Huddersfield Buy-to-Let Market on the Rise as Returns Rise by 41.1% in 5 Years

Huddersfield landlords are becoming progressively more self-assured about expanding their rental portfolios; as Huddersfield rents rise, mortgage interest rates fall and demand for decent Huddersfield rental properties outstrips supply.

 

A number of reports nationally would suggest around a third of UK ‘portfolio’ landlords (i.e. landlords with more than one rental property) are actively looking to expand their rental portfolios in the next 12 to 18 months, that would locally mean …

 

1,725 Huddersfield ‘portfolio’ landlords are looking to add to

their rental portfolio by the end of 2022.

 

The pandemic has had a substantial change to what we want from a home. Many people think that relates just to homeowners, yet nothing could be further from the truth as it also applies to tenants.

 

Homeowner or tenant, many of us have spent a lot of time away from places of work. Many office workers face the outlook of the combination of working from home as well as at the office, meaning a change in what people look for in their home. People (including tenants) are looking for larger properties, with extra rooms for office space and decent sized gardens or to be closer to outside green space.

 

So, let’s look at the ‘scores on the doors’ as to why Huddersfield landlords are on the up …

 

Huddersfield house prices are 24.7% higher than 5 years ago.

 

Because some Huddersfield first-time buyers are being priced out of the market due to these house price rises, they are being forced back into the rental market. Add the extra demand of the 1 in 10 Huddersfield house sellers who, in the last 12 months, have had to go into rented accommodation instead of buying, and this has created increased demand, meaning …

 

Rents today in Huddersfield are 7.2% higher than a year ago

and 16.4% higher than 5 years ago.

 

The average rent of a Huddersfield property today is £762 pcm.

 

In previous articles on the Huddersfield property market, I was talking about the lack of properties to buy – yet that issue is also there in the British rental property market. Now let’s look at the supply of rental properties.

Would it surprise you that the number of private rented homes in the UK has fallen in the last 12 months by just over 2.5%?

 

Why? One reason has been many ‘accidental’ landlords have used this housing market to sell their property for a good price. That means the supply of available rental properties has decreased. The perfect storm of increased demand and lower supply, and with many Huddersfield tenants competing for those larger Huddersfield homes, they may find Huddersfield rental prices pick up even more over the next year.

 

What about buy-to-let mortgages for Huddersfield landlords?

 

The banks all but withdrew from buy-to-let lending in the first lockdown. Yet, since last summer things have settled down and during 2021 there has been a mortgage price war.

 

Huddersfield landlords can borrow 60% of the value of their BTL property on a two-year fixed rate of 1.18% from Platform and even those with a 20% deposit (that’s borrowing 80%) can borrow that money at 2.49% 2-year fixed rate from The Mortgage Works. Those looking to fix for a little longer can get 1.44% from The Mortgage Works and 1.79% at 75% loan to value from Santander.

 

(It must be noted there are some fees to these mortgages, and you must take advice from a qualified mortgage advisor before deciding which mortgage is best for you).

 

So, is now the best time to invest in Huddersfield buy-to-let property?

 

If you are attracted to invest in Huddersfield buy-to-let, it’s vital to do your homework first – particularly if you are new to the game.

 

When estimating the expected rental returns on investment, capital growth and yields, many Huddersfield landlords look to what has happened with house prices and rental prices, yet past performance does not always deliver a future guaranteed return.

 

Smart Huddersfield landlords will speak with agents like myself and others in Huddersfield, prudently researching the Huddersfield property market to discover what types of properties are in high demand (and short supply) from tenants.

 

Whether you are a landlord of ours or not, please feel free to drop me a line via email or social media for no nonsense advice on the important matters to look out for before investing in Huddersfield buy-to-let.

Why Are More Brighouse OAP Homeowners Deciding Not to Move Home?

A recent report by Legal & General stated that since the pandemic, many older homeowners had put their plans to move home 'on ice'. It said that fewer OAP homeowners are planning to downsize from their large family homes after the pandemic made them realise the actual value of their local community and space.

 

Historically, many OAPs move home to another part of the country to live near their grown-up children. Yet the pandemic has shown that OAPs can live quite well locally without moving to a strange new town to live near their children. The support networks of their friends in their existing community has emphasised the significance and importance of having friends close by.

 

Yet this trend isn't just for OAPs moving away. Many Brighouse OAPs who aren't moving away from Brighouse (because their family is still local) are also deciding to stay put longer for the same reasons. Even though they are rattling around their large 3 and 4 bed detached family homes, they love the space their large Brighouse homes offer.

 

And for those Brighouse OAPs who are wanting to move, the issue is that the choice of properties they could buy to downsize is limited. This scarcity of properties for sale, called the 'housing crunch’, can be seen by that lack of choice of properties for OAPs to move to.

 

Only 19 bungalows are for sale

within a half a mile radius of Brighouse

 

In a 'normal' Brighouse property market, I would expect this to be double or even triple this number.

 

All these factors combined means these OAP "eternal homeowners" threaten to make the scarcity of properties coming on to the market even worse!

 

So, why is this an issue for everyone else?

 

Well, because Brighouse OAPs aren’t moving from their large 3 and 4 bed detached homes to smaller bungalows or ground floor apartments, this is creating a blockage on the housing ladder. Brighouse families, in their 30’s and 40’s, are desperate for larger 3 and 4 bed detached homes for their ever-expanding families. But if the OAP sellers of those family houses aren’t moving, they will remain overcrowded in their existing homes.

 

Let’s look at the numbers first.

 

·         There are 4.42m UK over-65 property owners, and their properties are worth a combined £1.53 trillion (which covers just under three-quarters of the national debt).

 

·         71.3% of those aged 65 and over own their home (although 1 in 10 still has a mortgage).

 

·         There are 4,217 Brighouse homes occupied by OAPs, representing 28.2% of all the households in Brighouse (notable compared to the UK average of 31%).

 

·         87.9% of those Brighouse OAPs are retired, meaning the rest are still working! (The national average is 83.4%).

 

·         The total value of the property in Brighouse owned by OAPs is £572.5m.

 

·         68.2% of Brighouse OAPs own their home outright (compared to the national average of 65.8%), and 4.6% of Brighouse OAPs own their home, albeit with a mortgage (compared to the national average of 5.5%).

 

Many Brighouse OAP homeowners simply love the house and neighbourhood they live in, often living in their homes for over 25+ years. I talk to many mature Brighouse homeowners who say they are afraid to put their home on the market, because they believe (incorrectly) if they find a buyer for their home and can’t find another property to go to ... they would be made homeless.

I can only share my opinions on the matter. The one thing I have seen in my years in the property market is that so many Brighouse people leave it too late to move home. So, when they do move, they aren’t fit enough to do all the jobs in their new home. Indeed, is it better to move home in your late 60's/early 70's, meaning you can still do the little things to make your new house a home, rather than in your late 70's/early 80’s and find the jobs are much harder to do?

Also, if you are worried about finding your next home, get yourself on the mailing lists of all the Brighouse estate agents.  A recent study showed only 1 in 6 buyers were on an agent’s mailing list for the property they bought. Therefore, by being on the mailing list, you will get to know of any suitable properties coming on the market before most others. This is important in this housing market; a property is often sold STC before it hits Rightmove (to a buyer that put themselves on the agent’s mailing list).

By downsizing, you could use the additional funds to top up your pension, take the family on a holiday of a lifetime (once it’s safe to do so of course), or help your children get on the housing ladder themselves with a deposit for their own home.

I fully appreciate many of the 3,063 OAP homeowners in Brighouse have many reasons to stay, be that sentimental, friendship, support networks etc. My advice to all of you is to do your homework, put yourselves on the mailing lists of agents (in case the property of your dreams comes up) and do what is best for you. By downsizing, you are giving yourself better options for your quality of life and massive opportunities to spend more time on the things you enjoy like your family, holidays, or even helping others.

The choice, as they say, is yours.

 

If you are a Brighouse homeowner and want to ask me anything about what I have said, please drop me a line to discuss the matter further at no cost or obligation.