Portsmouth Cheapest Place To Live In The South
Contrary to popular opinion, Portsmouth is the cheapest place to live in the south – whether it be other south coast towns, or further afield in places like Bristol, Birmingham, Stratford or Nottingham – Portsmouth is cheaper. This is why so many students flock to the city (coupled with the 10-month contracts whereas other Uni's insist upon 11 or 12 month contracts). This is also why so many people who work outside the city, decide to live in the city.
The Accepted Wisdom
Councillor Darren Sanders did a great job at our last meeting of explaining some of the challenges facing the city and the council when it comes to housing – the need to balance landlords, tenants and the wider community's wishes, the need to balance University needs with those of local people who have no University affiliation. You can see his presentation here.
His mistake, which seems to be common across the city, is the belief that Portsmouth is caught up in the housing crisis affecting the whole of the south and Portsmouth's situation is the same as other cities in the region. It is true that nationally, rents are rising at their fastest rate since the ONS (Office for National Statistics) started measuring them and that locally, average rents are up 53% over 3 years (2/20-10/22) – but that latter figure hides 23% inflation over that time – so rents here have been rising at 7.7% per year net of inflation, and while not good - it is not as scary as a headline 53%.
However, much of Portsmouth's problem can be explained by the fact it is cheaper than elsewhere, so the shortage of accommodation for people who live and work here is because they are competing for housing with those coming into the city to take advantage of the cheaper housing.
HMOs Are Worst Affected
Given that HMOs are the preferred place to live for students, for young professionals and for many older people who find themselves single or without the funds to buy a place of their own – it is HMOs that are seeing most pressure.
We have a member with an HMO in Fratton - it is occupied by students, no surprise there. But they are students of Chichester Uni and jump on the train to Uni every morning because 'Portsmouth is affordable, there is nothing in our price range in the Chichester area'.
We have already predicted that as small HMOs leave the market to avoid the overhead of Licensing and professional developers buy up those properties to create the much more expensive to live in, 'super HMOs', that rents in this area will jump for the median tenant by as much as 50%.
However, new research from 'Spareroom' shows Portsmouth shared room rents have risen just 9% in the past year compared with an average 21% for the region. (See the source data here). If this is accurate, it implies that the gap between Portsmouth and the rest of the South is widening, meaning that Portsmouth will look even cheaper compared to alternatives going forward. If that is true, it obviously will not last – if more people can afford to live here / are unable to live elsewhere in the region, then that demand will bring prices more into line with the surrounding area.
Given the likelihood that Portsmouth rents will revert to the mean for the area (rents will be pushed up by the greater demand all the time it is cheaper than elsewhere) and that the introduction of Licensing will drive around 50% of the small HMO rooms out of the market, our prediction is that Portsmouth will see considerably higher rent inflation over the next 2-3 years. Something we will track and report on regularly during that period.