With the election now over and the stability of Downing
Street secure, with David Cameron and his Blue Tories as the largest party in
Westminster, in Huddersfield (as in the rest of the UK) average wages are
beginning to grow faster than inflation. This is good news for the Huddersfield
housing market, as some buyers may be willing or able to pay
higher prices given the more certain political outlook and attractive
inexpensive mortgage rates. However, sellers who think they have the upper hand
due to the lack of property for sale should be aware that we should start to
see an increase in the number of people putting their properties on to
the market in Huddersfield giving buyers some extra negotiating power.
At the last election in May 2010, there were 944 properties
for sale in Huddersfield and by October 2010, this had risen to 1,155, an
impressive rise of 22% in five months. An increase in the supply of properties
coming on to the market could tip the balance in the demand and supply
economics seesaw, thus potentially denting prices. However, as most sellers are
buyers and confidence is high, this means there will be good levels of property
and buyers, well into the summer, as demand will continue to slightly outstrip
supply.
Just before we leave the run up to the election, it is
important to consider what the uncertainty in April did to the Huddersfield property
market. I mentioned a few weeks ago that property values (ie what properties
were actually selling for) had risen by 0.6% in March 2015. Now new data has
been released from Rightmove about April’s asking prices of property in Huddersfield.
It shows that pre-election nerves finally came home to roost in the final weeks
of electioneering, with the average price of property coming to market decreasing
by 0.1% (April is normally one of the best months of the year for house price
growth).
I am sure our local MP, Barry Sheerman, would agree that the
biggest issue is the lack of new properties being built in Huddersfield. The
Conservative manifesto pledged to build 200,000 discounted starter homes for
first-time buyers in the next five years. For Huddersfield to gets its share,
that would mean only 125 such properties being built in Huddersfield each year
for the next five years, not much when you consider there are 69,144 properties
in Huddersfield.
Housing is not a big issue for Conservative voters and
because London is an increasingly Labour city where the biggest housing issues
are found by a country mile, so will it remain on the ‘to do list’ but won’t
get recognition it deserves. Until another political party gets back into power,
nothing will seismically change in the property market, thus demand for housing
will continue to outstrip supply, meaning property values will increase (good
news for landlords). However, as rents tend to go up and down with tenant
wages, in the long term, rents are still only 3.07% higher than they were in
2008 (good news for tenants)... with renting everyone wins!
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