Only 677 Properties For Sale in Huddersfield

2017 has started with some positive interest in the Huddersfield property market.  Taking a snap shot of the Huddersfield property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Type of Huddersfield Property	Number of Properties on the Market 12 months ago	Number of Properties on the Market now	% change
Detached	143	129	-10%
Semi	178	202	+13%
Terraced	228	214	-6%
Flat	76	95	+25%

So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 677 properties for sale today compared with 706 a year ago, a drop of 4%.

Next, Huddersfield asking prices, compared

to the same as a year ago, are 7% higher.

With that in mind, I wanted to look at what property was actually selling for in Huddersfield. Taking my information from the Land Registry, the last available six months property transactions for HD4 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

	Jun-16	Jul-16	Aug-16	Sep-16	Oct-16	Nov-16
Detached	£322,110 (13)	£281,800 (5)	£231,199 (10)	£195,500 (10)	£239,458 (6)	£329,996 (5)
Semi Detached	£241,643 (7)	£206,969 (8)	£146,269 (16)	£136,667 (9)	£187,292 (6)	£115,000 (10)
Terraced	£138,497 (16)	£119,806 (17)	£119,716 (16)	£83,542 (12)	£91,429 (21)	£115,860 (14)
Flat	£59,500 (3)	£48,500 (1)	£35,000 (1)	£62,000 (3)	£70,800 (5)	£64,000 (1)
All	£212,138 (39)	£166,127 (31)	£153,552 (43)	£128,632 (34)	£127,223 (38)	£149,534 (30)

So what does all this mean for the property owning folk of Huddersfield?

Well, with less property on the market than a year ago and asking prices 7% higher, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Huddersfield property ladder, have much more price information about the Huddersfield property market at their fingertips than ever before.

Those Huddersfield people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Huddersfield estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Huddersfield property-market has an unassailable demand for property – there is one saying that always rings true - as long as the property is being marketed at the right price it will sell.

If you want to know if your Huddersfield property is being marketed at the right price, send me a web link and I will give you my honest opinion.

Huddersfield’s housing affordability hits a ratio of 5.76 to 1

 A Huddersfield homeowner emailed me last week, following my article posted in the Huddersfield Property Blog about the change in attitude to renting by the youngsters of Huddersfield and how they thought it was too expensive for first time buyers to buy in Huddersfield.  There can be no doubt that buy to let landlords have played their part in driving up property values in Huddersfield (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Huddersfield.

In the email, they said they thought the plight of the first-time buyers in Huddersfield was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Huddersfield going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Huddersfield is?  The best measure of the affordability of housing is the ratio of Huddersfield Property Prices to Huddersfield Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Huddersfield property was 5.52 times higher than the average annual wage in Huddersfield).

1998	2000	2002	2004	2006	2008	2010	2012	2014	2016 (EST)
2.91	2.99	3.26	5.05	5.82	5.70	5.33	5.39	5.52	5.76

This deterioration in affordability of property in Huddersfield over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house. 

... but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).  

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 3 bed semi in Huddersfield for around £140,000 and only need to find £7,000 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising ... or not as the case maybe?

I think we as a Country have changed ... renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation ... because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Huddersfield), one source of information is the Huddersfield Property Blog 

‘Flipping’ Heck - Huddersfield Property Values Rise by £12.71 a day

Investing in Huddersfield buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property - the fact that you can touch the bricks and mortar. It is this factor that attracts many of Huddersfield’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in Huddersfield, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you - hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Huddersfield property has risen by £23,200 (equivalent to £12.71 a day), taking it to a current average value of £166,400. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping - buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

·         

One Huddersfield Investor paid £115,000 for a 2 bed terrace on Birdsedge Hill in May 2015. It appears some cosmetic work was done to the property and it was resold a few months ago (November 2016) for £135,000 … 17.39% return before costs (or compound annual return equivalent of 11.10% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=43541743&sale=88997028&country=england

This demonstrates how the Huddersfield property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Huddersfield landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Huddersfield people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Huddersfield, then one place for such information would be the Huddersfield Property Blog. 

How The Rented Sector Has Transformed The Property Market In Huddersfield

How The Rented Sector Has Transformed The Property Market In Huddersfield

The Huddersfield housing market has gone through a sea change in the past decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Huddersfield tenants and Huddersfield landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Huddersfield population.

In 1981, the population of Kirklees stood at 377,300

and today it stands at 434,300.

Currently, the private rented (B-T-L) sector accounts for 18.8% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.

63.96% Huddersfield people owned their own home in 1981

27.17% Huddersfield people rented from the Council or Housing Association in 1981

 and 8.87% Huddersfield rented from a Private Landlord

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Kirklees set to grow to 488,000 by 2037 – it is imperative that Kirklees Metropolitan Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Huddersfield landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, Dating Apps and TV with the likes of Netflix. Many Huddersfield youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Huddersfield and Kirklees, be it B-T-L or B-T-R, has the prospective to play a very positive role.