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/