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/