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.