Huddersfield Landlords could be fined £861,000 per year

“Who would want to move to Huddersfield in weather like this?”, was what one landlord said to me as we shook hands outside his property, the other afternoon. It was windy, cold, it had been raining most of the day and it was the last appointment of the day at 4.45pm. I will admit, as I had been out of the office all day, I was looking forward to getting home, putting the fire on, and watching telly with a big mug of tea.. but this landlord lived in neighbouring Halifax and this was the earliest he could do. 

It turned out he had been self-managing the property himself over the last few years, but was worried with all the new legislation that had been introduced recently. He was particularly concerned about the up and coming ‘Right to Rent’ legislation, so as his tenant had handed in their notice recently, on this new tenancy he called us for our opinion.

For those Huddersfield landlords that don’t know, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the 'Right to Rent' rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.

Our landlord from Halifax wanted to know how much of a real issue was ‘Right to Rent’ in Huddersfield. I was able to tell him, the last available figures (from a couple of years ago) show that 287 people (whom were registered as Non-UK Born Short-term Residents) moved into private rented accommodation in the Kirklees Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £861,000 to the landlords of the town.

It doesn’t sound a lot when you think there are 162,949 residents in Huddersfield, and of those, 140,147 people (or 86.01%) were born in the UK. But Huddersfield is a cosmopolitan town as the country of birth of the residents in Huddersfield can be split down as follows:

·         UK                                                                          86.01%

·         Ireland                                                                     0.87%  

·         Europe                                                                     2.66%

·         Africa                                                                      1.62%

·         Middle East and Asia                                              7.32%

·         Americas and Caribbean                                         1.35%

·         Australia and Pacific region                                    0.13% 

However, it must also be recognised that landlords, by checking up on tenants, could potentially be accused of discrimination under the Equality Act. This is a real minefield for landlords, especially when you consider that not all of the 4,335 Europeans in the area necessarily have the right to live in the UK either.

In a nutshell, Huddersfield landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include ....

·         UK Passport

·         EEA Passport/Identity card

·         Travel document or Permanent Residence Card showing indefinite leave to remain

·         Paperwork from Home Office stating their Immigration status

·         Certificate of registration or naturalisation as a British citizen.

I hope the new law will target dishonest landlords who repeatedly fail to carry out Right to Rent checks by making it a criminal offence. This means they could face imprisonment for failing to check on their tenants. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.

So what did our landlord do?

Well after our chat, he asked us to find a tenant and manage the property for him - he had been reading the Huddersfield Property Blog for a while and because of the knowledge we impart to the landlords of Huddersfield, we obviously know what we are talking about.  Even better news for him, even though this would cost him agency fees, I was able to get him an additional £35 per month for his property (when we found him a tenant one week later). Now, together with the peace of mind we will keep him the right side of the law and put a stop to midnight phone calls complaining about dripping taps, it was a win-win situation for everyone.

Huddersfield Landlords count the cost of a Tory Election win

Can you remember 10.05pm on Thursday, 7^th May 2015 ... with the shock news that BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Fixby and Ainley Top exhaled a huge sigh of relief, as Huddersfield landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about as the Tory’s were always considered to be a political party that accepted the importance of the rental market, supported its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.

Since May though, George Osborne announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages, some people have started to question that loyalty. However, things could have been a lot worse for Huddersfield landlords as previous ideas of making landlord’s pay more tax was the idea (which was seriously considered) of increasing Capital 

Gains Tax rates to the landlord’s own income tax levels. If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non starter for almost everyone.

However, I will admit the loss of mortgage higher rate tax relief will make a number of properties not stack up financially. The new rules are likely to slow demand in the Huddersfield housing market, which is in fact good news for the other landlords, as there is less competition from 'amateur' landlords offering too much.

Just a thought, but making Huddersfield landlords think twice and

run their numbers more cautiously is not such a bad thing.

So looking at the numbers, the November figures have just been released and they show a growth of property values in Huddersfield of 0.7% over the month of November. That figure doesn’t surprise me due to the time of year. It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months, property values in Huddersfield have risen by 3.4%, not bad when you consider inflation is running at -0.1%.

However, regular readers of the Huddersfield Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but what types of property are actually selling in Huddersfield?  Looking at all the properties sold, as recorded by the Land Registry, within 2 miles of the centre of Huddersfield in September 2015 (this data always runs a couple of months behind the house price data) compared to September 2007 (a couple of months before the credit crunch started to bite and the subsequent property crash).

	Sept 2007	Sept 2015	Difference
Detached in Huddersfield	26	14	-46%
Semis in Huddersfield	59	34	-42%
Terraced Houses in Huddersfield	98	57	-42%
Apartments / Flats in Huddersfield	15	6	-60%

Now I have mentioned in previous articles that the numbers of properties selling in the town has certainly dropped post 2008, but what amazed me were the greater drop in the number of apartments selling in Huddersfield compared to the drop of detached, semis and terraced properties.

Less properties are selling than last decade in Huddersfield

and the types of properties selling have changed ...

interesting times ahead for the Huddersfield Property market!

Therefore, all I can say to the landlords of Huddersfield is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price. One place for such advice and opinion on the Huddersfield Property market is the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Where will Huddersfield Property Prices be by 2021?

I was having lunch the other day at Three Acres Inn and Restaurant at the Three Acres Hotel in Huddersfield, with a local Huddersfield solicitor friend of mine, when the subject of property came up. He asked me my thoughts on the Huddersfield property market for the next five years.  Property prices are both a British national obsession and a key driver of the British consumer economy.  So what will happen next in the property market? So here is what I told him, and now wish, my blog reading friends, to share with you.

Before I can predict what will happen over the next five years to Huddersfield house prices, firstly I need to look at what has happen over the last five years.  One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth – key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy to let landlords have an appetite to continue purchasing buy to let property.

When the Tory’s came to power in May 2010, the total number of people who were unemployed in town stood at 3,410 (or 7.6% of the working age population in Huddersfield parliamentary constituency’s). Last month, this had dropped to 1,680 people (or 3.7% of the working age population).

As the Huddersfield job market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).  That is why, even with the colossal turbulence of the last few years, property values in the Huddersfield area are only 0.09% lower today than they were five years ago.

Many home occupiers have held back moving house over the past seven to eight years following the Credit Crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market. With a more stable economy in the town, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Huddersfield.

I forecast that the value of the average home

in Huddersfield will increase by 17.8% by 2021

17.8% might sound optimistic to some, but according to Land Registry, values are currently rising in Huddersfield at 2.6% year on year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole.

However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Huddersfield housing market.  The number of properties for sale in Huddersfield is lower than it was five years ago, restricting choice for buyers (yet the other side of the coin is that that keeps prices higher). Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy to let taxation rules which are being introduced between 2017 and 2021 (although choosing the right sort of property / portfolio mix in Huddersfield will, I believe, mitigate those issues with the next taxation rules).

I am telling the landlords I speak to, that with interest rates at their current level 0.5%, the cash in your Building Society Passbook is going to grow so slowly that it might as well be kept under their bed. Property prices, by contrast, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation.

So my final thought ...  property is a long term investment, it has its’ up and downs, but it has always outperformed, in the long term, most investments. Those in their 40’s and 50’s in Huddersfield would be mad not to include property in their long term financial calculations. Just make sure you buy the right property, at the price in the right location. One source of information on such matters would be the Huddersfield Property Blog  http://huddersfieldproperty.blogspot.co.uk/