What Will Happen to Huddersfield House Prices in 2022?

Traditionally, if you had not sold your Huddersfield home by the first week in November, you would normally have to wait for the house sellers to return in the famous Boxing Day rush on the portals (Rightmove, Zoopla etc) to get potential buyers interested.

 

Yet matters have been different this year as the various lockdowns have caused a surge in house buying right up until when the Christmas edition of the Radio Times goes on sale.

 

So, the question is, how will 2022 look regarding the Huddersfield property market?

 

The last couple of years in the Huddersfield property market have been different in many ways. So much so, many Huddersfield homeowners are presently deliberating whether they should put their Huddersfield home on the market in January or wait until later in the summer.

 

Speaking to many Huddersfield buyers and sellers, (and in fact Huddersfield buy-to-let landlords) in the last couple of weeks in the run-up to Christmas, many were asking the very same question.

 

What is going to happen to Huddersfield house prices in 2022?

 

Some people asking this question are Huddersfield buyers troubling themselves that they are about to buy their Huddersfield home just before a potential property crash, yet others are Huddersfield homeowners wanting to know where the top of the market is before they sell. Even a handful of Huddersfield landlords unable to either start buying or start selling some of their rental portfolio.

 

Therefore, let’s see what has happened in 2021 to make a better judgement of what should happen in 2022.

 

Nobody has a crystal ball that can tell what 2022 holds, however most property experts are not forecasting doom and gloom for the British property market.

 

Whilst the final numbers won’t be known until Easter 2022, it is estimated that in 2021 one in fifteen privately owned homes in the UK are expected to have changed hands, being the busiest year in the last 14 years. Locally,

 

1,715 properties have changed hands

in the last year in Huddersfield

 

Although that is only up to October 2021, so numbers will be much higher once all the final counts are in by March/April.

 

The pandemic made many Huddersfield families re-evaluate what they wanted from their Huddersfield home, with many wanting bigger rooms (and more of them). Many in the press dubbed this ‘the race for space’, meaning the property market was flooded with home buyers, most bringing forward the home move they had planned between now and 2025.

The issue was, there weren’t enough Huddersfield properties on the market to satisfy every Huddersfield buyer, meaning Huddersfield house prices have unsurprisingly been driven up.

 

The average price of a home today in Huddersfield is £205,230

 

Although it is still premature to say what will happen in 2022, most property commentators seem assured that we are not heading towards a house price crash, mainly due to one reason.

 

There aren’t enough properties on the market in Huddersfield. Simply supply and demands economics!

 

The property crash in 2008 was caused by everyone dumping their property on the market.

 

In January 2007, there were 868 properties for sale in Huddersfield, one year later in January 2008, that had risen to 1,521 properties, whilst today, that stands at 331

 

And I can’t see that changing for 2022.

 

In 2007, mortgage interest rates were 6.5% to 7.5%, so when the economy started to falter, everyone looked to sell their homes to reduce their outgoings as unemployment rose by over 60% in just a couple of years. This time round most people have mortgage rates of around 2% to 2.5% and unemployment is dropping, meaning they don’t need to sell their Huddersfield home.

 

Now of course the stamp duty holiday came to an end months ago, and Bank of England base interest rates are expected to rise moderately in the coming year, yet not to the level they were in 2007 (5.75%).

 

Nonetheless, demand for Huddersfield homes will still be there. I have even read some reports suggesting that more than 20% of British households are seriously thinking of moving between now and the summer of 2023, and this will support Huddersfield house prices whilst demand continues to exceed supply.

 

Huddersfield house prices will be 4.2% higher by the end of 2022

 

Another reason why I believe that will be the case is the return to home working. If, as a country, we will need to work from home each winter for the foreseeable future because of new variants, then this will cement the need for people wanting to move home for remote working. 

 

It might be that Huddersfield buyers are looking for a dedicated office at home or that they feel they now no longer need to be in large built-up areas that are near to their work. 

 

This increase in Huddersfield house prices is expected to entice even more Huddersfield house sellers onto the market, which will steady Huddersfield house prices slightly (as supply increases), yet I still believe there won’t be enough properties coming onto the market to satisfy the colossal demand.

 

What about the Huddersfield rental market?

 

Rents tend to grow in line with tenants’ wages. So, with many people getting decent pay rises and not enough properties being built, many economists are suggesting rents will be 14% to 19% higher by 2027. Even with the house price growth, the numbers for rental investments still look rosy.

 

Is it the right time to buy your first property in Huddersfield?

 

This rise in Huddersfield house prices has had many people asking whether 2022 is the right time to buy their first home? Should they buy now before Huddersfield prices rocket even further or delay in the hope that house prices come back down? 

 

As with any important decision in life, this will mainly depend on your own personal life and your motives for wanting to move. 

 

If the Huddersfield home that you want to buy is on the market, available and you can afford the mortgage, then delaying could be detrimental. It’s like holding off for the ‘next generation TV’, it then coming out; then just as you are about to buy the TV, the next ‘next generation TV’ gets announced for six months’ time ... and the cycle is constantly in motion – so you end up never buying a TV … just like you will never buy your own home!

 

Buying property is a long-term game

 

Sometimes you just have to make your decision, get something bought and start the journey of the next 25 to 35 years of living in your family home whilst paying off your mortgage.

 

The present low interest rates for first-time buyers means that there are some very low mortgage deals available for those with a decent deposit, making it a good time to buy a Huddersfield property, especially if you fix the interest rate.

 

If your deposit is humbler, the Government’s 5% deposit mortgage guarantee scheme will still enable you to buy a property, albeit at a slightly higher interest rate.

 

Looking at the bigger picture, these are only my opinions. If inflation doesn’t get too out of hand and interest rates don’t go above 2% to 3%, it looks like Huddersfield house prices will, for 2022 and a few years beyond, continue upwards albeit with a slower trajectory than 2020/21 and probably with a few short, sharp up and down spikes on the way.

 

The bottom line is, ensure that any Huddersfield house move that you intend to make is something that you can afford, allow for future rises in interest rates and make plans for as many eventualities as possible. Do that, and you should be just fine.

 

These are my opinions – what are yours?

 

 

Should Huddersfield Landlords Be Worried About These New Rental Regulations?

Everyone should be doing their bit to help reduce the UK’s carbon footprint on the globe – yet the question is, is that burden being put too much on the shoulders of Huddersfield landlords with potential bills of £7,600+ in the next four years?

The background - the UK has obligated itself to a legally binding target to be carbon neutral by 2050. One of the biggest producers of greenhouse gasses is residential homes. 

To hit that carbon-neutral target (as one-fifth of the UK's carbon output comes from residential property), every UK home will need to achieve a minimum grade of ‘C’ on their Energy Performance Certificate (EPC) by 2035. Each EPC has a rating between ‘A’ and ‘G’ - 'A' being the best energy rating and 'G' the worst – like an energy rating on a fridge or washing machine.

All UK rental properties have required an EPC. Yet, from April 2020, the Minimum Energy Efficiency Standards (MEES) regulations have required all private rental properties (including rental renewals) to have a minimum EPC rating of ‘E’ or above. 

Yet new legislation being discussed by the Government’s Climate Change Committee has suggested that landlords should play their part and increase the energy efficiency of their private rented homes. Sounds fair until you dive into the details.

The Government is muting the idea that all new tenancies (i.e. when a new tenant moves in) in private rented properties should be at an EPC rating of 'C' or above by 2025 (and all existing tenancies by 2028). The issue is…

69.86% of all private rented properties in Kirklees have an EPC rating of ‘D’ or below.

The problem is some Huddersfield landlords will find it very expensive, neigh impossible, to improve the energy efficiency of their Huddersfield rented properties, especially those Huddersfield landlords who hold older housing stock such as terraced properties built in the 1800s. These Victorian terraced houses never perform well on EPC ratings as they have solid walls.

Now, of course, you can improve the EPC rating of a terraced house by improving roof insulation, boiler replacement, solar heating, and high-grade uPVC windows. Yet, with some terraced houses, there will come the point where you will be unable to get to the haloed 'C' rating without installing external or internal wall insulation, sometimes even floor insulation.

With wall insulation costing between £5k and £15k and floor insulation around £5k…

the bill to improve all the private rented

properties in Kirklees will be a minimum of £102,460,040.

But before I talk about what the options are for Huddersfield landlords, here’s the weird part of EPC’s. An EPC rating is calculated on the cost of running a property and not the carbon output or energy efficiency, despite its name.

My advice to Huddersfield landlords - although it’s correct to create a future strategy, all I can say at this point is 'more haste less speed'. These rule changes are only a discussion paper, and it remains open for consultation by any member of the British public until 30th December 2021. That means the Government's strategies and tactics may change. 

Given that 57% of private rented properties are below a ‘C’ EPC grade, it is hard to believe the Government could achieve this without making big cash grants available.

For example, there is presently a cap of £3,500 for energy improvements that Huddersfield landlords have to spend to get it to the existing EPC ‘E’ target grade on private rented homes (i.e. if you have a privately rented home at an 'F' or 'G' EPC rating, you only need to spend a maximum of £3,500 as a landlord on improving your EPC rating and still being legal even if those £3,500 don't get you to the current 'E' rating minimum). So, if the current rules allow an exemption to the EPC renting rules, if a Huddersfield landlord can’t improve their Huddersfield property enough, conceivably, could this be extended?

So, what are Huddersfield landlord’s options?

One thing you could do is put your head in the sand and hope it all goes away!

Another thing some savvy Huddersfield landlords do (be they my client, clients of other letting agents in Huddersfield or even self-managing landlords) is to sit down and plan a strategy for their Huddersfield rental portfolio. I print off all the EPCs of their rental portfolio, look at the recommendations, then discuss a plan to ensure they are covered whatever the Government decides to make the new EPC rules. Like all things in life, plan for the worse and hope for the best.

If your agent isn't offering that service, please drop me a line because I would hate for you to miss out on the advice and opinion that so many Huddersfield landlords have already had from me. The choice is yours.

With Brighouse Tenants Deposits Totalling £1,726,563, how will ‘Lifetime Deposits’ Change the Brighouse Rental Market?

The Government’s scheduled publication of their White Paper for the Renter's Reform Bill, which incorporates proposals to forbid Section 21 evictions and introduce ‘Lifetime Deposits’, has been suspended until 2022.

 

The additional time is required to give a chance to create a level playing field to reforms for both landlords and tenants in the private rented sector in England.

 

In this article, I want to look at these lifetime deposits. How could the Lifetime Deposit Scheme work, and how could they benefit both Brighouse landlords and Brighouse tenants?

 

When a tenant moves between rented homes, they need the deposit for their new home before being released from their old home.

 

The average deposit for a Brighouse rented

home stands at £813.

 

This means finding that amount of money at the time of moving home can be difficult for many tenants; thus, they become stuck in their existing rental.

 

Therefore, Westminster wants to propose in this White Paper a new deposit choice for tenants. A deposit is transferred from the old landlord (letting agent) to the new landlord (letting agent), thus making life simpler as the tenant doesn't need to save for an additional new deposit every time they move home.

 

Now, of course, it's vital that any new ‘deposit scheme’ does not dissuade Brighouse landlords from making valid claims for damage to properties. Landlords cannot be expected to give up their right of recourse to a security deposit until such time that they are satisfied there will be no need to claim it.  

 

So how would Lifetime Deposits work?

 

There would need to be some form of system safeguarding that the new Brighouse landlord is protected by a whole deposit, even if the deposit on the old Brighouse home comes into dispute.

 

This will be critical and central to Brighouse landlords having conviction in the Lifetime Deposit Scheme. That could be something like an interest-free loan for the tenant on the crossover between the properties.

 

Another advantage to the scheme is that ‘lifetime deposits’ could be used for tenants to build a deposit for a house for the future.

 

What about the existing system of deposits?

 

The rules regarding the amount of deposit held by a Brighouse landlord were changed a couple of years ago, where only five weeks’ worth of rent can be held as a deposit.

 

The deposits Brighouse tenants have had to save for certainly raises the cost of renting a Brighouse home.

 

Some say this extra burden puts another nail in the coffin of the dream of homeownership for many Brighouse renters. To give you an idea of the level of deposits held for Brighouse rental properties…

 

The total of all the tenants’

deposits in Brighouse is £1,726,563.

 

Yet the other side of the argument contends that if the Brighouse tenant misses more than one month’s worth of rent, the landlord is immediately out of pocket, even before they’ve got the costs of solicitor and any improvement works from the tenant trashing the place.

 

Does a deposit of just over one month provide Brighouse landlords with a decent level of protection against unpaid rent or damage to the property? When you consider…

 

The total value of all the privately rented properties

in Brighouse is £406,482,750.

 

Before I conclude my thoughts to the initial question of ‘lifetime deposits’, the need for decent landlord insurance to ensure you are adequately covered as a Brighouse landlord is vital.

 

So, what are my thoughts on ‘Lifetime Deposits’?

 

It is my opinion the common need for Brighouse tenants to stump up a ‘two-fold deposit’ is not helping many Brighouse renters when it comes to moving home. It’s clear the standard cash down deposit is not fit for purpose for the 21st Century.

 

One might suggest the Government’s quest for the ‘lifetime deposit’ could open the door to other deposit alternatives that have come onto the market for tenants in the last few years.

 

Some landlords don’t require a deposit yet are compensated by asking the tenant to pay a higher rent to cover the risk. Also, there are companies that offer insurance backed deposits where the tenant pays one week's rent to an insurance firm, and the insurance firm pays out if a loss is incurred by the landlord.

 

Interestingly, other countries are already offering deposit loans and guarantee schemes. Could this be something for the British Government to contemplate?

 

We must wait until at least the spring of 2022 for the Renter’s Reform White Paper to be published. Then every stakeholder involved (tenants, landlords and agents, et cetera) can look at it in the cold light of day and decide how this will affect the way they view the landlord/tenant/agent relationship.

 

Many will say the bigger issue isn’t ‘Lifetime Deposits’ in the White Paper, but the removal of no-fault Section 21 evictions. The removal of Section 21 is something the current Government have pledged to bring in during this parliamentary cycle (i.e. before Q4 2024). 

 

I am not concerned about removing no-fault Section 21 evictions, but what will replace it to ensure there is suitable redress for landlords if the tenant doesn't pay the rent?

 

Of course, a handful of Brighouse landlords will decide to sell their rental portfolio because of the White Paper. The same happened in 2016 when the increase in landlord taxes were announced. 

 

However, this will reduce the supply and availability of Brighouse rental properties, meaning rents will rise (classic textbook supply and demand), thus, landlords return and yields will rise.

 

Yet, because tenants still can’t afford to save the deposit for a home and we are all living longer, the demand for rental properties across Brighouse will continue to grow in the next twenty to thirty years. The reason being we are still not building enough homes to accommodate our growing and ageing population. This means we will turn to more European ways where the norm is to rent rather than buy in their 20s and 30's.

 

This means new buy-to-let landlords will be attracted into the market, buy properties for the rental market in Brighouse and enjoy those higher yields and returns. Isn't it interesting that things mostly always go full circle?

Is the Huddersfield Property Market Running Out of Steam?

In recent articles on the Huddersfield property market, I have been talking a lot about house prices over the last 12 months and 5 years in Huddersfield.  

 

When it comes to newspapers talking about the property market, the headline most people look at is what is happening to house prices.

 

However, as 2 in 3 (65.1%) of Huddersfield home sellers are also home buyers, the price is almost irrelevant. Let me explain.

 

If your property has gone down in value – the one you want to buy has also gone down in value – so you are no better or worse off (and if you are moving up market – which most people do when they move home – in a suppressed property market the gap between what yours is worth and what you will buy gets lower … meaning you will be better off).

 

Many property commentators (including myself) consider a better measure of the health of the property market is the transaction numbers (i.e. the number of people selling and buying).

 

Let’s take a look at the numbers for Kirklees as a whole (including Huddersfield).

 

The average number of properties sold in Q1 (Jan/Feb/March) between 2008 and 2020 was 379 properties per month, whilst Q1 in 2021 saw 532 properties sell on average per month (boosted by the March stats where an eye watering 668 homes sold). This meant …

 

40.5% more houses sold in the Huddersfield area in Q1 2021

than the 14-year average

 

The average number of properties in Q2 (April/May/June) between 2008 and 2020 was 415 properties per month, whilst Q2 in 2021 saw only 338 properties sell on average per month, meaning …

 

18.6% less houses sold in the Huddersfield area in Q2 2021

than the 14-year average

 

Finally, whilst the exact stats for Q3 2021 for our local authority won’t be published by the Land Registry for a couple of months, I can make certain calculated assumptions from the national data published by HMRC. The number of property sales for our local authority area in Q3 (July/August/September) between 2008 and 2020 was on average 466 properties per month. However, using the HMRC data, I calculate there will only be 368 properties sold on average per month in Q3 2021. This means …

 

 

20.9% less houses sold in the Huddersfield area in Q3 2021

than the 14-year average

 

One of the two main drivers of activity in the housing market in the latter half of 2020 (meaning Q1 figures were better than the long-term average) was the battle for space, with many Huddersfield buyers seeking larger properties to work from home. The second was the short-lived tax relief measures such as the cut to Stamp Duty Tax meaning property prices were at an all-time high.

 

But what also might surprise you is the number of people buying for the first time.

 

1 in 4 mortgages since lockdown have been

for first-time buyers (25.12%)

 

Huddersfield first-time buyers, buoyed by parental help with their deposits, the Government’s 5% deposit mortgage and ultra-low borrowing costs, have also helped to push house price growth since the start of 2021. In fact, if you split down house price growth between second time (third time etc) buyers and first-time buyers, the national annual house price inflation for first-time buyers is 9.2% compared to 8.1% for the second or third etc buyers. 

 

Yet, the Q2 and Q3 2021 Huddersfield property market was worse than the long-term Huddersfield average (in terms of property transactions)

 

The question is – should we be worried?

 

The UK economy continues to deliver a benevolent framework to the British housing market. 

 

The labour market has outstripped expectations with the millions expected to join the dole queue at the end of furlough failing to materialise and with the number of job vacancies on the rise.

 

Of course (and I mentioned a lot in my recent posts), the Bank of England is projected to increase interest rates to dampen inflation in the coming months, with further small rises predicted over 2022, so I do expect the demand for property to cool off as mortgage borrowing costs increase. 

 

Normally such rises in mortgage costs would mean less property would sell, yet nothing over the last couple of years has been normal.

 

Many Huddersfield property homeowners have held back putting their property on the market in the last 6 months because they were afraid, they would sell their own home but not find another to buy – thus making them homeless (nothing could be further from the truth – yet that is what a lot of people incorrectly believe).

If the Huddersfield property market slows and interest rates rise, mortgage costs will still be very low by historical standards.

 

Also, if the obstacle of raising the 5% deposit can be overcome by first-time buyers plus a confidence that existing homeowners won’t be made homeless because of a cooling property market, many more people could be tempted to enter the property market by placing their property for sale first …

 

… thus opening up the market to more buyers – which in turn will drive up transaction numbers back to their normal 14-year average. However, raising a deposit is likely to remain the primary obstacle for many.

 

If you are a Huddersfield homeowner or first-time buyer and want my thoughts on the future, then please do drop me a line.

 

2022 is going to be an interesting year ahead for the Huddersfield property market – only time will tell if this will be a brief respite or is it running out of steam?

 

Please tell me your thoughts on what you think will happen.

Would You Re-mortgage Your Huddersfield Home to Help Your Child Onto the Property Ladder?

 How far would you go to help your child get on in the world?

 

Many Huddersfield parents move area to ensure their child gets into the best primary school or fund their university costs. Many of you reading this have even helped your children with the deposit for their first home from savings.

 

However, I have come across many Huddersfield people in their 50’s and 60’s who have good jobs and incomes, yet don’t have the savings to give to their children to help them buy their first home. It doesn’t help when you consider…

 

the average value of a Huddersfield home has risen by 20.4% in the last 5 years, from £157,980 to £190,179.

 

I am therefore seeing increasing numbers of parents who are willing to re-mortgage their own Huddersfield home or start a new mortgage (when they own their Huddersfield home outright) — to get their children onto the Huddersfield property ladder.

 

So, whilst the Government is trying to turn Britain’s 20 and 30 somethings from ‘Generation Rent’ into ‘Generation Buy’, the Bank of Mum and Dad are mortgaging their retirement to pay for it all. Yet it need not be cost prohibitive borrowing the deposit as you still have access to interest only mortgages.

 

With an interest only mortgage, your monthly mortgage payment covers only the interest on your mortgage, not any of the original capital borrowed. This means your mortgage payments will be lower than on a repayment mortgage, remembering though at the end of the term you will still owe the original amount you borrowed from the mortgage provider.

 

1 in 14 new mortgages are interest only and 1 in 5.5 existing mortgages are interest only mortgages, they are very popular.

 

Anyway, many Huddersfield homeowners might be worried about having that level of debt in their golden years. However, many plan to pay off the mortgage when they downsize as they get into their 60’s and 70’s.

 

I talk to many Huddersfield homeowners, who are asset rich but cash poor and desire to help their children onto the Huddersfield property ladder. Their attitude is their children will inherit their property when they pass away, so it seems practical to give them that money to work harder for them earlier in their life when they need it to buy their first home.

 

Can you get a mortgage, even if you are retired?

 

A lot is dependent upon your age and financial position. The mortgage companies will see if you have adequate funds for your retirement and emergencies plus leaving enough equity in the property to enable you to downsize in the future. Like all things, you need to take advice from a qualified mortgage arranger.

 

So, that then begs the question, is there enough equity in Huddersfield homes to borrow against?

 

In the late 1980s and again in the early 2000s, many Brits saw their homes as a cash machine. Numerous homeowners re-mortgaging at the end of their mortgage’s preliminary term (usually after the initial 2, 3 or 5 years), but when doing so increased their mortgage to enable them to buy a nice car or fancy holiday. Yet, by increasing the borrowing, it created negative equity in the early 1990s and stopped many homeowners moving home between 2009 and 2013 because of their lack of equity.

 

Therefore, I have to ask, have we borrowed too much this time round?

 

Looking at Huddersfield and the specific postcodes HD1 to HD5, HD7 and HD8 combined...

 

In 2016, the average Huddersfield homeowner had a mortgage of £72,203 and today it is £77,148, a rise of £4,945.

 

Looking at these numbers, one might think we are again over-extending ourselves, yet as regular readers of my blog about the Huddersfield property market will know – I like to drill down and look at all the figures.

 

Initially, I was worried about these stats, until I considered the equity Huddersfield people have amassed over the same 5 years.

 

In 2016, the average equity held in a Huddersfield homeowner’s property (whilst still having a mortgage) was £85,777, yet today that stands at £113,031, a rise of £27,254.

 

Even though mortgages have increased, Huddersfield homeowner’s equity has risen even more, meaning as we stand today, mortgaged and owned-outright properties, there is…

 

£13,835,956,687 of equity held in all Huddersfield homes.

 

Whilst the total value of mortgages has increased slightly since 2016, as a percentage, this has gone down meaning Huddersfield homeowners and Huddersfield landlords have increased their equity in the last five years.

 

It can quite clearly be seen that the financial insecurity sparked by the Credit Crunch crisis of 2008/9 has created a generation of Huddersfield homeowners and landlords who are savers and improvers rather than movers and excessive borrowers, using excess cash to invest in their property and pay down debt or to excessively borrow on their equity growth.

 

Only 16.05% of the total value of Huddersfield property

is borrowed money with a mortgage.

 

This is great news for every Huddersfield homeowner and Huddersfield landlord because irrespective of whether the ‘Post Lockdown Bounce’ is short or long-lived, it shows the Huddersfield property market is in a better state to ride out any storm that it might encounter than ever before because less people will be in negative equity or have prohibitively high mortgages.

 

Before I finish, I fully appreciate money and inheritance is a sensitive subject for many families.

 

My message to all the Huddersfield parents is, just because your children aren’t talking about the subject, it doesn’t mean it’s not on their mind.

 

The lead has to come from you, as a Huddersfield parent to ensure the wealth held in your bricks and mortar can be used to your family’s advantage, when they need it most.

 

If you do, your children will thank you for it and they may even do exactly the same for their children, then, they will do the same for their children’s children ... creating a legacy that will go on for generations.

Are Huddersfield House Prices Set to Fall this Autumn?

 The stamp duty holiday is over, furlough finished at the end of September, unemployment is due to rise and inflation is rife … is this the end of the post lockdown Huddersfield property boom?

 

Surely, we are heading for house price correction?

 

Forecasting what will happen in the Huddersfield property market this autumn may not be as simple as it first appears.

 

It’s true the Huddersfield property market is starting to settle down after an all-time number of property deals were completed in June.

 

More Huddersfield people will have moved home in 2021 than in any year since 2007, with an estimated 1.5 million home buyers nationally having bought a property.

 

Roll the clock back to last Christmas, and the Government’s Office for Budget Responsibility, projected that national house prices would drop between 6% and 8%.

 

By Christmas, the price of an average home

in Huddersfield will be about £199,300,

up 4.9% on last Christmas.

 

Let us not forget there were so many ambiguities at the start of 2021. We were about to start a 5-month lockdown, hospitals were bursting at the seams with patients, the vaccines hadn’t started, 4 in 10 employers had furloughed their staff and we had just had Brexit ... things didn’t look good.

 

Yet, nothing could be further from the truth 10 months later – the Huddersfield property market has been on fire. But after a heated summer in the Huddersfield property market, things certainly can’t carry on as they have been since the end of lockdown.

 

So, where are we with the Huddersfield property market as it stands? Taking reference from historical data on the website The Advisory (I would certainly recommend you check it out) …

 

68% of properties on the market today in Huddersfield

are sold subject to contract (stc).

 

How does this compare to October 2019 and October 2017?

 

In October 2017, 36% of Huddersfield properties were sold stc,

 whilst in October 2019, 35% of properties were sold stc.

 

Yet how does that compare to the national picture?

 

In 2017, 39.72% of the country’s properties for sale were sold stc whilst in 2019, that figure was 38.11%.

 

Now I love a good league table, so then decided to compare our locality to the rest of the country.

So, I chose to look at the HD7 postcode specifically. For information, there are 2,234 postcode districts in the country.

 

The 2021 sold stats put HD7 in at 365^th place in

the country, 986^th in 2017 and 1,346^th in 2019

… meaning we have improved from the 2017 and 2019 figures.

 

As we enter the last 3 months of the year, there are not so many uncertainties as there were at the start of 2021. On the good news front, 49 million Brits have had at least one jab (45m two jabs) and the UK will be the world’s fastest growing advanced economy this year according to the IMF.

 

Conversely, the furlough scheme ended at the end of September and with energy prices going through the roof, a real shortage of homes for sale (as I have discussed a number of times in recent blogs) and rising inflation on the back of a shortage of raw materials and trained staff, forecasting this and what will happen to Huddersfield house prices might not be as easy as it seems.

 

Post stamp duty holiday, it is now recognised that the majority of the demand for people moving home is focused by a profound unhappiness and frustration with the homes we live in, revealed during the first lockdown in 2020.

 

Buyers (and tenants – so take note Huddersfield buy-to-let landlords) want space ... in fact, three types of space … and they will pay handsomely for them!

 

·         Office space (be that bedroom or study)

·         Outside space (gardens or proximity to green areas)

·         Broadband with ‘outa-space’ download speeds

 

And whilst there is a shortage of properties coming on to the market, demand and supply economics

mean …

 

Huddersfield house prices should remain relatively stable going into 2022.

 

The number of properties coming onto the market in Huddersfield is slowly improving, yet not enough to diminish house values.

 

Also, don’t forget Huddersfield first-time buyers still have stamp duty relief all to themselves again and mortgages are cheap. At the beginning of the 2020 lockdown (Spring 2020), mortgage providers removed their higher risk 5% deposit mortgages for fear of a housing market crash. Currently, the vast majority of these low 5% deposit mortgages are back, together with the Governments own 5% deposit mortgages.

 

Yet many Huddersfield homeowners are concerned about inflation

and its effect on their mortgage payments.

 

Inflation is important because if inflation gets too high, the Bank of England will need to raise interest rates to reduce inflation. Because mortgage payments are based on the Bank of England interest rate, higher mortgage payments will affect what people can afford. Normally the higher the mortgage rate, the less likely house prices are to increase (and in fact if interest rates are too high, house prices will fall).

 

Whilst I can’t give you advice, with the Bank of England base rate at a 300-year historic low of 0.1%, I’m still surprised that nearly 3 in 10 Huddersfield homeowners with mortgages are not on a fixed rate mortgage. There has never been a better time to get a fixed rate mortgage, as there are deals out there with interest rates as low as 1%. This means even if interest rates do go up in the short term, you will be protected from higher mortgage costs. Anyway, back to inflation.

Inflation did rise quite quickly and steeply in 2008/9

but came back down within a year.

 

This was because of a shortage of staff and raw materials during the Credit Crunch of 2008/9, the very same issues we are experiencing at the moment in Q4 2021. The type of inflation (yes, there are types of inflation!) in 2008/9 was called ‘push inflation’. Whilst inflation is not great, ‘push inflation’ could be described the better type of inflation (as long as is it doesn’t go on for too long).

 

The economic crippling hyper-inflation seen in the 1970s was ‘pull inflation’. The circumstances that create ‘pull inflation’ are not being experienced at the moment buy in the UK. This is good news because ‘pull inflation’ is bad inflation, which in turn would create massive problems to the UK economy as a whole.

 

Therefore, whilst inflation will probably rise to 4% - 5% by Christmas, I don’t believe the Bank of England will raise interest rates substantially as the message we are hearing from them is they see this as a short-term blip.

 

Opportunities for Huddersfield buy-to-let landlords?

 

Ultra-low mortgage rates and a booming rental market is encouraging more Huddersfield buy-to-let landlords to expand their rental portfolios, yet their strategy is changing. Yields are increasing as there is a shortage of rental properties, driving up rents. Also, there are Huddersfield landlords looking to exit the rental market, often because they want to liquidate their portfolio for retirement. These portfolios don’t make it onto Rightmove and get sold ‘off market’.

 

Therefore, if you are a serious Huddersfield buy-to-let landlord and you’re looking to expand your own portfolio, it’s really important to put yourselves on the mailing list of estate agents and also build up great one-to-one relationships with the same agents to ensure that you’re at the front of the queue for these off market rental portfolios and not at the back.

 

To conclude, nobody knows the answer to what will happen to the property market in Huddersfield as we go into 2022. There are many factors that could affect the market in a positive and negative way, yet buying property is always a long-term investment (be it for yourself or to rent), so if you need any advice or opinion on what you should do, drop me a line or pop into the office and we can discuss the options you have over a cup of coffee.