave these stats, I had a peek at the 1957 stats (the earliest stats available), and in that year, food represented 33% of the household income and tobacco 6% (today, it's 2.34%).

So, compared to 1989, the big-ticket items of housing, food and fuel combined have gone down from 41% to 36.7% of the household income, whilst leisure has increased from 10% to 15%.

The fuel element of household bills will rise to around 11% to 12% of household income, and I suspect the leisure budget will be hit the hardest to pay for that. We are seeing food inflation of around 10% to 15%, meaning that food will go from its current 14.4% of household income to around 16% to 17%.

It's going to be tough, especially for those people in rented accommodation who may not earn near the average wage yet, as they have similar fixed costs for gas, electricity and food.

Next, let me look at the inflationary effects on housing costs.

A rise in the base rate will, in theory, slow inflation by reducing consumer demand. In the short-term, this increase in the base rate will increase mortgage rates, thus adding fuel to the fire of the cost-of-living crisis by growing mortgage costs.

Those Southampton homeowners on tracker or variable rate mortgages will instantly increase their mortgage payments.

Encouragingly though, just under 17 out of 20 people are on fixed-rate mortgages, the majority on 5-year fixed rate deals, so their housing costs won’t go up significantly in the short-term.

This will alleviate some of the interest rate effects, making it more challenging and expensive for new borrowers like first-time buyers.

However, as I have explained in previous articles on the Southampton property market, many Southampton landlords have been sitting on their hands in the last couple of years as owner-occupiers have outbid each other in buying their next 'forever home'. If there aren’t going to be so many Southampton first-time buyers, then I suspect we might see more Southampton landlords coming out of the woodwork and buying again.

This is especially true as investing in buy-to-let in inflationary times is an excellent hedge to protecting the buying power of your hard-earned savings (drop me a message if you want to read that article).

In conclusion, although the amalgamation of the Southampton house price rises in the last two years, the increasing interest rate rises, and the continuing cost-of-living crisis, there is no doubt the momentum in the Southampton housing market will be slower in the next 12 months compared to the last 24 months. Nevertheless, I anticipate Southampton house price growth will ease (and, in some months, be slightly negative). A better bellwether of the state of the Southampton property market is the number of people moving house (i.e. the transaction levels).

I expect transaction levels to be lower in the latter part of this year and the first half of 2023, yet they are most likely to stay close to the long-term average. The boom is over, yet it shouldn’t be a bust situation.

What are your thoughts on this? Let me know.

Southampton’s Millennials to Inherit £260,701 Each From Their Baby Boomer Parents

The total value of homes owned by Baby Boomers in Southampton alone is £9,198,828,639 - and two-thirds of the Southampton Millennials are set to inherit all that in the next few decades!

Could this be the answer to the housing crisis?

Could Southampton Millennials live it up for the next few decades, safe in the knowledge they will get a huge lump sum to pay off their debts and buy a house with what is left?

Before I look at that, which set of people in Southampton exactly are the Southampton Millennials or Southampton Baby Boomers?

Come to that, who are Generation Z, the Silent Generation or Generation X?

All these are phrases used for the different groups of people in their various life stages of our society.

So, splitting the groups down:

 

Silent Generation: Born 1945 and before (77 years old and above)

Baby Boomers: Born 1946 to 1964 (58 years old to 76 years old)

Generation X: Born 1965 to 1980 (42 years old to 55 years old)

Millennials: Born 1981 to 1995 (27 years old to 41 years old)

Generation Z: Born after 1996 (everyone under 26 years old)

 

Using data from the Census, my research shows there are …

 

27,027 households in Southampton owned by Southampton Baby Boomers and they are worth a combined value of £9,198,828,639.

 

The generation that will inherit those Southampton properties will be the millennials.

 

There are 52,901 millennials in Southampton.

After looking at the local demographics, homeownership statistics and current life expectancy, around two-thirds of those Southampton Millennials have parents who own those 27,027 Southampton properties, meaning each is in line for an inheritance of £260,701.07.

Yet what about Southampton’s Silent Generation?

 

There are 23,311 homes in Southampton owned by the ‘Silent Generation’, and they are worth £7,934,062,027.

Two-thirds of the 51,989 Southampton Generation X will inherit £231,227.88 - still nothing to sniff at yet not quite as much as the millennials!

So, whilst the Southampton Millennials are less likely to own their own home compared to Generation X and so have done not as well in amassing their assets and savings, they are more likely to benefit from an inheritance boom in the years to come.

This is likely to be very comforting information for those Southampton Millennials, including some from humbler upbringings who historically would have been unlikely to receive an inheritance.

Nevertheless, inheritance is not the silver bullet that will get the millennials onto the Southampton housing ladder.

Nor will it deal with the increasing wealth inequalities in British society, as the inheritance they are likely to receive won’t be accessible when they are trying to buy their first Southampton home.

So, before all you Southampton Millennials start running up your credit card bills, safe in the knowledge they will be paid for when your parents pass away in 20/30 years, over half of the females and around a third of men are going to have to pay for their nursing home fees.

Remarkably, I recently read 25% of people who must pay for their nursing home fees run out of money, and therefore have to rely on funding from the local authority

Therefore, if you are a Southampton Millennial, no inheritance will be left for you. It goes without saying, most Southampton parents want to give some inheritance to their children.  

Yet if waiting until you pass away to help your children or even grandchildren with your legacy could be seen as too late, so what are the options?

One solution to help and fix the housing crisis in Southampton (and the UK as a whole) is if parents and grandparents, where they can, help financially with the deposit for a house whilst their children/grandchildren are in, say, their 20's and early 30's.

Buying a Southampton property is much cheaper than renting – I have shown it many times in these articles.

 

It’s not a case of not being able to afford the mortgage; the problem is raising the mortgage deposit (of 5% to 10%) for these Southampton Millennials.

Maybe families should be discussing the distribution of family wealth whilst everyone is alive (in the form of helping the family with house deposits) as opposed to waiting until the end, as it will make a massive difference to everyone in the short and long run.

And a final thought, your legacy will have a more significant impact, and you will be here to see it with your own eyes.

A win-win for everyone.

  

Southampton Property Prices Have Risen by 380% Since 1995

 

“Tell me what is happening to the Southampton property market”, asked the friend of a friend at a recent do I went to in Southampton (after finding out I was an agent in Southampton).

I always reply, “It depends if you are buying, selling or both”.

The Southampton property market is like a seesaw. For the last two years, it has been quite firmly in the realms of a 90% seller's/10% buyer's market.

However, unless you are a Southampton buy-to-let landlord, Southampton first-time buyer, or executors selling a deceased person's estate, most home movers are both (i.e. they are both sellers and buyers).

 

So, what determines where we are on the seesaw of a seller’s market or a buyer’s market?

 

It comes down to simple supply and demand economics. i.e. the number of properties on the market versus the number of buyers in the market.

Like when someone sells goods or services, it's the same with property. So, when we have a low supply of properties on the market and high demand for properties to move into (like we have had for the last two years since the end of lockdown one), house prices go up.

 

Southampton house prices are 10.3% higher than a year ago.

 

The other side of the coin was seen in the Credit Crunch years of 2008/9. Many people wanted to sell their houses in Southampton, yet the banks weren’t lending, so people couldn't buy. This meant the supply of property on the market exceeded demand; hence Southampton house prices dropped by 16% to 19% in 18 months (depending on what type of property you were selling) as we had a 20% seller's/80% buyer's market.

Whilst demand and supply are the key driving force on the balance of the buyer/seller’s market seesaw, it is not the only influencer of the property market. The price band is also an essential determiner of house prices, albeit over the longer term.

To show this, initially, I will go back to 1995 to ascertain what has happened to average house prices over the long term in Southampton.

 

The average Southampton house price has risen from £52,467

in 1995 to £251,882 in 2021, a growth of 380.1%.

 

Interesting, when you compare that against the national figure of 407.2%. Also, looking at where our local authority stands against other areas, we are 205^th out of 331 local authorities in England & Wales for house price growth.

It’s called the property ladder for an excellent reason, and the health of the whole Southampton property market is very dependent on those bottom rungs of that ladder.

 

Therefore, looking at the data for our local authority, paying particular attention to the lower end (in terms of price), some intriguing data comes to light. It is crucial as the lower end of the property market (in terms of price) is a good bellwether for the whole Southampton property market.

 

So, I looked at the following:-

1.   Lower 10^th Percentile of the Southampton housing market – i.e. the bottom 10% in terms of the value of properties sold – e.g. small apartments and ex-local authority properties in the less popular areas, which mainly attract buy-to-let landlords.
2.  Lower Quartile of the Southampton housing market – i.e. the bottom 25% of Southampton property in terms of their value, e.g. first-time buyer homes and mid-market buy-to-let property.

… and if one looks at our figures for Southampton and the whole local authority, you can see the three parts (lowest 10%/lowest 25% and overall average) have performed quite similarly.

• ·       The average value of a Southampton property sold in 1995 in the lower 10^th percentile (i.e. the bottom 10% of the Southampton property market) was £29,000, and in 2021, it was £135,000, a growth of 365.5% (compared to the national average of 428.4%).

• ·         The average value of a Southampton property sold in 1995 in the lower quartile (i.e. the bottom 25% of the Southampton property market) was £37,995, and in 2021, it was £185,000, a growth of 386.9% (compared to the national average of 417.7%).

Some of you might be asking yourself, what do all these different figures mean to Southampton homeowners, first-time buyers and landlords? 

 

As the overall average is above the lower 10^th percentile but roughly the same as the lower quartile growth figures, meaning the middle to upper market in Southampton has performed better than the lower end in terms of house price growth since 1995.

The thought I am trying to get across to every Southampton homeowner and buy-to-let landlord is that there isn’t just ‘one’ Southampton property market.

There are markets within markets - almost like a fly's eye. It is essential not to look at just the headlines but delve deeper when considering what is really happening and not to just look at the overall averages.

As we enter the height of the summer, the Southampton property market seesaw has started to change ever so slightly, changing from the 90% seller's/10% buyer's market we have had in the last two years to more of a 70% seller's/30% buyer's market.

With that in mind, if you can spot trends before anyone else is aware of them you could find yourself some potential Southampton property bargains.

74.1% of Southampton Properties Were Bought With a Mortgage in the Last Ten Years

 

 

Could the high levels of mortgages that Southampton people take out cause another property crash?

Many Southampton homeowners and landlords have been contacting me recently and asking what will happen to the Southampton (and the UK) property market? More specifically, will we have a repeat of the 2008/9 Credit Crunch property crash?

High mortgage payments were one of the critical catalysts to Southampton house prices dropping by between 16% and 19% (depending on the type of property) in just over one year in Southampton.

To answer that question, let me look at the mortgage numbers locally to see where we stand in the Southampton area.

 

24,690 of the 33,338 property sales in the last decade in Southampton were purchased with a mortgage.

 

74.1% of our local authority area house purchases have been made with a mortgage (meaning 25.9% are made with 100% cash).

Interesting, when compared with the national average of 67.4% of house purchases with a mortgage over the last decade.

However, what is thought-provoking is the number of house purchasers buying with a mortgage has steadily been increasing over the last decade.

 

Between 2012 and 2017, the percentage of people buying with a mortgage was 72.5%, yet over the last five years in Southampton, that has risen to 76.9%.

 

 

Initially, this doesn't sound good. Yet, as always with my articles on the Southampton property market, the devil is always in the detail.

The issue is that most people need a mortgage to buy their home.

However, it’s not the amount of mortgage that is the issue, more the level of monthly payments. So, if you fix your mortgage rate, then your payments are fixed (a good idea especially as interest rates are on the rise).

 

In the last quarter, just under nineteen out of twenty (94.35%) of new borrowers that took out a mortgage had a fixed-rate mortgage at an average interest rate of 1.84%.

That’s good news for recent buyers as most of their payments won’t rise even though Bank of England interest rates have risen over the last few months. Yet it’s essential to see what existing homeowners with mortgages have done with their mortgage rates (i.e. fixed or not) as they form the bulk of the property market.

This is because in 2008/9 (the last crash), many people were unable to afford their high monthly mortgage payments when they were made redundant because interest rates were much higher. This meant many Southampton homeowners ‘dumped’ their houses onto the market, all in one go in 2008, because they couldn’t afford their high mortgage payments.

Also, the banks could not lend money for mortgages as easily because of the Credit Crunch, meaning fewer people could get a mortgage, so the demand for Southampton houses dropped as well.

 

In a nutshell, the number of Southampton properties on the market almost doubled overnight in 2008, yet demand plummeted as mortgages were hard to come by. High supply and low demand meant Southampton house prices nosedived in 2008/9.

Going into the Credit Crunch, one in six (60.4%) homeowners with a mortgage had a fixed rate at an average of 5.76%. By 2013, this had dropped to one in three people (33.29%) having a fixed-rate mortgage at an average of 3.34%.

 

Yet today, just under 17 out of 20 homeowners with a mortgage have a fixed rate at an average of 1.97%.

 

Whilst the country might owe collectively £1,630.5 billion in mortgages, irrespective of increasing rates, most homeowners have protected themselves with a low fixed interest rate.

Also, the overall ratio of mortgage debt in the UK, compared to the value of the homes the mortgages are lent on, is also low compared to the year before the last property crash. This ratio is called the Loan to Value ratio (LTV). The higher the LTV, the less equity the homeowner has in the property.

In 2007 (the year before the crash), only 49.4% of people had a mortgage less than 75% of the house's value (i.e. they had an LTV of less than 75%). Today that stands at 60.9%, which means more people have more equity in their property.

Another thought on why the country is in a better position is only 4.22% of mortgages have a 90% or higher LTV (compared to 16.28% just before the crash in 2007).

 

1 in 6 people were vulnerable to negative equity in the last property crash, whilst today that would only be 1 in 25.

 

This means if we do have another property market correction for any other reason ... the number of people in negative equity will be much smaller, so it won't affect the property market as much.

So, in conclusion, as we have fewer people with high LTV mortgages and fixed rates that are a third of what they were in the Credit Crunch, we are, as a country, in a better position to weather any storm.

If you would like any advice or opinion on the Southampton property market, be it buying or selling or anything to do with investing in the Southampton buy-to-let property market, don't hesitate to drop me a line. 

32% of Southampton Property Sellers Reduce Their Asking Prices as the Property Market Equilibrium Starts to Return

 

•  717 of the 2,238 properties on the market in the Southampton area have had a price reduction in the last 3 months.
• The average reduction has been 6.7% of the original asking price.
• This is great news for Southampton home buyers and Southampton buy-to-let landlords, strangely Southampton house sellers as well.

For the last couple of years, the Southampton property market has seen some amazing prices being achieved with multiple offers and many properties selling for way over the asking price.

Yet, as I have been writing about the Southampton property market over the last few weeks, the tide is beginning to turn, and the pendulum swings more towards a balanced Southampton property market as more homeowners in the Southampton area (SO14-SO19 & SO30/31/32/40/45/52) have been reducing their asking prices.

Of the 2,238 properties for sale in the Southampton area,

717 have been reduced in price in the last 3 months.

 

This can be broken down as follows…

Price Range of the Southampton Property	Number of Price Reductions in Last 3 Months
£0-£50k	6
£50k-£100k	32
£100k-£150k	68
£150k-£200k	76
£200k-£250k	57
£250k-£300k	89
£300k-£350k	82
£350k-£400k	69
£400k-£500k	100
£500k-£600k	58
£600k-£750k	39
£750k-£1m	26
£1m-£2m	13
£2m-£3m	2

 

So why is this important and why is this good news, even for Southampton house sellers?

 

Property industry statistics show that 5 out of 6 house sellers will buy another property and over 80% of those sellers will move up the property ladder.

When you move up the property ladder, that normally means you pay more for the one you want to move to (that’s why it’s called the property ladder).

So, whilst you won’t be getting as much for yours as you might have done earlier in the year, you won’t have to pay as much for the one you want to buy (and the price difference between the two properties will be smaller – meaning you will end up saving money because of these reductions).

So what is the level of price reduction being seen in the Southampton property market?

 

The average percentage of the price reduction in the

Southampton area has been 6.7%.

 

I must stress house prices/values in Southampton haven’t dropped 6.7%, just the asking prices of some of the properties on the market.

This is good news for Southampton first-time buyers and landlords, as they will be more likely to buy a property at a more reasonable price whilst. As I explained above, this is also good news for sellers as most of them will end up paying less for the higher priced property they end up buying after selling theirs.

So, what should Southampton homeowners be aware of if they are selling their home now or in the future?

For me it is important that I inform all Southampton property owners of the real story. This enables them to judge for themselves where they stand in the current Southampton property market, thus enabling them to make better informed decisions.

You see some Southampton estate agents will deliberately over inflate the suggested initial asking price to the house seller, because it gives them a bigger chance to secure the property on that agent’s book, as opposed to a competitor.

 

This practice is called overvaluing.

Now of course, each Southampton homeowner wants to get the most for their home, yet some estate agents know this and prey on those Southampton house sellers.

You might ask, what is the problem with that?

Well, you only get one opportunity at hitting the Southampton property market as a new property. Everybody has access to the internet, social media and the four main property portals (Rightmove, Boomin, On The Market, Zoopla), and your potential buyers will know the property market like the back of their hand.

If you have a 2-bed Southampton semi that is on the market for a 3-bed Southampton semi-detached house price ... those Southampton buyers will ignore you.

 

Your Southampton property will stick on the market as your potential buyers keep seeing your property on the portals each week.

These buyers will then start to believe there is something wrong with your property and dismiss it even further. That is until you, as the house seller, reduce your asking price. The issue is that sometimes these buyers will think something is wrong with your home and could bid you down even further, meaning you will get less even though you asked for more! (This was backed up by some research done by Which?).

Now according to research by Denton House, the average British house buyer only views around six properties before buying – so please don’t assume viewers will come round your optimistically priced (i.e., overvalued) Southampton home, thinking they will knock you down - quite the opposite - they just won’t view your home in the first place.

And you know that because I bet you have done the same yourself when searching for property.

 

So, all I suggest is this ... be realistic with your asking price to start with.

Do that and you will sell your Southampton property at a decent price to a decent buyer ... first time, every time - enabling you to move onto the next chapter of your life.

If you know of anyone currently selling their home in the Southampton area and finding things difficult, please share this article with them as it could be of interest.