18.53 Babies Born for Each New Home Built in the Huddersfield area

As more babies are being born to Huddersfield and Kirklees mothers, I believe this increase will continue to add pressure to the over stretched Huddersfield property market and materially affect the local property market in the years to come.

On the back of eight years of ever incremental increasing birth rates, a significant 18.53 babies were born for every new home that was built in the Kirklees council area in 2016.  I believe this has and will continue to exacerbate the Huddersfield housing shortage, meaning demand for housing, be it to buy or rent, has remained high.  The high birth rate has meant Huddersfield rents and Huddersfield property prices have remained resilient – even with the challenges the economy has felt over the last eight years, and they will continue to remain high in the years to come.

This ratio of births to new homes has reach one its highest levels since 1945 (back in the early 1970’s the average was only one and a half births for every household built).  Looking at the local birth rates, the latest figures show we in the Kirklees council area had an average of 64.2 births per 1,000 women aged 15 to 44.  Interestingly, the national average is 61.7 births per 1,000 women aged 15 to 44 and for the region its 61.9 births per 1,000 women aged 15 to 44.

The number of births from Huddersfield and Kirklees women between the ages of 20 to 29 are much higher than the national average, but those between 35 and 44 were significantly lower.  However overall, the birth rate is still increasing, and when that fact is combined with the ever-increasing life expectancy in the Huddersfield area, the high levels of net migration into the area over the last 14 years (which I talked about in the previous articles) and the higher predominance of single person households … this can only mean one thing ... a huge increase in the need for housing in Huddersfield.

Again, in a previous article a while back, I said more and more people are having children as tenants because they feel safe in rented accommodation.  Renting is becoming a choice for Huddersfield people.

The planners and Politian’s of our local authority, central Government and people as a whole need to recognise that with individuals living longer, people having more children and whilst divorce rates have dropped recently, they are still at a relatively high level (meaning one household becomes two households) ... demand for property is simply outstripping supply.

The simple fact is more Huddersfield properties need to be built

… be that for buying or renting.

Only 1.1% of the Country is built on by houses.  Now I am not suggesting we build tower blocks in the middle of the Cotswolds, but the obsession of not building on any green belt land should be carefully re-considered.

Yes, we need to build on brownfield sites first, but there aren’t hundreds of acres of brownfield sites in Huddersfield, and what brownfield sites there are, building on them can only work with complementary public investment.  Many such sites are contaminated and aren’t financially viable to develop, so unless the Government put their hand in their pocket, they will never be built on.

I am not saying we should crudely go ‘hell for leather’ building on our Green Belt, but we need a new approach to enable some parts of the countryside to be regarded more positively by local authorities, politicians and communities and allow considered and empathetic development.  Society in the UK needs to look at the green belts outside their leisure and visual appeal, and assess how they can help to shape the way we live in the most even-handed way.  Interesting times!

For more thoughts on the Huddersfield Property market – visit the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/

Hard Brexit could cause 2,700 properties to be dumped onto the local Property market

So all cards up in the air! A general election will be on the books, but one thing is for sure ... whoever gets the job to deal with Brexit has a hard job on their hands (I'm just glad its not me!) As it currently stands, by not assuring the rights of EU citizens in the UK, Theresa May has squandered an opportunity to give peace of mind to our EU co-workers working and living in Huddersfield (and the rest of the UK). No.10 Downing Street’s point of view is that in promising the rights of EU citizens in the UK, it will postpone the same guarantee to the 1.5 million UK citizens living in the other nations of the EU.

Putting aside the politics for one second, the simple fact is now Article 50 has been triggered, we have two years to make a deal with the EU; otherwise it will be a ‘hard Brexit’. Now you might not think a hard Brexit will affect you in your home in Huddersfield ... but nothing could be further from the truth.

Of the 416,840 people who are resident in the Kirklees Metropolitan Borough Council area, 371,929 were born in the UK, 4,594 were born in EU countries from West Europe and 4,078 were born in EU countries from the former Soviet States in East Europe (the rest coming from other countries around the world).

The rights of these EU citizens living in the Huddersfield area are not guaranteed and will now be part of the negotiation with Europe. It is true a lot of our EU next door neighbours in Huddersfield will have acquired rights relating to the right to live, to work, to own a business, to possess a property, the right to access health and education services and the right to remain in a UK after retirement… yet those acquired rights are up for negotiation in the next two years.

So, what would a hard Brexit do to the Huddersfield property market?

Well a hard Brexit could mean the nuclear option when it came to the Huddersfield housing market. It could mean that every EU citizen would have to leave the UK.

In the Kirklees Metropolitan Borough area, 2,867 of the 4,594 Western European EU citizens own their own home and (so they would all need to be sold) and 2,537 of the 4,078 Eastern European EU citizens rent a property, so again all those rental properties would all come on the market at the same time.

Hard Brexit and mass EU Migration would mean c. 2,700 properties being dumped onto the housing market in a short period of time, meaning there would be a massive drop in Huddersfield property values and rents, causing negative equity for thousands of Huddersfield homeowners and many buy-to-let landlords would be out of pocket.

While there is no certainty as to what the future will hold, both UK expats in the EU and EU citizens in the UK rights will no longer be guaranteed and will be subject to bilateral renegotiation.

All I ask is that the politicians are sensible with each other in the negotiations. A lot of the success of the Huddersfield (and UK) property market has been built on high levels of homeownership and more recently in the last 10/15 years, a growth of the rental sector with lots of demand from Eastern Europeans coming to Huddersfield (and the surrounding area) to get work and provide for their families. Many Huddersfield people have invested their life savings into buying a buy to let property.

Much will depend on what is politically realistic. Unilateral knee-jerk reactions and measures caused by a hard Brexit would not only likely cause major disruption or suffering to the 3 million EU citizens living in the UK, but also everyone who owns property in the UK ... politics aside - a hard Brexit is in no one’s interests. 

For more thoughts on the Huddersfield Property market – please visit the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/

Should the 18,568 home owning OAP’s of Huddersfield be forced to downsize?

This was a question posed to me on social media a few weeks ago, after my article about our mature members of Huddersfield society and the fact many retirees feel trapped in their homes. After working hard for many years and buying a home for themselves and their family, the children have subsequently flown the nest and now they are left to rattle round in a big house. Many feel trapped in their big homes (hence I dubbed these Huddersfield home owning mature members of our society, ‘Generation Trapped’).

So, should we force OAP Huddersfield homeowners to downsize?

Well in the original article, I suggested that we as a society should encourage, through building, tax breaks and social acceptance that it’s a good thing to downsize. But should the Government force OAP’s?

Well, one of the biggest reasons OAP’s move home is health (or lack of it)

Looking at the statistics for Huddersfield, of the 18,568 Homeowners who are 65 years and older, whilst 9,518 of them described themselves in good or very good health, a sizeable 6,490 home owning OAPs described themselves as in fair health and 2,560 in bad or very bad health.

13.79% of Huddersfield home owning OAP’s are in poor health

But if you look at the figures for the whole of Kirklees Metropolitan Borough Council (not just Huddersfield), there are only 61 specialist retirement homes that one could buy (if they were in fact for sale) and 1,716 homes available to rent from the Council and other specialist providers (again- you would be waiting for dead man’s shoes to get your foot in the door) and many older homeowners wouldn’t feel comfortable with the idea of renting a retirement property after enjoying the security of owning their own home for most of their adult lives.

My intuition tells me the majority ‘would be’ Huddersfield downsizers could certainly afford to move but are staying put in bigger family homes because they can't find a suitable smaller property. The fact is there simply aren’t enough bungalows for the healthy older members of the Huddersfield population and specialist retirement properties for the ones who aren’t in such good health ... we need to build more appropriate houses in Huddersfield.

The Government's Housing White Paper, published a few weeks ago, could have solved so many problems with the UK housing market, including the issue of homing our aging population. Instead, it ended up feeling annoyingly ambiguous. Forcing our older generation to move with such measures as a punitive taxation (say a tax on wasted bedrooms for people who are retired) would be the wrong thing to do. Instead of the stick – maybe the Government could use the carrot tactics and offered tax breaks for downsizers. Who knows – but something has to happen?

.. and come to think about it, isn’t the word ‘downsize’ such an awful word?  I prefer to use the word ‘decent-size’ instead of ‘down-size’- as the other phrase feels like they are lowering themselves, as though they are having to downgrade themselves in their retirement (and let’s be frank – no one likes to be downgraded).

The simple fact is we are living longer as a population and constantly growing with increased birth rates and immigration. So, what I would say to all the homeowners and property owning public of Huddersfield is ... more houses and apartments need to be built in the Huddersfield area, especially more specialist retirement properties and bungalows. The Government had a golden opportunity with the White Paper – and were sadly found lacking.

And a message to my Huddersfield property investor readers whilst this issue gets sorted in the coming decade(s)  – maybe seriously consider doing up older bungalows – people will pay handsomely for them – be they for sale or even rent? Just a thought!

For more thoughts on the Huddersfield Property market – please visit the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/

5,051,600 People use Huddersfield Train Station a year - How does that affect the Huddersfield Property Market?

It might surprise you that it isn’t always the poshest villages around Huddersfield or the swankiest Huddersfield streets where properties sell and let the quickest. Quite often, it’s the ones that have the best transport links. I mean, there is a reason why one of the most popular property programmes on television is called Location, Location, Location!

As an agent in Huddersfield, I am frequently confronted with queries about the Huddersfield property market, and most days I am asked, “What is the best part of Huddersfield and its villages to live in these days?”, chiefly from new-comers.  Now the answer is different for each person – a lot depends on the demographics of their family, their age, schooling requirements and interests etc. Nonetheless, one of the principal necessities for most tenants and buyers is ease of access to transport links, including public transport – of which the railways are very important.

Official figures recently released state that, in total, 6,925 people jump on a train each and every day from Huddersfield Train station. Of those, 2,364 are season ticket holders. That’s a lot of money being spent when a season ticket, standard class, to Leeds is £1,324 a year.

So, if up to £3.13m is being spent on rail season tickets each year from Huddersfield, those commuters must have some impressive jobs and incomes to allow them to afford that season ticket in the first place. That means demand for middle to upper market properties remains strong in Huddersfield and the surrounding area and so, in turn, these are the type of people whom are happy to invest in the Huddersfield buy to let market – providing homes for the tenants of Huddersfield…

The bottom line is that property values in Huddersfield would be much lower, by at least 3% to 4%, if it wasn’t for the proximity of the railway station and the people it serves in the town

And this isn’t a flash in the pan. Rail is becoming increasingly important as the costs associated with car travel continue to rise and roads are becoming more and more congested. This has resulted in a huge surge in rail travel.  

Overall usage of the station at Huddersfield has increased over the last 20 years. In 1997, a total of 1,681,763 people went through the barriers or connected with another train at the station in that 12-month period. However, in 2016, that figure had risen to 5,041,600 people using the station (that’s 13,851 people a day).

The juxtaposition of the property and the train station has an important effect on the value and saleability of a Huddersfield property. It is also significant for tenants - so if you are a Huddersfield buy to let investor looking for a property - the distance to and from the railway station can be extremely significant.

One of the first things house buyers and tenants do when surfing the web for somewhere to live is find out the proximity of a property to the train station. That is why Rightmove displays the distance to the railway station alongside each and every property on their website. 

For more thoughts on the Huddersfield Property market – please visit the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/

Huddersfield rents rise by 16.7% since 2005

Huddersfield rents rise by 16.7% since 2005

The Huddersfield Property Market is a very interesting animal and has been particularly fascinating over the last 12 years when we consider what has happened to Huddersfield rents and house prices.

There’s currently much talk of what will happen to the rental property market following Brexit. To judge that, I believe we must look what happened in the 2008/9 credit crunch (and what has happened since) to judge rationale and methodically, the possible ramifications for long-term investors in the Huddersfield property market. You see, an important, yet overlooked measure is the performance of rental income vs house prices (i.e. the resultant yields over time). In Huddersfield (as for the rest of Great Britain), notwithstanding a slight drop in 2008 and 2009, property rentals have been gradually increasing.

The income from rentals has been progressively increasing over the last 12 years. Today, they are 16.7% higher than they were at the beginning of 2005. In fact, over the last five years, the average growth has been 0.9% per annum. From a landlord’s point of view, increase in average rental income is not to be sneered at. However, the observant readers will be noting that we are ignoring an important factor – our friend inflation.

Turn the clock back to 2005, and we have a property being rented for say £900 a month and that is still being rented at £900 a month today, in Spring of 2017. While the landlord is not getting any less income, this £900 is no longer worth as much. Let me explain, in 2005, £900 may have bought a two-week 4* holiday in Italy. Yet, holidays have increased in line with inflation (which has been 38.5% since 2005), so our holiday would cost today £1,246 (£900 + 38.5% inflation = £1,246). Therefore, the landlord could no longer afford the same holiday, even though having the same amount in pound notes from their rental property.

This means when we compare rents in Huddersfield to inflation since 2005, Huddersfield landlords are worse off today, when they receive their monthly rental income, than they were in 2005 by 21.8% in real terms (rents increased by 16.7% since 2005, less the 38.5% inflation since 2005 – net affect 21.8% drop) 

However, rental income is not the only way to generate money from property as property values can increase. Although in the short term, cash flows are diminishing, many Huddersfield landlords may be content to accept that for a colossal increase in capital value.

Property values in Huddersfield have risen by 23% since 2005

This equates to a reasonably salubrious 1.91% per annum increase over the last 12 years. Even more interesting that this includes the 2008/9 property crash, this will make those Huddersfield landlords and investors feel a little better about the information regarding rents after inflation.

Moving forward, the prospects of making easy money on buy to let in Huddersfield have diminished, when compared to 2005. Last decade, making money from buy to let was as easy as falling off a log – but not anymore.

It would be true to say, my rental income verses property prices study does lead to noteworthy thoughts. I am often asked to look at my landlord’s rental portfolios, to ascertain the spread of their investment across their multiple properties. It’s all about judging whether what you have will meet your needs of the investment in the future. It’s the balance of capital growth and yield whilst diversifying this risk.

If you are investing in the Huddersfield property market, do your homework and do it well. While some yields may look attractive, there are properties in many areas that do not have the solid rudiments in place to sustain them. If you are looking for capital growth, you might be surprised where the hidden gems really are. Take advice, even ask your agent for a portfolio analysis like I offer my landlords. The clear majority of agents in Huddersfield will be able to give a detailed analysis of past and anticipated investment opportunity (especially the awful effect of inflation) on your portfolio. However, if they can’t help – well, you know where I am, the kettle is on!

For more thoughts on the Huddersfield Property market – visit the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/

Huddersfield Rents To Rise Quicker Than Huddersfield Property Prices In Next 5 Years

The next five years will see an interesting change in the Huddersfield property market. My recent research has concluded that the rent private tenants pay in Huddersfield will rise faster than Huddersfield property prices over the next five years, creating further issues to Huddersfield’s growing multitude of renters. In fact, my examination of statistics forecasts that ..

By 2022, Huddersfield rents will increase by 22%, whereas Huddersfield property values will only grow by 16%.

Let me explain why I have come to those conclusions:

Over the last five years, property values in Huddersfield have risen by 16.2%, whilst rents have only risen by 7.8%.

Throughout the last few years, and compounded in 2016, tenant demand for rental properties continued to go up whilst the Press predicted some landlords expect to reduce their portfolios in the next couple of years, meaning Huddersfield tenants will have fewer properties to choose from, which will push rents higher. In fact, talking to fellow property professionals in Huddersfield, there appears to be privation and shortage of new rental properties coming on to the Huddersfield lettings market.

Landlords have some intriguing challenges ahead of them in the coming years most notably in that the Tory’s have changed the taxation rules for landlords in the way buy to let properties are to be taxed. On top of that, there is the ban on letting agent fees which is still to come into force (probably in 2018). When that happened in Scotland in 2012, Scottish letting agents passed on those fees to their landlords, who in turn increased the rent they charged to their tenants.

All I would say to Theresa May and Philip Hammond is that they must be wary about indicating both red and green lights at the same time to the private rented sector. They can’t expect the armies of small private landlords to continue to house around a fifth of the population and then tax the hell out of them. They didn’t invest in buy to let as a charity or to satisfy any philanthropic urges. Something has to give – and that will be significant rent rises over the coming few years (and before anyone gives me any derogatory comments about landlords … if it wasn’t for landlords buying all these buy to let properties over the last 15 years, I am not sure where everyone would be living today – because most the Council houses were sold off in the 1980’s!).

With the challenges ahead, with the ‘B’ word (that’s budget if you wondered!), house price inflation will be tempered over the coming five years in Huddersfield. As I have discussed in previous articles, the number of properties on the market in Huddersfield remains close to historic lows, which is both good as it keeps houses prices relatively stable, yet not so good as it impedes choice for buyers… and hence why I believe property values in Huddersfield will only be 16% higher in five years’ time.

Whilst on the other side of the coin, with the challenges facing landlords and the significant shortage of new homes being built, Huddersfield people still need somewhere to live. If those people aren’t buying houses and the local authority aren’t building council houses in there thousands (because they have no money), with the average rent for a Huddersfield rental property currently standing at £763 per month …

Over the next five years, I predict the average rent

in Huddersfield will rise to £931 per month

These are interesting times. There is still money to be made in buy to let in Huddersfield – Huddersfield landlords will just need to be smarter and more savvy with their investments. If you are looking for such advice and opinion to help you meet those investment goals, one place you can find more information is the Huddersfield Property Blog https://huddersfieldproperty.blogspot.co.uk/