The elegant architecture and old city streets surrounding the nine-century-old cathedral draw buyers from the home counties, London and beyond. Just under an hours train ride from the capital, Winchester became the ninth most expensive local authority in the South East to live in this year. As flexible working has enabled both buyers and renters to move that little bit further, Winchester has been a beacon.
Sales
The splendour Winchester exudescommands a big premium. Aproperty in the city now costs£288k or 65% more thanelsewhere in the South East. Anddespite being on the westernborder, Winchester now sitswithin the top 10 most expensiveareas to live in the region.
Like many sought-aftercommutable areas, Winchesterhas also benefitted from the racefor space. Since Covid began,houses have seen stronger pricegrowth than flats. Detachedhomes comfortably sit aboveseven figures at an average of £1,112,800, up 11% since 2019
While nationally the housingmarket is beginning to pause forbreath after a buoyant 2021, thelocal market remains robust. Thisyear, the lack of stock hasprompted buyers in Winchester tooffer competitively, with 36% ofhomes selling above their askingprice. The average home sold for 99.5% of its asking price, up from 96.2% in 2019.
The time it takes to sell a home iscurrently 74 days on average,while up from last year, it isconsiderably quicker than pre-Covid. However, the time takenfor sales to complete remains highby historic standards, averaging 87 days so far in 2022.
Winchester continues to catch theeye of households from surroundingareas, with buyers moving up fromthe coast and the capital. But oncepeople reach Winchester, they tend to put down roots.
Over the past 12 months, almost athird of all buyers in Winchesteralready lived within the city. Themost common are downsizers,staying within easy access to the array of amenities.
There are, however, risks on thehorizon for the housing market.Interest rate rises in the face ofdouble-digit inflation may start toput limits on how much buyers can afford to pay.
However, Winchester has stood thetest of time and its popularity withcash-rich downsizers as well asLondon movers means it is likely tohold strong in the face of any oncoming flux.
Lettings
Rents in the South East were quickest to bounce back from the Covid shockand saw record-breaking growth throughout most of 2021. However, whilerental growth in the wider region begins to slow as the stock-glut starts tobottom out, Winchester remains strong. And with 24% fewer homes availableto rent in the city this year than last, competition is fierce.
Through the lens of the pandemic,it’s clear to see what tenants of2022 desire – homes with an extraroom for an office and perhaps evenoutdoor space are top of the prioritylist. And tenants in Winchester areno different.
In Winchester, larger propertieshave seen the strongest rentalgrowth over the last year, whilesmaller homes have lagged behind.
Rental growth is currently up 5% inthe city and is likely to stay aroundthis level over the coming years. Infact, we think rents will outpacehouse price growth over the next four years, boosting yields. This ispredominantly because landlordswill look to pass on higher mortgageand other servicing costs ontotenants.
But despite higher property prices,gross yields in Winchester exceedthe average in the South East by0.8%.
As interest rates climb, makingbuying more unaffordable for some,we expect to see increased demandin the rental sector. While the costof-living squeeze will weigh on howmuch tenants can afford to pay, ashortage of stock will keep a floor under growth.
