What does 2016 have in store for the Huddersfield Property Market?

Huddersfield house prices up or Huddersfield house prices down? ... and if so, by how much? Those of you who read the Huddersfield Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 43,744 Huddersfield homeowners and landlords.

The average Huddersfield property is 2.6% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the 

Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Huddersfield landlords in my blog, but I believe the real issue in the Huddersfield property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General 

Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Huddersfield in 2016?

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in October 2011, 1,243 properties were for sale in Huddersfield .. today that figure is 788. On the face of it, this means there is less choice for Huddersfield buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Huddersfield house sellers.

Everything isn’t all doom and gloom though ... again back in October 2011, the average property in Huddersfield took 139 days to find a buyer .. latest figures state this has dropped to 128 days .. a drop of 8% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Huddersfield is the 2 bed, which takes 109 days to find a buyer (on average) compared to the 1 bed, which takes 140 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Huddersfield in 2016?  I am going to suggest they will rise between 2% and 3% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Huddersfield property market .. visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Huddersfield House Price Monopoly: How do Prices vary?

Well as the nights draw in, if there is nothing on the telly, the significant other and myself like to play the board game Monopoly. The buying and renting of property, it’s like a busman’s holiday for me! 

Interestingly, the game was originally invented at the turn of the 20^th Century (in 1903) and the game was initially called ‘The Landlord’s Game’!  Anyway, after a few years in the wilderness, the current owners of the game renamed it in 1935 and so began Monopoly as we know it today.

So whether you are a homeowner or landlord in Huddersfield, what would a Monopoly board look like today in the town? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Huddersfield today.

Initially, I have focused on the HD1 postcode only, looking at the Brown Squares on the board, the ‘new’ Old Kent Road in Huddersfield today would be Town Crescent, with an average value £53,000 (per property) and Whitechapel Road would be Crosland Road, which would be worth £59,800. 

What about the posh dark blue squares of Park Lane and Mayfair? Again, looking at HD1, Park Lane would be Gledholt Road at £256,000 and Mayfair would be Edgerton Green at £310,900. However, look a little further afield from the HD1 postcode, and such roads as Norwood Park would claim the Mayfair card at £539,200! Also, I can’t forget the train stations (my favourite squares), and over the last 12 months, the average price that property within a quarter mile of the station sold for was £102,300.

So that got me thinking what you would have had to have paid for a property in Huddersfield back in 1935, when the game originally came out?

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•        The average Huddersfield detached house today is worth £283,680 would have set you back 513 Pounds 5 shillings and 3 old pence.

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•        The average Huddersfield semi detached house today is worth £153,570 would have set you back 277 Pounds 17 shillings and 1 old pence.

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•        The average Huddersfield terraced / town house today is worth £112,650 would have set you back 203 Pounds 16 shillings and 4 old pence.

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•        The average Huddersfield apartment today is worth £124,700 would have set you back 225 Pounds 12 shillings and 4 old pence.

If that sounds like another currency, you must be in your 20’s or 30’s, because it was back in February 1971, that Britain went decimal and hundreds of years of everyday currency was turned into history overnight. On 14th of February of that year, there were 12 pennies to the shilling and 20 shillings to the pound. The following day all that was history and the pound was made up of 100 new pence.

Anyway, I hope you enjoyed this bit of fun, but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis and if you are going to invest in the Huddersfield property market, you should consider the Huddersfield property you buy a medium to long term investment, because Buy to let is pretty much what it sounds like – you buy a property in order to rent it out to tenants.

As I reminded a soon to be first time landlord from Birkby the other week, Buy to let in Huddersfield (as in other parts of the Country) is very different from owning your own home. When you become a Huddersfield landlord, you are in essence running a small business – one with important legal responsibilities.

  On that note, I want to remind landlords of the recent and future changes in legislation when it comes to buy to let. This year, rules have changed about tenant deposits, carbon monoxide detectors and early in the New Year, landlords will have responsibilities to do immigration checks on all their tenants. Failure to adhere to them will mean a minimum of heavy fines in the thousands or in some cases, prison ... it’s a mine field!  That’s why I write the Huddersfield Property Blog, where it has an extensive library of articles like this one, where I talk about what is happening in the Huddersfield property market, what to buy (and sometimes not) in Huddersfield and everything else that is important to know as a Huddersfield landlord. Please visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

The Huddersfield Property Market and £1,300,000,000,000,000,000 in loose change

The 5^th of March 2009 was the date Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8^th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Now as we deck the halls with bows of holly nobody expected that, over six years later, rates would still be at that low level.

In the summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Huddersfield, so I can not profess to know what will happen to interest rates. However, what I do know, speaking to my Huddersfield friends and Huddersfield landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Huddersfield landlords have been investing some of that cash into Huddersfield bricks and mortar, as they search for a low risk investment opportunity.

Buying a Huddersfield buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, Huddersfield house prices have been extraordinarily robust, increasing by over 1413.7% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

.. and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

..  but before you go out and buy any old Huddersfield property, plenty of landlords still get it wrong. 

You have to be aware of your legal responsibilities when it comes to tenant safety, tenants deposits, energy certificates and in the new year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that’s why many agents use a letting agent to manage their property for them.

Next, you have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Huddersfield and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner in a terraced house on Honoria Street, just off Huddersfield’s main A641 .. a decent two bed end terrace, 44 sq metres inside (473 sq ft in old money) sold in November 2005 for £57,500. In the summer, it only obtained £50,000, a drop of 13.04% or 1.41% a year - a very disappointing result.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Huddersfield Property Blog where I have similar articles to this about the Huddersfield property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Huddersfield .. you are missing out! http://huddersfieldproperty.blogspot.co.uk/

Huddersfield vs Bradford – Clash of the Property Market Titans

Many landlords have been asking me my thoughts on the Huddersfield property market recently, and in particular, what is happening to property values. My calculations show property values in Huddersfield quite interestingly grew in the month of September by 0.1%. When one looks at the annual growth, Huddersfield values are 1.7% higher (when comparing Sept 14 to Sept 15).  However, there are signs that the fundamental growth of property values in Huddersfield has now peaked, despite those average property values being below levels recorded in 2007 (just before the 2008 crash).

Even though prices are higher this month, this impressive rise of Huddersfield property values masks the underlying truth in what is really happening to local property values in the town. Throughout 2015, property values have been yo-yo like on a month by month basis, being quite volatile in nature.  For example,

·         September 2015                  0.1% rise

·         August 2015                        0.1% drop

·         July 2015                             0.4% rise

·         June 2015                            1.0% drop

·         May 2015                             0.4% rise

·         April 2015                            0.2% rise

·         March 2015                          0.5% drop

This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by over 15% in August, according to the Council of Mortgage Lenders (CML).

The outlook for the Huddersfield property market remains positive against the foundations of low mortgage rates and growing consumer confidence. However, I do have to question the recent CML mortgage data and whether that raises issues over whether the rate of growth since the Tory’s were re-elected in the early summer can continue? However, on a positive note, Huddersfield property values are still running ahead of salaries and average property values are 17.3% below the levels recorded in 2007.

Talking to fellow property professionals in the town, demand for property has been showing signs of moderating in the final few months of 2015, which in turn will lead to a slight slowdown in the pace of house price growth in the run up to the festive season. You see, it is really important not to read too much into one month’s (September’s) headline figures.

Readers might be interested to note that before the 2008 property crash, all the UK region’s housing markets tended to move up and down in tandem like the Huddersfield Synchronised Swimming team at the Kirklees Active Leisure Centre Swimming Pool!  Since then though, the Greater London property market took off like a rocket in 2009/10, whilst the rest of the UK only really started to grow in 2012/13, and even then that growth was a lot more modest than the Capital’s.  Looking closer to home, it can even be different in neighbouring towns, areas and cities, so whilst Huddersfield property values are 1.7% higher than a year ago (as mentioned above), Bradford property values are 1.2% lower than a year ago.

I cannot stress enough the importance of doing your homework.  One source of information and advice is the Huddersfield Property Blog where I have similar articles to this about the Huddersfield property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with.  If you haven’t visited and you are interested in the local property market in Huddersfield….. you are missing out!  http://huddersfieldproperty.blogspot.co.uk/

Huddersfield Tenants Pay 29.5% of their Salary in rent

I had the most interesting chat with a local Huddersfield landlord the other day about my thoughts on the Huddersfield property market. The subject of the affordability of renting in Huddersfield came up in conversation and how that would affect tenant demand. Everyone wants a roof over their head, and since the Second World War, owning one’s home has been an aspiration of many Brits.  However, with rents at record highs, many are struggling to save enough for a house deposit.

Let’s be honest, it’s easy to get stuck in a cycle of paying the rent and bills and not saving, but even saving just a small amount each month will sooner or later add up.  George Osborne announced such schemes as the upcoming Help to Buy ISA, where the Government will top up a first time buyers deposit.

Therefore, I thought I would do some research into the Huddersfield property market and share with you my findings.  Huddersfield tenants spend on average just under a third of their salary to have a roof over their head.  According to my latest monthly research, the average cost of renting a home in Huddersfield is £603 per month.  When the average annual salary of a Huddersfield worker stands at £24,465 per year, that means the average Huddersfield tenant is paying 29.5% of their salary in rent.  

I doubt there is much left to save for a deposit towards a house after that, and that my Huddersfield Property Blog reading friends is such a shame for the youngsters of Huddersfield.

You see one the reasons for rents being so high is property prices being high.  As I have mentioned before, there is a severe lack of new properties being built in Huddersfield.  It’s the classic demand vs supply scenario, where demand has increased, but the number of houses being built hasn’t increased at the same level.  Also, Huddersfield people aren’t moving home as often as they did in the 80’s and 90’s, meaning there are fewer properties on the market to buy.  If you recall, a few weeks ago I said back in Winter 2007, there were over 1,520 properties for sale in Huddersfield and since then this has steadily declined year on year, so now there are only 887 for sale in the town.

Back in Winter 2007, there were over 1,520 properties for sale in Huddersfield and since then this has steadily declined year on year, so now there are only 887 for sale in the town. 

So, the planners in Huddersfield haven’t allowed enough properties to be built in the town and existing Huddersfield homeowners are not moving home as much as they used to, thus creating a double hit on the number of properties to buy.  This is a long term thing and the continuing diminishing supply of housing has been happening for a number of decades and there simply aren’t enough properties in Huddersfield to match demand, these are the reasons houses prices in Huddersfield have remained quite buoyant, even though economically, over the last 5 years, it was one of the worst on record for the country and the Yorkshire region as a whole.

However, things might not be all doom and gloom as originally thought, as a recent Halifax Survey (their Generation Rent 2015 Survey) suggested more and more people may be long term, if not lifelong tenants. In fact, there is evidence in the report to suggest that the perception of how difficult it is to get on the housing ladder is vastly different between parents and people aged 20 to 45.  It seems from this survey that the state of the UK economy has shifted priorities quite significantly in quite a short space of time.  With fewer people able to save up the deposit required by mortgage lenders, more and more people are continuing to rent.  This delay in moving up the property ladder has driven rents across the UK up as more people were seeking rental properties.

 It is often said that more people in central Europe rent for longer or never own their own property. 

The last two census in 2001 and 2011 show that proportionally the percentage of people who own their own home in Britain is slowly reducing and, as a country, we are becoming more and more like Germany.   That isn’t a bad thing as Germany is considered to have a more successful economy, one of the main stays, often quoted, is because they have a much more flexible and mobile workforce, (which renting certainly gives) and from that, they have a higher personal income than in the UK.      

Therefore, if we are turning into a more European model and the youngsters of Huddersfield and the Country have changed their attitudes, demand for rental properties will only and can only go from strength to strength, good news for Huddersfield tenants as wages will start to rise and good news for Huddersfield landlords, especially as property values in Huddersfield are now 2.2% higher than year ago!

How EU Migration has changed the Huddersfield Property Market

The argument of migration and what it does, or doesn’t do, for the country’s economic wellbeing is something that has been hotly contested over the last few years. In my article today, I want to talk about what it has done for the Huddersfield Property market.

Before we look at Huddersfield though, let us look at some interesting figures for the country as a whole. Between 2001 and 2011, 971,144 EU citizens came to the UK to live and of those, 171,164 of them (17.68%) have bought their own home. It might surprise people that only 5.07% of EU migrants managed to secure a council house. However, 676,091 (69.62%) of them went into the private rental sector.  This increase in population from the EU has, no doubt, added great stress to the UK housing market.

Looking at the figures, the housing market as a whole is undoubtedly affected by migration but it has been the private rented housing sector, especially in those areas where migrants come together, that is affected the most.  Indeed, I have seen that many EU migrants often compete for such housing not with UK tenants but with other EU migrants. In 2001, 3.68 million rented a property from a landlord in the UK.  Ten years later in 2011, whilst EU migration added an additional 676,091 people renting a property from a landlord, there were actually an additional 4.14 million people who became tenants and were not EU migrants, but predominately British!

As a landlord, it is really important to gauge the potential demand for your rental property, especially if you are a landlord who buys property in areas popular with the Eastern European EU migrants.  To gauge the level of EU migration (and thus demand), one of the best ways to calculate the growth of migrants is to calculate the number of people who ask for a National Insurance number (which EU members are able to obtain).

Interestingly, in Kirklees, migration has fallen over the last few years. For example, in 2007 there were 2,901 migrant National Insurance Cards (NIC) issued and the year after, in 2008, 2,464 NIC cards were issued. However, in 2014, this had slipped to 2,288 NIC’s. However, if the pattern of other migrations since WW2 continues, over time there will be an increasing demand for owner occupied property, which may affect the market in certain areas of high migrant concentration. On the other hand, over time some households move into the larger housing market, reducing concentrations and pressures.

In essence, migration has affected the Huddersfield property market; it couldn’t fail to because of the additional 22,233 working age migrants that have moved into the Huddersfield area since 2005. 

However, it has not been the main influence on the market. Property values in Huddersfield today are 6.89% lower than they were in 2005. According to the Office of National Statistics, rents for tenants in Yorkshire have only grown on average by 0.95% a year since 2005 .... I would say if it wasn’t for the migrants, we would be in a far worse position when it came to the Huddersfield property market. 

This was backed up by the then Home Secretary Theresa May back in 2012 - more than a third of all new housing demand in Britain is caused by inward migration and there is evidence that without the demand caused by such immigration, house prices would be 10% lower over a 20 year period.

If you want to know more about the Huddersfield property market, then for more articles like this, please visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Huddersfield Property Market Crisis as New House Building slumps by 61.19%

One of the key factors that determine the price of anything is the demand and supply of the item that is being bought and sold. When it comes to property, demand can change overnight, but it takes years and years to build new properties, thus increasing the supply.

The Conservatives have pledged to build over 1 million homes by 2020. I am of the opinion that as a country, irrespective of which party, we have not built enough homes for decades, and if the gap between the number of households forming and the number of new homes being built continues to grow, we are in danger of not being able to house our children or grand children. I believe the country is past the time for another grand statement of ambition by another Housing Minister. Surely it’s right to give normal Huddersfield families back the hope of a secure home, be that rented or owned? As a town, we need to exert pressure on our local MP Barry Sheerman, so they can make sure Westminster is held accountable, to ensure there is a comprehensive plan, with enough investment, that can actually get these homes built.

To give you an idea of the sorts of numbers we are talking about, in the Kirklees Council area in 2007, 2,660 properties were built. In 2008 that number peaked at 2,680. By 2014, that figure had dropped by a massive 61.19% to 1,040 properties built.

The outcome of too few homes being built in Huddersfield means the working people of the town are being priced out of buying their first home and renters are not getting the quality they deserve for their money. The local authority isn’t building the estates they were after the war and housing associations are having their budgets tightened year on year, meaning they have less money to spend on building new properties. I know of many Huddersfield youngsters, who are living with their parents for longer because they cannot afford to get onto the housing ladder and growing families are unable to buy the bigger homes they need.

I talk to many Huddersfield business people and they tell me they need a flexible and mobile workforce, but the high cost of moving home and lack of decent and affordable housing are barriers to attracting and retaining employees. Furthermore, building new homes is a powerful source of growth, creating jobs across the county and supporting hundreds of Huddersfield businesses. It is true that landlords have taken up the mantle and over the last 15 years have bought a large number of properties. The Government need to be thankful to all those Huddersfield landlords, who own the 12,973 rental properties in the town. Most local landlords only have a handful of rented properties (to aid their retirement), and without them, I honestly don’t know who would house all the extra people in Huddersfield!

Moving forward, those Huddersfield landlords have many pitfalls, both in the short term and medium term. For instance, were you aware that the rules of changes for new tenancies from the 1^st October 2015 (with some imposing penalties including loosing the right to require the tenant to vacate, if they are done incorrectly) or in the medium term, the planned change in the way buy to let’s are taxed?

More than ever, the days of buying any old property in Huddersfield and you would be set for life are gone. Now, it’s all about ensuring you stay the right side of the law, buying the right property (and that might mean even selling some to buy others), so you build the right portfolio for you as a landlord. One source of info on all of these issues, where you will find other articles similar to this on the Huddersfield property market, is the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/ 

Huddersfield House owners desert the housing market with an 8 year low

Even though the housing market is in an upbeat state in many parts of the UK, getting on the property ladder is still challenging for many and regarded as unattainable by some.  However, that goal has become even worse recently in Huddersfield as the number of houses available to buy is at an 8 year all time low.

Back in Winter 2007, there were over 1,520 properties for sale in Huddersfield and since then this has steadily declined year on year, so now there are only 887 for sale in the town.  This continuing diminishing supply of housing has been happening over those years for a while and there simply aren’t enough properties in Huddersfield to match demand.

According to a recent report by the National Association of Estate Agents, that said, “There are now 11 house hunters fighting after every available house which isn’t sustainable.”   What that means is Huddersfield youngsters, who are looking to buy their first home, are finding themselves being squeezed out by the competition.  However, in the meantime, nobody wants to live with parents until they are in their 30’s, so that in turn creates demand for more rental properties, which means landlords have a greater demand for more rental properties so are buying more, resulting in even less smaller properties for the youngsters to buy, it’s a vicious circle.   

Talking to fellow agents, mortgage arrangers, surveyors and solicitors in the town, all of whom have extensive dealings in the Huddersfield property market like myself, most of us agree the movement in the Huddersfield market is taking place in the middle to upper market, higher up the property ladder and it’s second and third steppers pushing through the properties that are being bought and sold.

That has meant as people tend to move less in the middle to upper market, the number of the properties actually selling has drastically reduced over the last couple of years.

When we look at the individual areas of the town, it paints an interesting picture.

• HD1 - Huddersfield Town Centre, Hillhouse, Lockwood, Marsh, Paddock 12 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Autumn months of 2014, the number of properties selling in this postcode was always between 21 and 25 per month. (Interestingly the average value of those properties was £76,620).
• HD2 - Birkby, Brackenhall, Bradley, Deighton, Fartown, Fixby, Sheepridge  29 properties sold in May 2015 (with an average value of £157,601), whilst over the Summer months of 2014, the number of properties selling in this postcode reached into the mid/late 30’s.
• HD3 - Lindley, Milnsbridge, Oakes, Outlane, Quarmby, Paddock, Salendine Nook, Scammonden, Longwood 32 properties sold in May 2015 (with an average value of £158,445), whilst over the Summer months of 2014, the number of properties selling in this postcode reached into the late 50’s.
• HD4 - Berry Brow, Crosland Moor, Farnley Tyas, Netherton, Newsome, Lowerhouses, Stocksmoor, Cowlersley  31 properties sold in May 2015 (with an average value of £ 161,040), whilst over the Winter months of 2014, the number of properties selling in this postcode remained in the late 40’s.
• HD8 - Clayton West, Denby Dale, Emley, Fenay Bridge, Kirkburton, Lepton, Scissett, Shelley, Shepley, Skelmanthorpe 48 properties sold in May 2015 (the most recent set of figures from the HM Land Registry), whilst over the Winter months of 2014, the number of properties selling in this reached into the 60’s. (Interestingly the average value of those properties was £190,340).

So what does this all mean for homeowners and landlords alike in Huddersfield?  Demand for Huddersfield property is good, especially at the lower end of the market.  However, with fewer properties coming up for sale, it means property prices are proving reasonably stable too.

You see I believe a more stable, consistent Huddersfield property market, with less people seeing property as an easy way to make a quick buck (as many did in the early 2000’s when prices were rising at nearly 20% a year so people were buying and selling every other minute), but a property market that has a steady growth of property values in Huddersfield, year on year, without the massive peaks and troughs we saw in the late 1980’s and mid/late 2000’s might just be the thing that the Huddersfield property market needs in the long term.

For more insights, comments and facts on the Huddersfield Property market please visit the Huddersfield Property Blog INSERT URL where you will find many similar articles to this.

Could your Huddersfield property save you from Pension oblivion?

If you were born in the early 1970’s or late 1960’s, if you haven’t started to think about it yet, retirement is closer than you think. In fact the number of years you have left to work is less than the number of years you have worked. The basic state pension is worth £115.95 a week for a single person in 2015/16 (or £6,029 a year) and £231.90 a week for a couple (£12,118 a year) as long as your partner has paid their stamp (although there are certain get of jail cards if they haven’t). 

As a household, could you live on just over £12k a year?

However, could the property you are living in in Huddersfield save you from poverty when you reach retirement? You see, a regular income is vital in retirement, and the bricks and mortar you own in Huddersfield could provide a way for you to finance life when you retire.

If you are in your 30’s, instead of saddling yourself with bigger and bigger mortgages, going from your first time buyer flat, to a terraced, to the semi and then the large detached house, you could instead keep your terraced or small semi, turning it into buy a buy to let property, let the rent pay the mortgage and then rely on capital growth to provide you with a lump sum when you sell the property and retire.  One of the biggest plus points of buy to let is what is known as leverage. Let me explain ... say you have a deposit of 25% and the value of the property rises by 3% a year, your gains in fact multiply to 12%.  However, if property prices drop, 'leverage' can be catastrophic, as losses will also be multiplied. Property values have dropped a number of times in the last 50 years, but they always seem to bounce back ... property must be seen as a long term investment.

Let me explain how leverage could work for you. If you had bought a Huddersfield house in Spring of 1983 for £25,000, using a 75% mortgage and 25% deposit, (meaning your deposit would be £6,250). Today, that Huddersfield property would have risen in value to £155,538, a rise of 522.2%. 

However, when you look at the growth on just your deposit, the rise is even better ... instead of 522.2%, we see a rise of 2389% (remembering that the mortgage would have been paid off).

However, buy to let is not all about capital growth and in retirement, income is more important than capital growth, as rent is the key to a steady income.

So surely the best strategy is to buy those Huddersfield properties with the high rents (when compared to the value of the property). These are called high yield properties in the buy to let world because the monthly return is so much greater. So surely they are the best in Huddersfield? Possibly, but the properties that offer these higher yields (in the order of 6% to 9% per year) tend to be in such areas as Crosland Moor in Huddersfield, historically they haven’t offered such good capital growth when compared to the town average, have a higher tendency for void periods and such properties tend to attract tenants that have a greater propensity to be high maintenance.

Therefore, if a high maintenance rental portfolio wasn’t for you, another strategy could be buy a property with relatively smaller rental returns of 4% to 5% per year (i.e. lower yields), but in a more up market area such as Lindley. Properties such as these tend to suffer from less void periods (i.e. when there is no tenant in the property paying you rent) and they historically have had better long term capital growth when compared to the town average.

Every landlord is different and every property is different. All I suggest to you is do your homework.

As regular readers will know, I am happy to share my knowledge and experience of the Huddersfield property market, high yields, high capital growth, what to buy, what not to buy and where to buy in the Huddersfield Property market can always be found on the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Huddersfield Property Market - Asking Prices remain the same but Values rise

Those of you who regularly read my weekly articles in the Huddersfield Property Blog will know I like to keep abreast of the Huddersfield property market. Something attracted my attention this week about the local property market, something I wanted to share with my many readers.

Over the last month, there appears to have been an anomaly in the local property market, whereby asking prices in the town have remained the same, yet property values have increased.  The average asking price of a Huddersfield property, according to Rightmove, stayed the same this month yet the average value of a Huddersfield property rose by 0.6%.

So how does this relate in monetary terms?  This anomaly means the average asking price of a 

Huddersfield property is £183,200 whilst the average value is now £161,800.

So why the difference? Technically an ‘asking price’ can be any price that a homeowner wants to place his or her property on the market for. Unfortunately, many times this is done without research and can result in overpriced properties that don't sell. As the Summer months are normally slightly quieter those left on the market wanting to sell often temper their asking prices in these months to try and generate interest in their property.

On the other side of the coin, the property ‘value’ is the price that a willing buyer is prepared to pay and a willing seller is prepared to sell at.   Therefore, in a nutshell, Huddersfield property values are continuing to rise and those homeowners in Huddersfield who have properties on the market, last month on average kept their asking prices the same .. great news for property owners and buyers alike!

In previous articles, I have spoken about the continued fundamental shortage of property coming on to the market compared to buyer demand. That is especially true for homeowners wanting to upgrade to a better house/better location.  I can appreciate Huddersfield home owners are reluctant to put their own property on the market speculatively and wait for the right property to become available and some high demand locations can suffer from a property stalemate.

Most homeowners don’t want to sell and have nothing to buy.

But that’s the beauty of the much maligned English and Welsh house buying process. You can find a purchaser for your property, then ask them to wait. By agreeing a sale (subject to contract) before you try to buy sounds concerning to many, but with fewer properties for sale you need to have a buyer for your property or you will be treated as a less serious buyer yourself. If you cannot find the right home for you, you can slow the deal with your purchaser until it comes along. If nothing suitable does comes along and you lose your buyer then the worst outcome is that you have to find another purchaser or take your property off the market and stay put for now, and as long as you mention this at the start they must not commit to any costs until you have agreed your onward purchase.

However, for the landlord/buy to let investors, these potential problems are nothing further from the truth. As I write this article, there are over 130 flats for sale, over 590 terraced houses and over 360 semis for sale in Huddersfield.  Landlord/Buy to let investors can normally pick up some bargains in the Autumn months, as sellers who are selling their homes often have a pressing need to sell by this time.

The types of houses a Huddersfield landlord typically buys, are not the same types as the homeowners wanting to move to a posher area of the town as they are attracted by larger semis and detached properties. The best types of properties for buy to let are the smaller flats, terraced and semis (not the big detached ones). There are in fact too many of these smaller properties for sale .. just look at the numbers of properties for sale (mentioned in the previous paragraph).

If you are a landlord or thinking of become one for the first time, and you want to read more articles like this about the Huddersfield Property Market together with regular postings on what I consider the best buy to let deals in Huddersfield, out of the hundreds of properties on the market,  irrespective of which agent is selling it, then you might like to visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Spring Grove catchment area properties outperform Huddersfield average by 54.31%

I was having a chat with a Huddersfield property investor the other day, when he asked if schools, especially primary schools, affected the local property market in terms of demand from buyers and tenants to a property.  Anecdotally, I have always known this to be true, a good school creates good demand and good demand does affect house prices.  So, I asked my colleagues on the front line, who take the phone calls from people putting themselves on our mailing list and they confirmed that most people cite location as their number one factor.

After looking through our mailing list, it confirms there is a close correlation between the high demand areas of Huddersfield and the close proximity to a good primary school.  Talking to my team in a recent morning meeting, they agreed many people would look to increase their budget quite significantly, whilst others would consider downgrading their property requirements to be close to a good primary school.

Those of you who regularly read this blog will know I like a challenge, so I decided to look at the science behind these assumptions.  According to the SchoolGuide website, Spring Grove Junior, Infant & Nursery School is one of the best primary schools in Huddersfield.  Its figures are certainly impressive. Their last Ofsted Report classified it as Outstanding, 97% of 11-year pupils achieving Level 4 or above in maths, reading and writing whilst 26% of them achieved level 5. There is also a great pupil/teacher ratio of 17:1. Finally, the schools’ KS2 rating was classed as Excellent.

Looking at property sales within a mile of Spring Grove, property values have risen in value since 1999 by 173.17%, whilst according to recent figures, the Huddersfield average as a whole has risen in the same time frame by 112.22%.

That means the parents of Spring Grove have seen the values of their properties rise proportionally 54.31% more than the Huddersfield average ... interesting don’t you think?

However, whilst a good primary school significantly contributes more to house prices, the same can’t be said for secondary schools. There are two reasons for this, firstly, as secondary schools are much larger, so their catchment areas are correspondingly much larger, meaning parents don’t need to live so close to the school. Secondly, in the UK, whilst the difference between the top 25% and bottom 25% of secondary schools is not insignificant, in the primary school sector, the difference between the top 25% and bottom 25%, according to the London School of Economics, is considerably and significantly more.

Many other Huddersfield landlords, both who are with us and many who are with other Huddersfield agents, like to pop in for a coffee or ring/email us to discuss the Huddersfield property market, to consider how Huddersfield compares with its closest rivals and hopefully we can answer all their questions. You must take lots of advice and seek out the best opinion. One good source of opinion, specific to the Huddersfield property market is the Huddersfield Property Blog INSERT URL.  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking op

Huddersfield’s £1.9 billion Mortgage Powder Keg

Eight years ago, in the summer of 2007, hardly anyone had heard of the term ‘credit crunch’, but now the expression has entered our daily language and even the Oxford Dictionary.  It took a few months throughout the autumn of 2007, before the crunch started to hit the Huddersfield Property market, but in November / December 2007, and for the following seventeen months, Huddersfield property values dropped each and every month like the proverbial stone. The Bank of England soon realised in the late summer of 2008 that the British economy was stalling under the continued pressure of the Credit Crunch. Therefore, between October 2008 and March 2009, interest rates dropped six times in six months from 5% to 0.5% to try and stimulate the British economy. 

Thankfully, after a period of stagnation, the Huddersfield property market started to recover slowly in 2012, but really took off strongly in late 2013 / early 2014 as property prices started to rocket. However, the heat was taken out of the market in late 2014/early 2015, with the new mortgage lending rules and some uncertainty, when some people had a dose of pre–election nerves.  

With the Conservatives having been re-elected in May, the Huddersfield property market regained its composure and in fact, there has been some ferocious competition among mortgage lenders, which has driven mortgage rates to record lows. Whilst I have no actual figures to back this up, I know an awful lot of long serving bank managers, mortgage arrangers and people in the finance industry, all of whom have told me on previous occasions when interest rates rose (1987, 1992, 1997 and 2003), it wasn’t the first rate rise that was the catalyst for many homeowners and landlords to remortgage but the second or third increase.  The reason being that it was only by the time of the third rate rise, it started to hit the wallet.  However, the issue is, by the time of the second or third rate rise the best fixed rates, were in all instances, no longer available as they had been pulled by the banks months before.

But here is the good news for Huddersfield homeowners and landlords, over the last few months a mortgage price war has broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.  I read that the well respected UK financial website Moneyfacts said only a couple of weeks ago, the average two year fixed rate mortgage has fallen from 3.6% twelve months ago to just under 2.8%.

Interestingly, according to the Council of Mortgage Lenders, the level of mortgage lending had soared to a seven year high in the UK.  So what about Huddersfield?  In Huddersfield, if you added up everyone’s mortgage, it would total £1.9 billion.  Even more interesting is when we look at Huddersfield and split it down into the individual areas of the town,

• HD1 - Huddersfield Town Centre, Hillhouse, Lockwood, Marsh, Paddock £134.5m
• HD2 - Birkby, Brackenhall, Bradley, Deighton, Fartown, Fixby, Sheepridge  £298.5m
• HD3 - Lindley, Milnsbridge, Oakes, Outlane, Quarmby, Paddock, Salendine Nook, Scammonden, Longwood £363.5m 
• HD4 - Berry Brow, Crosland Moor, Farnley Tyas, Netherton, Newsome, Lowerhouses, Stocksmoor, Cowlersley  £263.9m
• HD5 -  Almondbury, Dalton, Kirkheaton, Moldgreen, Waterloo £271.3m
• HD7 -  Golcar, Linthwaite, Marsden, Scapegoat Hill, Slaithwaite £279.1m
• HD8 - Clayton West, Denby Dale, Emley, Fenay Bridge, Kirkburton, Lepton, Scissett, Shelley, Shepley, Skelmanthorpe £327.7m
  
  

Since 1971, the average interest rate has been 7.93%, making the current 0.5% very low.  So, if interest rates were to rise by only 2%, according to my research, the 12,994 Huddersfield homeowners, who have a variable rate mortgage would, combined, have to pay an approximate additional £21,660,000 a year in mortgage payments.

 That means every Huddersfield homeowner with a variable rate mortgage, will on average have to pay an additional £1,667 a year or £139 a month in interest payments.

I know over the last couple of posts, I have talked about mortgages a lot however, I am not a mortgage arranger but a letting / estate agent and as regular readers know, I always talk about what I consider to be the most important issues when it comes to the Huddersfield Property market and at the moment, in my humble opinion, this is the most important thing!

Buy to let is all about maximising your investment, increasing income and reducing costs.  I give advice, opinions, thoughts, concerns, worries, expectations and fears about the Huddersfield Property market in my blog on the Huddersfield Property Blog.  If you are interested in the Huddersfield Property Market, you might learn something by visiting the blog   http://huddersfieldproperty.blogspot.co.uk/

Interest rates set to rise – How will that affect the Huddersfield property market?

A couple of weeks ago, I mentioned in this blog about how the Bank of England has been indicating recently that UK interest rates will be going up in the not too distant future. Therefore, if you are one of the 22,796 homeowners in Huddersfield, who own your own home with a mortgage, then you need to consider your options and start to budget for an interest rate rise. However, if you are a landlord, who owns one of the 11,944 rental properties in the town, whilst your exposure to interest rate rises is lower, it is most certainly something you should be aware of.

Since the spring of 2009, British interest rates have been at a record low of 0.5%. It’s not a case of if, but when, they will rise. Some people think it will be before Christmas, although I am of the opinion, it will early in the New Year around Easter time, when they do rise. I also expect those rises will be slow, steady and limited. It depends on what is happens to UK wage rises, UK inflation and the general state of the British economy. Nevertheless, as much most of us in Huddersfield would love to pull the shutters and stick two fingers up to the world, we have to recognise we are part of a global economy and global economic worries still exist to prevent an abrupt and instantaneous rate rise.

Those Huddersfield landlords, who do have a mortgage, need to realise that as interest rates rise, their monthly mortgage costs rise. It’s easy to say you will look at your mortgage next month, then before you know it, Christmas will be here!  Don’t forget, mortgage lenders have always removed the juicy low rate mortgage deals a few months before interest rate rise. Speak to a qualified mortgage arranger, there are lots of them in Huddersfield and seriously consider fixing your mortgage rate now.  You didn’t buy your Huddersfield buy to let property for it to become a millstone around your neck. It’s all about mitigating your costs and maximising your income to make your Huddersfield buy to let property the investment you want it to be.

However, on the other side of the coin, two in three landlords who have bought property since 2007, have done so without a mortgage. A rise in interest rates might be a good thing. Let me give you some background first, then I’ll explain why. Huddersfield landlords have see their return on investment for their Huddersfield buy to let property, over the last couple of years, perform very well indeed with Huddersfield property values rising by 9.24% since the Spring of 2013. However, when rates do rise, whilst more expensive mortgage rates will ease the demand for borrowing, on the other hand, it may temper house price growth, making the property market more competitive... and therefore, we should see the return of some bargain property buys in Huddersfield!

 Finally though, can I ask all Huddersfield homeowners and Huddersfield landlords, who have a mortgage that isn’t fixed, they need to recognise that rates will rise throughout 2016 to 2018 and will continue to move steadily upwards towards more viable and feasible long term levels.  I am not qualified to give that advice and this is my personal opinion, so please speak to a qualified mortgage arranger and, if appropriate, fix your mortgage before interest rates rise. Don’t say I didn’t warn you!

In the meantime, if you are a landlord looking for a bargain now, don’t despair ... there are plenty out there, if you know where to look! One place is Rightmove, another Zoopla and another OnTheMarket. However, sometimes, you can’t see the wood for the trees. At the time of writing, Rightmove had 1,818 properties for sale in Huddersfield, Zoopla 924 properties for sale in the town and OnTheMarket 582 properties ... where do you start? A lot of savvy Huddersfield landlords like to visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/, where, irrespective of which agent is selling it, I regularly post what I consider out of the hundreds of properties on the market, to be the best buy to let deal in Huddersfield.   

Crisis in the Huddersfield Property Market ..probably?

I don’t know about you, but if you watch Sky News every waking hour or read the newspapers, it always seems we as a Country, Europe or the World seem to lurch from one crisis to another. Another week, another crisis averted. It was only last summer the soothsayers were predicting the end of the world over the supposed house price bubble that many believed was developing in the South. Property prices were rising at 20%+ per annum in London, only for things to ease as the property market in the Capital showed a controlled slowdown and cooling in activity with price growth easing to a more realistic 8% to 9% per annum. Interestingly, there was no panic when some modest price drops were seen in some of London’s highest priced suburbs.

However, this month’s crisis is the buy to let boom and as George Osborne always likes to be topical, in the July emergency budget, he declared that he will start to scale back, from 2017, the tax relief that those high income tax rate landlords with a mortgage have benefited from. The Daily Mail ran headlines stating it was the end of the private landlord; predicting many landlords will give up on buy to let altogether and we will be inundated with rental properties up for sale as landlords feel squeezed from the market.

Even Mr Carney, the Governor of the Bank of England, recently cautioned that the buy to let property market could destabilise the whole UK property market. He was concerned landlords who bought with high loan to value mortgages could be spooked if there is a property crash, they would panic because of negative equity, sell cheaply, which would worsen house price falls.

End of the world then?   .. this week, yes probably, but next week .. that’s another story!  Before we all go and live like a hermit in the Scottish highlands, let me explain to you my perspective on the whole subject. As I mentioned a few weeks ago, two thirds of buy to let properties bought in the last eight years have been bought mortgage free – so they won’t be affected by the Chancellors’ tax changes.  Also, something I feel is often overlooked but very important, is the fact that landlords historically have only been able to normally borrow up to 75% of the value of the rental property.  In the last property crash of 2008, property values dropped by the not so insignificant figure of 17.37% in Huddersfield, but even then, when we had the credit crunch and the world’s banking sector was on the brink, no landlord would have been in negative equity in Huddersfield.

I believe we have a case of ‘bad news selling newspapers’ and I believe that buy to let, and the property market as a whole, will carry on relatively intact. It’s true reducing tax relief will hit landlords who pay the higher rate of income tax and this may slightly diminish buy to let as an investment vehicle, but I doubt people will sell. Many landlords have been lazy with their investments, buying with their heart, not their head. You would never dream of investing in the stock market without doing your homework and talking to people in the know. If you want to make money in the Huddersfield property market as a buy to let landlord, it’s all about having the right property and as you grow, the right portfolio mix to offer a balanced investment that will give you both yield and capital growth.

The Huddersfield buy to let market still offers good investment opportunities to new and old alike. Those who have bought in the last twelve to eighteen months have reaped the benefit from buying in Huddersfield, because the town offered a combination of reasonable house prices with subsequently increasing rents.  Property values have risen by 4.24% in the last eighteen months in Huddersfield, whilst looking at rents, in Q2 2015, average rental values for new tenancies were 4.8% higher than Q2 2014, which is particularly interesting as they only rose by 0.8% between Q2 2013 and Q2 2014.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Huddersfield Property Blog where I have similar articles to this about the Huddersfield property market and what I consider to be the best buy to let deals around at anyone time in the City, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Huddersfield .. you are missing out! http://huddersfieldproperty.blogspot.co.uk/

Huddersfield tenants feel the squeeze as rents continue to rise

As my regular readers know, my passion is talking about Huddersfield property. As a property agent I like to comment on the Huddersfield property market, which I hope will be of interest to both homeowners and buy to let landlords alike. However, this week, I want to highlight the plight of the tenants of Huddersfield as more and more of their wages are being taken up by ever increasing rents.

The cost of renting a home in Huddersfield has nearly broken through the £600 a month barrier as the average rent for a property in the town, now stands at £575 per month, a rise of 1.2% last month, leaving rents for new lets 4.6% higher than they were 12 months ago.

House price inflation has certainly eased in Huddersfield from the heady days of 2014, but still with retail price inflation (for goods and services) reducing to 0% any increase in property values, no matter how small, means in real terms property is still getting more expensive. Meanwhile, many tenants have given up saving for a mortgage deposit as rents continue to take more and more of their wage packets leaving nothing to save for a deposit. That means, more and more tenants are deciding to rent for the long term and therefore the desire for decent high quality rental properties continues to exceed the available rental stock.

I would go as far as to suggest that rents are an ideal barometer to the state of the local economy as a whole and strongly believe that the recent increase in Huddersfield rents are a sign that the Huddersfield economy is picking up. 

This means Huddersfield landlords are continuing to capitalise on the Huddersfield property market. 

The most recent Land Registry data suggests the annual property price rises in the town have eased over 2015, leaving property values only 2.33% higher than 12 months ago, so as property price growth is easing off, with the increased rents, rental yields are strengthening for the first time in years to compensate. The mortgage market has become more stable after the mad months of May and June after the Tory’s got back into No.10, and so, everything is set to be good news for landlords; even with the Chancellors change of tax rules in the coming years for buy to let mortgages.

You can get some amazingly low mortgage rate deals at the moment, so with mortgage rates so low and returns still extraordinarily attractive, there’s rarely been a better time to invest in rental properties.

However, (you knew there would be a however!), it’s all about buying the right property at the right price. Not all property types are seeing equal rises in rents and capital growth.  Different parts of the town, different types of properties are experiencing quite different changes.  For example, the average length of time the 272 Huddersfield properties up for rent between £250 to £500 per month is 114 days, whilst the average length of time the 140 properties at £500 to £1000 per month is 92 days and 27 properties that fall into the £1000 to £2000 per month price bracket is an eye watering 174 days.

When you start comparing different parts of Huddersfield, the numbers are even stranger!  The bottom line is that you must take advice and opinion. One source of advice and opinion is the 

Huddersfield Property Blog. In the Huddersfield Property Blog, you will see many more articles like this, discussions and even what I consider to be the best buy to let deals around, irrespective of which agent is selling it.

Whether you are a landlord, ‘Homes Under the Hammer’ addict or just a homeowner who is interested in what is happening to the local property market, then please visit the Huddersfield property Blog http://huddersfieldproperty.blogspot.co.uk/

My concerns about the Huddersfield Property market

I am genuinely concerned about the Huddersfield property market, but in a way that might surprise you.  Rightmove announced that average ‘asking prices’ fell slightly last month by 0.8% in the Yorkshire region, leaving them 2.0% higher than a year ago.  Whilst it could be said that monthly change is very modest, in the same period a year ago, we saw a monthly fall of 0.5% in Yorkshire, which is more the norm given the onset of  schools breaking up and everyone going on holiday.

Looking at all the data on the Huddersfield property market; putting aside the need for more houses to be built in the next decade to balance out the increase in population (helped in part by inward European migration) but not matched by a similar increase in housing being built; my research shows there is a widening gap between what property buyers want and what is available to buy. In a nutshell, many more buyers are looking for the smaller one and two bed properties (the typical semi detached and smaller terraced houses/apartments), whilst there is an oversupply of the four and five bed properties, which are the typical large detached properties available.

 Demand for smaller properties comes from both first time buyers and the growing number of buy to let landlords, where it is more cost effective and efficient to buy smaller properties to let out compared to larger properties which tend to offer poorer returns.  Also, landlords with larger loans (on those larger more expensive properties) will also be hit harder with the changes in the way tax is paid on buy to let investments, which start in 2017.

If you recall, a few weeks ago I did some research on how different types of properties had performed in Huddersfield since the year 2000.  I revisited those calculations and it hit me how different types of properties had performed over the last 15 years.  In a nutshell, this mismatch of demand and supply isn’t a new phenomenon, it’s been happening under our noses for years!

In the last 15 years, the average detached house in Huddersfield has risen in value from £101,882 to £244,100 whilst the terraced house has risen in value from £30,770 to £93,238.  Nothing seems amiss until you look at the percentage growth.  The detached has grown in value by 139% whilst the terraced by 203% meaning the gap between the inexpensive terraced house and expensive detached properties has in percentage terms has decreased.

I am concerned because more houses need to be built, not only in Huddersfield, but in Yorkshire and the UK as a whole.  In particular, there is specific need for more affordable starter homes for the growing demand from both tenants (and the landlords that will buy them) and first time buyers.  The Tories need to face up to the fact that unless they can get the builders, the planners (to release more building land), the banks (to finance it) and themselves together, to ensure long term plans can be made, and implemented, this issue will continue to worsen.

The country needs 200,000 houses a year to be built to keep up with demand, let alone reverse the imbalance between demand and supply.  Last year, only 141,040 properties were built, the year before 135,510 and 146,850 in the year before that.  This means only one thing for Huddersfield landlords.  Unless David Cameron starts to rip up huge swathes of the British countryside and build on acres and acres of green belt, demand will always exceed supply when it comes to property for the foreseeable future.

 Therefore, investment in the local Huddersfield property market as a buy to let investment could be the best move to make as the stock market investments are possibly on the wane.  Everyone is different and trust me, there are many pitfalls in buy to let.  You must take lots of advice and seek out the best opinion.  One source of opinion, specific to the Huddersfield property market is the Huddersfield Property Blog  http://huddersfieldproperty.blogspot.co.uk/

Huddersfield Property Values 3% higher than year ago

Huddersfield property values fell by 1.2% last month, meaning they are 3% higher than 12 months ago. Even though values dropped slightly, overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. In fact, talking to a number of other agents in the city, mortgage arrangers and solicitors (all of whom have their direct finger on the pulse of the Huddersfield property market), the steady long term growth in Huddersfield property prices tied in by strong demand conditions so far this summer, alongside an underlying lack of supply and the continued low mortgage rate environment, means the slow but steady upward momentum of the Huddersfield property market is likely to continue in the second half of 2015.

 However, there are a couple points I wish to highlight as all my blog readers will know, I like to give a balanced and honest opinion of what is happening in the Huddersfield property market.  The two main points being low interest rates and a lack of supply of property.

Interest rates first -  Mark Carney (Chief of the Bank of England) said in a  speech a  few weeks ago at Lincoln Cathedral, the Bank will be seriously considering raising interest rates around Christmas time. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth.  Mr Carney said that only six out of ten people had a mortgage (57% to exact) had a variable rate mortgage, compared with more than seven out of ten people  ( 73% to be exact) in the Summer of 2012. Now I am not a mortgage arranger and cannot give advice, but rates are only going on one direction, so whether you are a landlord or homeowner, this might be a time to consider fixing your mortgage rate?  Don’t say I didn’t warn you!

Tie this in with the stricter mortgage lending rules which were introduced in 2014, which affected people’s ability to have larger mortgages, this means homeowners will need to be realistic in their pricing if they want to sell. Reading other recent reports though, property owners have continued to pay off mortgages at a faster rate while mortgage rates have been low. Therefore, when mortgage rates rise, the affect on home movers sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth.

Shortage of Supply – As I have mentioned in previous articles, the number of houses on the market in Huddersfield is at an all time low. One reason is the large number of buy to let landlords who have bought Huddersfield property over the past fifteen years. Unlike first time buyers who tend to move on after a few years, landlords tend to keep their properties long term, meaning there are less properties coming onto the market ... thus restricting supply and sales. In fact over the last four months, only 1,398 properties in the Kirklees Metropolitan Council area have changed hands and sold, compared to 1,584 in the same time frame in 2014, a not so insignificant drop of 11.74%. 

If you are planning on investing in the Huddersfield property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Huddersfield – The 10 year Time Bomb on Home Ownership

Many people think the British obsession with owning your own home started with Thatcher in the early 1980’s, when she allowed council tenants to buy their council houses under the right to buy scheme. However, the growth actually started just after the Second World War. Looking at the country as a whole in 1951 30% of residential property was owner occupied then, every ten years that rose incrementally to 39% by 1961; 51% by 1971; 58% by 1981 and 68.07% by 2001 but after that, it dropped to 63.4% by 2011 and continues to drop today.

Young adults tend to start to think about settling down and moving out of the family home in their early-mid twenties.  After a couple of years, they will have a choice of either buying their first house (albeit with a mortgage) or decide to privately rent for the long term (because the Council House waiting list is measured in decades at the moment!). The ratio of people owning a house with a mortgage verses privately renting is an extremely important guide to what people are doing about their housing needs and what their attitude to renting vs buying is.  With that in mind, within the next ten years, I am predicting there will be more people renting privately in Huddersfield than own a property with a mortgage and that the British love affair of property ownership will fade as the decades roll on.

This is a really important change in the way we live, as I explained to a local Huddersfield landlord the other day, knowing when and where the demand of tenants is going to come from in the coming decade is just as important as knowing the supply side of the buy to let equation, in relation to the number of properties built in the town; Huddersfield property prices and Huddersfield rents.
In the Kirklees Council area as a whole there are 24,523 households that are privately rented via a landlord or letting agency verses 61,404 households that are owned with a mortgage, so my prediction appears to be outrageous. However, when we look deeper (as the devil is always in the detail), 30,378 of those 61,404 households are 35 to 49 year olds and 17,006 are households of 50 to 64 year olds. I would expect all the 50+ years to be paying their mortgage off as they enter retirement as I would with some of the people in their mid/late 40’s.

Meanwhile, at the other end, in the 25 to 34 age range (the age most people bought their first home in the 1970’s/80’s/90’s) only 10,662 of the 18,227 households occupied by those 25 to 34 year olds are owner occupiers with mortgages, because 7,565 households are privately rented. This means only 58.4% of 25 to 34 year olds have bought their house (with a mortgage). Twenty years ago, that would have a much higher percentage of homeowners (between 75% to 85%).

It can be seen that as the older generation pay their mortgages off as they start to get to retirement and the younger generation aren’t jumping on the property ladder like they were 20 or 30 years ago, the private rental sector will take up the slack as more and more people will want a roof over their head, but won’t buy one but rent one. With Local Authorities and Housing Associations not building houses anywhere near like the number of houses they were building in the 1950’s, 60’ and 70’s, the private landlord appears to have good demand for their rental properties for many decades to come.
This will create a polarisation in the housing market between those, mostly older, households who own outright and those, mostly younger, households who rent. Our housing market is very much turning into the European model. However, all is not lost, the younger generation will inherit their parents properties, which in turn will enable them to buy, albeit later in life.

If you are a landlord or thinking of become a landlord, and would like to read more articles like this and other information on the Huddersfield Property Market, then please visit the Huddersfield Property Blog  http://huddersfieldproperty.blogspot.co.uk/

George Osborne – The Huddersfield landlord’s friend?

George Osborne – The Huddersfield landlord’s friend?

Well the last few weeks has been rather hectic as Huddersfield landlords, some who use us to manage their properties and other landlords who just read our Huddersfield Property Blog, have been sending me emails or picking the phone up to me about the new rules on buy to let taxation announced in the recent budget. George Osborne confirmed in the recent summer budget that the tax relief given to landlords on mortgage interest payments, on their buy to let (BTL) properties, would be reduced over the coming years for higher rate income tax payers. The Chancellor said the tax relief that private buy to let landlords (who pay the higher rate of income tax) would change in 2017 from the current 45%/40% and would steadily reduce over the following four years to the existing 20% by 2020.

With 18.8% of residential property in Huddersfield being privately rented (as there are 12,973 privately rented properties in the town), these changes are potentially something that will not only affect most Huddersfield landlords, but also the tenants and the wider property market as a whole. The choice of rental properties could drop, especially at the top end of the market which could push up rents.

However, Huddersfield landlords could protect themselves by reassigning one or more rental properties into a company structure (e.g., a Limited Company, Partnership or Sole Trader) and by doing so, the total tax paid is greatly reduced, because a company only pays tax on the profit. Nonetheless, before everyone goes off setting up companies for their BTL portfolios, it must also be noted, if a sole trader firm is started, stamp duty needs to be paid, yet if the owner is in business with a partner, they could enjoy some stamp duty relief.  The biggest tax variation is Capital Gains Tax (CGT) where the tax bill will be much higher when you come to sell your portfolio. In essence, by going into business with your BTL properties, you will potentially have a modest stamp duty to pay when you start, but you will have a lot less monthly tax to pay, irrespective of the interest rate, but the CGT bill will be much higher when you come to sell ... as you can see, it is not a ‘get out of jail card’. Now it must be remembered, I am not a tax advisor, so you must take advice from a qualified person 

Those planning to purchase a BTL property will have to factor these new rules into their calculations, and this could affect the offers they are willing to make. However, I am not that concerned, as the scaremonger reports fail to see the fact that two out of three BTL properties that have been bought since 2007 have been purchased without the support of BTL mortgage. With those two thirds of landlords paying cash for the purchase of their rental properties, that means two thirds of landlords will be totally unaffected by the changes.

So what of the future? The British love their Bricks and Mortar, it’s an asset that they can touch and feel and has a 70 year track record of capital growth that has out stripped inflation. Buy to let will still be attractive to Huddersfield investors and let me explain why. If you invested £30,000 in Huddersfield property in September 1987, today it would be worth £111,533. If you had invested the same £30,000 in to the London Stock Market (the FTSE 100 to be exact), it would be only be worth £85,879 today, whilst Inflation would have taken the original £30,000 and pushed it up to £62,345.

It’s true some central London landlords relying solely on the tax breaks rather than high yields may be forced out of the market, but even those landlords could seek to recoup any losses by increasing rents. However, those landlords may leave the market and this could constrict the availability of rented houses even more than it is already, increasing rents and thus pushing yields even higher for landlords and BTL investors still in the market... thus attracting new landlords into the market because of those higher yields.

The reality is, there is too much demand and not enough supply of homes for people to live in in the town. Official figures show the population in Huddersfield is rising by 972 persons per year (i.e., demand rising), but only 361 properties are being built each year (i.e., supply is low). This sets up the Huddersfield (and UK) property market to continue to create strong and steady returns, irrespective of any tax loophole being there (or not as the case maybe).

If the demand is there, I am happy to organise an informal seminar with a local Huddersfield accountant one evening, whereby they can show you the options available and what might be best for you. Therefore, if you are interested in attending, please drop me an email chan.khangura@whitegates.co.uk and we will be able to get something organised very soon.