Huddersfield Property Market – Asking Prices Up 1.5% in the Last 12 Months

The average asking price of property in Huddersfield increased by 1.5% or £2,383 compared to a year ago, with particularly good demand from landlords and home-movers in the first few months of the year. This takes the current average asking price to £166,616, compared with £164,233 this time last year.

The rise in asking prices is being aggravated by buyers jumping into action looking to benefit from potential stamp duty savings (especially first-time buyers) or beat impending mortgage interest rate rises later in 2018. Of the numerous Huddersfield buyers starting their property hunting in the usually active spring market this year, many face paying even more than ever for the property of their dreams, and as I mentioned a few weeks ago, there are less properties for sale in Huddersfield compared to 12 months ago.

Looking at the different sectors of the Huddersfield property market, splitting it down into property types, one can see what is happening to each sector of the market with regard to their average asking prices now compared to a year ago. Firstly, looking at the Pound note amounts …

Interestingly, when one looks at the percentages, the most upward average asking price pressure is in the semi-detached property type sectors.

Now, I must stress this growth in the asking prices of Huddersfield property doesn’t mean the value of Huddersfield property is going up by the same amount ... nothing could be further from the truth.  Only time will tell if the current levels of Huddersfield asking prices is a catch-up abnormality after a couple of months of restrained asking price rises in the first few months of 2018, or is it an initial sign that we are in for a better 2018 Huddersfield Property market than all of us were expecting at the start of the year? 

I believe these asking prices must be viewed with a pinch of salt, as it will be fascinating to see whether Huddersfield properties actually sell at these higher asking prices. Just because house sellers (be they owner-occupiers or landlords liquidating their assets) are asking for more money it doesn’t mean buyers will be enthusiastic to part with their hard earned cash. Like my Mum and Dad used to say to me all those years ago, “You can ask ... but you might not get”.

Also, Huddersfield homeowners and landlords wanting to sell their property need to be aware of progressively strained buyer mortgage affordability and the more those sellers increase asking prices, the more buyers will hit their maximum on the amount they are able borrow on a mortgage.

However, those Huddersfield buyers who need a mortgage (be they owner-occupier or landlord), will paradoxically benefit from lower mortgage payments before interest rates rise … maybe another reason for the uplift in the number first time buyers and landlords buying? Only time will tell!

£841 pcm – The Average Huddersfield Rent

The rents paid by Huddersfield tenants are now standing at £841 per calendar month (PCM), a rise of 1.40% year on year and 0.33% lower month on month.

However, this attention-grabbing monthly rent figure masks stark differences in the various different parts of the Huddersfield rental market.  Demand in Huddersfield for high quality family homes with two or three bedrooms in good catchment areas for schools remains really robust due to tenants wanting access to the schools.  Other influencing factors that make certain areas popular are the proximity to transport links. However, I have noticed a drop in demand (and thus rents achieved) for property where the landlord hasn’t kept the property fresh; in terms of decoration, carpets, replacement windows and poor heating.

So, what does all this mean for Huddersfield landlords and tenants?

With the new tax rules for landlords, many believed that the number of rental properties would narrow throughout 2017, as landlords sold up their Buy to let properties and looked to invest their money elsewhere, but evidently this hasn’t happened (yet).  Feasibly Huddersfield landlords are re-mortgaging their Huddersfield buy to let properties instead, as they still believe it’s a safer investment than looking, say at the stock market?
However, demand remained strong in 2017 for Huddersfield private rental properties, meaning the rents being achieved were at a decent level for landlords. Keeping your outgoings low is also an important consideration and so I looked on a well-known financial services comparison site this morning and found a High Street bank offering a 5-year fixed rate for Buy to let landlords with a 40% deposit/equity for 2.17% … I can remember (as I am sure many of my readers of this blog can) when mortgage rates were at 15% - this is cheap money!

Looking at property values in Huddersfield, over the last 12 months and specifically at the lower of the market where buy to let landlords tend to buy their rental properties.  Flats/apartments have risen in value by 4.37% whilst terraced properties have risen by 4.23%.

Some Huddersfield landlords have seen the yields they are achieving remain squeezed.

However, most landlords can start to feel assured that as capital growth in Huddersfield remains at a more realistic figure (good for long term stability in the property market) and long-term rents are on the rise, the overall corresponding annual return on investment (Annual ROI being annual capital + annual yield) has stabilised in all areas and is now starting to grow.

With additional people seeing renting as a long-term option, even with the challenges of the new tax regime, Huddersfield landlords, with the support of a good advice and opinion, should continue to see renting as a good investment vehicle.

Huddersfield Millennials Have Spent £117,556 On Rent By The Age of 35

The Millennials were born between the mid 1980’s and late 1990’s thus making them between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters who grew up with the newest tech and computers and who are huge aficionados of music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as Generation Rent, many Millennials have discovered that renting is a good choice for their shelter and accommodation needs without the hassle that comes from buying a home. Nonetheless, that is not the only reason they don’t buy property. When they should be concentrating on their profession, putting down roots and starting a family, Millennials are still going through the pressure and strain of student loan liabilities whilst, at the same time, finding it tough to pay rent.

The hot topic at the moment is the cost of renting, as both political parties have seen mileage in wooing these Millennial Generation Renters. The average rent in Huddersfield is currently £816 per month making this a big-ticket item on the monthly budget. I was inquisitive to find out exactly how much Huddersfield Millennials will spend on rent by the time they reach their mid 30’s. The average age people leave home in the UK is 22; so looking at a Huddersfield 22-year-old (or Millennial) who left home in 2005 then between 2005 and today that Huddersfield Millennial will have shelled out £117,556 in rent.

It’s no wonder local Millennials can’t afford to buy a Huddersfield home given their tremendous debt. This means younger Huddersfield Millennials will probably carry on renting for the foreseeable future, simply because the prospect of buying a home is not yet achievable.. that is until you look more deeply at the numbers…

Looking at the chart above, the average rent of a Huddersfield property in 2005 was £684 per month (pm)  … if it had risen by inflation, today, that would be £964 pm. As I have already mentioned in the article, today it only stands at £816 per month. Looking over the last 12 years, adding up all the differences between what the average actual rent was compared to what it should have been if rent had gone up by inflation, the average Huddersfield Millennial tenant would have paid £129,374.

This means that an average 35-year-old Huddersfield Millennial tenant, who has been renting since 2005, is better off by £11,818 when comparing the actual rent paid compared to what it would have been if it had risen by inflation. In a nutshell, tenants have done well due to the sub-inflation growth in rents.

In fact, if you recall I mentioned in an article a few weeks ago, the older Huddersfield Millennials are starting to use those savings and are gradually shifting towards home ownership. They are finally catching up with the British homeownership dream as Bank of Mum and Dad help with the deposit. Also, the scrapping of Stamp Duty from the Government starts to kick in together with the realisation that if the 5% mortgage deposit can be scrapped together (yes, 95% first time buyer mortgages have been available since 2009), it is still a lot cheaper to buy than rent, meaning this will unquestionably drive demand for Huddersfield homes for sale – good news for Huddersfield homeowners.

… and what does this mean for Huddersfield landlords?

Well the vast majority of younger Millennials are still renters and I foresee this to be the case for at least the next ten to fifteen years. Landlords will need to keep improving their properties to ensure they get the best tenants and they will see a much higher rent achieved. Millennials will pay top dollar for a top dollar property. It is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … because as I promised a few weeks ago, the first rule of Buy To Let Investment ….. “You are not going to live in the property yourself”

Huddersfield Property Market – Which Houses are Actually Selling?

Beast from the East, Russia, Facebook, Brexit, Trump, House prices up, House prices down ... the Press is full of column inches on Brit’s favourite subjects of politics, scandal, weather and not forgetting (and I appreciate the irony of this!) the property market. As an agent belonging a national group of letting and estate agents, talking to my fellow property professionals from around the UK, the one thing that is immediately apparent is the UK does not have one property market. It is a hodgepodge patchwork (almost like a fly’s eye) of lots of small property markets all performing in different ways.  

… And that made me think … is there just one Huddersfield Property Market or many?

I like to keep an eye on the property market in Huddersfield on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Huddersfield, be that a buy-to-let property for a Huddersfield landlord or an owner occupier house for a home owner.  So, I thought, how could I scientifically split the Huddersfield housing market into segments, so I could see which part of the market was performing the best and the worst.

I decided the best way was to split the Huddersfield property market into four equal size price bands (into terms of households for sale). Each price band would have around 25% of the property in Huddersfield, from the lowest in value (the Lowest Quartile or 25%) all the way through to the highest 25% in terms of value, the Upper Quartile.  Looking at the market, I have calculated that these are the price bands in Huddersfield are as follows:

·         Lowest Quartile (lowest 25% in terms of value) … Up to £110,000

·         Lower/Middle Quartile (25% to 50% Quartile in terms of value) ...  £110,000 to £160,000

·         Middle/Upper Quartile (50% to 75% Quartile in terms of value) ... £160,000 to £260,000

·         Upper Quartile (highest 25% in terms of value) ... £260,000 Upwards

So, having split the Huddersfield Property Market approximately into four equal sizes, the results in terms what price band has sold (subject to contract or stc) the most is quite enlightening -

Huddersfield	Available	Sold STC	% Sold
Up to £110,000	357	214	37.5%
£110,000 to £160,000	329	279	45.9%
£160,000 to £260,000	346	218	38.7%
£260,000 Upwards	380	165	30.3%

The best performing price range in Huddersfield is the middle market. As I would expect, the upper quartile (the top 25%) is finding things tough. Interestingly for Huddersfield landlords, the lower market is also selling well, meaning there are plenty of Huddersfield landlords buying properties to add to their buy to let portfolios. Even though the number of first time buyers did increase in 2017, it was from a low base and the vast majority of 20 something’s cannot buy, so need a roof over their head (hence the need to rent somewhere).

It is a fact that British (and Huddersfield’s) housing markets have ridden the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008. No matter what happens to us Brexit or anything else ... unless the Government starts to build hundreds of thousands extra houses each year, demand will always outstrip supply … so maybe a time for Huddersfield landlord investors to bag a bargain?

Want to know where those Huddersfield buy to let bargains are?  Follow my Huddersfield Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Huddersfield, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts ... would you?

20% Less Huddersfield Home Owners Wanting to Move Than 12 Months Ago

As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Huddersfield and the surrounding area to keep up with demand for homes to live in (be that tenants or homebuyers), it’s worrying to note that less Huddersfield home sellers are putting their properties on to the market than a year ago… or is it a worry?

At the start of 2007, there were 868 properties for sale in Huddersfield, but by September 2008, when the credit crunch was really beginning to bite, that number had risen to 1,318 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.

Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) … prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Huddersfield property between the end of 2007 and Spring 2009.

However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Huddersfield property prices have remained robust.  A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties.

Around the UK, over 85% of towns in the UK have seen an increase in the number of properties for sale from a year ago, stunting their local property markets. However, there were 677 properties for sale 12 months ago, and today that stands at 540, meaning there are 20% less properties for sale in Huddersfield today than a year ago, meaning the property market is holding its own locally.

   

Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Huddersfield say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Huddersfield house buyers and those potential FTB house buyers, I do foresee the Huddersfield Property Market will show steady yet sustained improvement during the first half of 2018.

What does this mean for Huddersfield landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true demand amongst FTB’s is increasing, albeit from a low base, so that will play a small factor in demand. Even with the new landlord tax rules, buy to let in Huddersfield still looks a good investment, providing Huddersfield landlords with a good income at a time of low interest rates and a roller coaster stock market.

If you are thinking of investing in bricks and mortar in Huddersfield, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a fewer number of properties on the market .. comes less choice. Don’t buy the first thing you see, buy with your head as well as your heart … and don’t forget the first rule of Buy To Let Investment …..

I will tell you that 1^st rule in a couple of weeks!