Tuesday, 31 January 2017

803 Huddersfield Households Occupied by OAP Renters

Recent statistics published by the Office of National Statistics show that there are 267,704 private rented households in the Country that are occupied by people aged 65 and older, meaning 4.39% of OAP’s are living in private rented property.

It got me thinking two things. How many of these OAP’s have always rented and how many have sold up and become a tenant?  In retirement, selling up could make financial sense to the mature generation in Huddersfield, potentially allowing them to liquidate the equity of their main home to enhance their retirement income.  I wanted to know why these older people rent and whether there was opportunity for the buy to let landlords of Huddersfield?

The Prudential published a survey recently that said nearly six out of ten OAP renters had never owned a home.  Two out of ten OAP renters were required to sell up because of debt, just about one in ten OAP renters sold their property to use the money to fund their retirement and the remaining one out ten OAP renters, rented for other reasons.

Funding retirement is important as the life expectancy of someone from Huddersfield at age 65 (years) is 18.1 years for males and 20.5 years for females (interesting when compared to the National Average of 18.7 years for males and 21.1 years for females).  The burdens of financing a long retirement are being felt by many mature people of Huddersfield.  The state of play is not helped by rising living costs and ultra-low interest rates reducing returns for savers.

So, what of Huddersfield?  Of the 16,453 households in Huddersfield, whose head of the household is 65 or over, not surprisingly 12,254 of households were owned (74.48%) and 2,829 (17.19%) were in social housing.  However, the figure that fascinated me was the 803 (4.88%) households that were in privately rented properties.

Anecdotal evidence, by talking to both my team and other Huddersfield property professionals is that this figure is rising.  More and more Huddersfield OAP’s are selling their large Huddersfield homes and renting something more manageable, allowing them to release all of their equity from their old home.  This equity can be gifted to grandchildren (allowing them to get on the property ladder), invested in plans that produce a decent income and while living the life they want to live.

These Huddersfield OAP renters know they have a fixed monthly expenditure and can budget accordingly with the peace of mind that their property maintenance and the upkeep of the buildings are included in the rent.  Many landlords will also include gardening in the rent! Renting is also more adaptable to the trials of being an OAP - the capability to move at short notice can be convenient for those moving into nursing homes, and it doesn't leave family members panicking to sell the property to fund care-home fees.


Huddersfield landlords should seriously consider low maintenance semi-detached bungalows on decent bus routes and close to doctor’s surgeries as a potential investment strategy to broaden their portfolio.  Get it right and you will have a wonderful tenant, who if the property offers everything a mature tenant wants and needs, will pay top dollar in rent!

Monday, 23 January 2017

Huddersfield Unemployment Drops to 5.9% and its effect on the Huddersfield Property Market

It was late May 2016, The Right Hon. Member for Tatton, Mr George Osborne, published an official HM Treasury analysis stating UK house prices would be lower by at least 10% (and up to 18%) by the middle of 2018 compared with what is expected if the UK remained in the European Union. So, eight months on from the Referendum, are we beginning to show signs of that prophecy? The simple answer is yes and no.

Good barometers of the housing market are the share prices of the big UK builders. Much was made of Barratt’s share price dropping by 42.5% in the two weeks after Brexit, along with Taylor Wimpey’s equally eye watering drop in the same two weeks by 37.9%. Looking at the most recent set of data from the Land Registry, property values in Huddersfield have barely grown with an increase of 0.05% month on month (and the month before that, they had decreased by 0.47%) – so is this the time to panic and run for the hills?

Doom and Gloom then? Well, let me consider the other side of the coin.

Well, as I have spoken about many times in my blog, it is dangerous to look at short term. I have mentioned in several recent articles, the heady days of the Huddersfield property prices rising quicker than a thermometer in the desert sun between the years 2011 and late 2016 are long gone – and good riddance. Yet it might surprise you during those impressive years of house price growth, the growth wasn’t smooth and all upward. Huddersfield property values dropped by an eye watering 0.94% in August 2013 and 0.81% in March 2015 – and no one batted an eyelid then.

You see, property values in Huddersfield are still 3.02% higher than a year ago, meaning the average value of a Huddersfield property today is £169,000. Even the shares of those new home builders Barratt have increased by 43.3% since early July and Taylor Wimpey’s have increased by 37.3%. The Office for Budget Responsibility, the Government Spending Watchdog, recently revised down its forecast for house-price growth in the coming years - but only slightly.

The Huddersfield housing market has been steadfast partly because, so far at least, the wider economy has performed better than expected since Brexit. There is a robust link between the unemployment rate and property prices, and a flimsier one with wage growth. Unemployment in the Kirklees Metropolitan Borough Council area stands at 12,300 people (5.9%), which is considerably better than a few years ago in 2013 when there were 17,700 people unemployed (8.3%) in the same council area.

However, inflation is the only thing that does worry me. Looking at all the pundits, it will get to at least 3% (if not more) in the latter part of 2017 as the drop in Sterling in late 2016 renders our imports with higher prices. If that transpires then the Bank of England, whose target for inflation is 2%, may raise interest rates from 0.25% to 2%+. However, that won’t be so much of an issue as 81.6% of new mortgages in the UK in the last two years have been fixed-rate and who amongst us can remember 1992 with Interest rates of 15%!


Forget Brexit and yes inflation will be a thorn in the side – but the greatest risk to the Huddersfield (and British) property market is that there are simply not enough properties being built thus keeping house prices artificially high. Good news for those on the property ladder, but not for those first-time buyers that aren’t! In the coming weeks in my articles on the Huddersfield Property Market, I will discuss this matter further! 

£9.64bn – The total value of all Huddersfield Property Market

“How much would it cost to buy all the properties in Huddersfield?”

This fascinating question was posed by the 14-year-old son of one of my Huddersfield landlords when they both popped into my offices before the Christmas break (doesn’t that seem an age away now!). I thought to myself, that over the Christmas break, I would sit down and calculate what the total value of all the properties in Huddersfield are worth … and just for fun, work out how much they have gone up in value since his son was born back in the autumn of 2002.

In the last 14 years, since the autumn of 2002, the total value of Huddersfield property has increased by 107% or £4.99 billion to a total of £9.64 billion. Interesting, when you consider the FTSE100 has risen by 68.9% and inflation (i.e. the UK Retail Price Index) rose by 38.7% during the same 14 years.

When I delved deeper into the numbers, the average price currently being paid by Huddersfield households stands at £130,446.… but you know me, I wasn’t going to stop there, so I split the property market down into individual property types in Huddersfield; the average numbers come out like this ..

Huddersfield Property Market
Average Value of a Detached Property
Average Value of a Semi-Detached Property
Average Value of a Terraced/Town House Property
Average Value of an Apartment
£257,153
£156,506
87,841
£105,500

... yet it got even more fascinating when I multiplied the total number of each type of property by the average value. Even though detached houses are more expensive, when you compare them with the much cheaper semi-detached houses, you can quite clearly see detached properties are no match in terms of total pound note value of the semi-detached houses.

Total Value of all the Huddersfield Detached Properties
Total Value of all the Huddersfield Semi-Detached Properties
Total Value of all the Huddersfield Terraced/Town House Properties
Total Value of all the Huddersfield Apartments
£2,967,545,620
£3,367,226,590
£2,289,751,347
£1,019,552,000

So, what does this all mean for Huddersfield?  Well as we enter the unchartered waters of 2017 and beyond, even though property values are already declining in certain parts of the previously over cooked Central London property market, the outlook in Huddersfield remains relatively good as over the last five years, the local property market was a lot more sensible than central London’s.


Huddersfield house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with continued immigration and population growth.  Secondly, with 0.25 per cent interest rates, borrowing has never been so cheap and finally the simple lack of new house building in Huddersfield not keeping up with current demand, let alone eating into years and years of under investment – means only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Huddersfield has always, and will always, ride out the storm.

In the coming weeks, I will look in greater detail at my thoughts for the 2017 Huddersfield Property Market. As always, all my articles can be found at the Huddersfield Property Market Blog  https://huddersfieldproperty.blogspot.co.uk/ 

Tuesday, 10 January 2017

£43m a year black hole in the Huddersfield Property Market - Is Buy to Let Immoral? (Part 2)

£43m a year black hole in the Huddersfield Property Market - Is Buy to Let Immoral? (Part 2)  

An Englishman’s Home is His Castle as Maggie Thatcher lauded - everyone should own their own home. In 1971, around 50% of people owned their own home and, as the baby-boomers got better jobs and pay, that proportion of homeowners rose to 69% by 2001. Homeownership was here to stay as many baby boomers assumed it’s very much a cultural thing here in Britain to own your own home.

But on the back of TV programmes like Homes Under the Hammer, these same baby boomers started to jump on the band wagon of Huddersfield buy to let properties as an investment. Huddersfield first time buyers were in competition with Huddersfield landlords to buy these smaller starter homes … pushing house prices up in the 2000’s (as mentioned in Part One) beyond the reach of first time buyers. Alas, it is not as simple as that. Many factors come into play, such as economics, the banks and government policy. But are Huddersfield landlords fanning the flames of the Huddersfield housing crisis bonfire?

I believe that the landlords of the 12,973 Huddersfield rental properties are not exploitive and are in fact, making many positive contributions to Huddersfield and the people of Huddersfield. Like I have said before, Huddersfield (and the rest of the UK) isn’t building enough properties to keep up the demand; with high birth rate, job mobility, growing population and longer life expectancy.

According to the Barker Review, for the UK to standstill and meet current demand, the country needs to be building 8.7 new households each and every year for every 1,000 households already built. Nationally, we are currently running at 5.07 per thousand and in the early part of this decade were running at 4.1 to 4.3 per thousand.

It doesn’t sound a lot of difference, so let us look at what this means for Huddersfield …

For Huddersfield to meet its obligation on the building of new homes, Huddersfield would need to build 602 households each year. Yet, we are missing that figure by around 251 households a year.

For the Government to buy the land and build those additional 251 households, it would need to spend £43,497,791 a year in Huddersfield alone. Add up all the additional households required over the whole of the UK and the Government would need to spend £23.31bn each year … the Country hasn’t got that sort of money!

With these problems, it is the property developers who are buying the old run-down houses and office blocks which are deemed uninhabitable by the local authority, and turning them into new attractive homes to either be rented privately to Huddersfield families or Huddersfield people who need council housing because the local authority hasn’t got enough properties to go around.

The bottom line is that, as the population grows, there aren’t enough properties being built for everyone to have a roof over their head. Rogue landlords need to be put out of business, whilst tenants should expect a more regulated rental market, with greater security for tenants, where they can rely on good landlords providing them high standards from their safe and modernised home. As in Europe, where most people rent rather than buy, it doesn’t matter who owns the house – all people want is a clean, decent roof over their head at a reasonable rent.




So only you, the reader, can decide if buy to let is immoral, but first let me ask this question - if the private buy to let landlords had not taken up the slack and provided a roof over these people’s heads over the last decade .. where would these tenants be living now? ….. because the alternative doesn’t even bear thinking about!

Huddersfield’s private renting set to hit 18,292 households by 2021 - Is Buy to Let immoral? (Part 1)

Huddersfield’s private renting set to hit 18,292 households by 2021 - Is Buy to Let immoral? (Part 1)

Can we blame the 55 to 70-year-old Huddersfield citizens for the current housing crisis in the town?

Also known as the ‘Baby Boomer Generation’, these Huddersfield people were born after the end of the Second World War as the country saw a massive rise in births as they slowly recovered from the economic hardships experienced during wartime.

Throughout the 1970’s and 1980’s, they experienced (whilst in their 20’s, 30’s and 40’s) an unparalleled level of economic growth and prosperity throughout their working lifetime on the back of improved education, government subsidies, escalating property prices and technological developments, they have emerged as a successful and prosperous generation.

...Yet some have suggested these Huddersfield baby boomers have (and are) making too much money to the detriment of their children, creating a ‘generational economic imbalance’, where mature people benefit from house-price growth while their children are forced either to pay massive rents or pay large mortgages.

Between 2001 and today, average earnings rose by 65%,
but average Huddersfield house prices rose by 145.15%

The issue of housing is particularly acute with the generation called the Millennials, who are young people born between the mid 1980’s and the late 1990’s. These 18 to 30 years, moulded by the computer and internet revolution, are finding as they enter early adult life, very hard to buy a property, as these ‘greedy’ landlords are buying up all the property to rent out back to them at exorbitant rents ... it’s no wonder these Millennials are lashing out at buy to let landlords, as they are seen as the greedy, immoral, wicked people who are cashing in on a social despair.

Like all things in life, we must look to the past, to appreciate where we are now.

The three biggest influencing factors on the Huddersfield (and UK) property market in the later half of the 20th Century were, firstly, the mass building of Council Housing in the 1950’s and 60’s. Secondly, for the Tory’s to sell most of those Council Houses off in the 1980’s and finally 15% interest rates in the early 1990’s which resulted in many houses being repossessed. It was these major factors that underpinned the housing crisis we have today in Huddersfield.

To start with, in 1995 the USA relaxed its lending rules by rewriting the Community Reinvestment Act. This Act saw a relaxation on the Bank’s lending criteria’s as there was pressure on these banks to lend on mortgages in low wage neighbourhoods, as the viewpoint in the USA was that anyone (even someone on the minimum wage) any working class person should be able to buy a home.  Unsurprisingly, the UK followed suit in the early 2000’s, as Banks and Building Society’s relaxed their lending criteria and brought to the market 100% mortgages, even Northern Rock started lending every man and his dog 125% mortgages.

So when we roll the clock forward to today, and we can observe those very same footloose banks from the early/mid 2000’s (that lent 125% with a just note from your Mum and a couple of breakfast cereal tokens), ironically reciting the Bank of England backed hymn-sheet of responsible-lending. On every first time buyer mortgage application, they are now looking at every line on the 20-something’s banks statements, asking if they are spending too much on socialising and holidays ... no wonder these Millennials are afraid to ask for a mortgage (as more often than not after all that – the answer is negative).

Conversely, you have unregulated Buy To Let mortgages. As long as you have a 25% deposit, have a pulse, pass a few very basic yardsticks and have a reasonable job, the banks will literally throw money at you ... I mean Virgin Money are offering 2.99% fixed for 3 years – so cheap!


So, in Part Two next week, I will continue this emotive article and show you some very interesting findings on why young people aren’t buying property anymore (and it’s not what you think!).