44.7% of Huddersfield Tenants are White Collar Middle Class

 With Huddersfield youngsters not able to buy their own property, my research would suggests the progressively important role the private rented sector has been playing in housing people in need of a roof over their head, especially at a time of increasing affordability problems for first time buyers and growing difficulties faced by social housing providers (local authorities and housing associations) in their ability to secure funding from Westminster and then compete against the likes of the Bovis’s and David Wilson’s of this world to buy highly priced building land.

Renting isn’t like it was in the 1960’s and 70’s, where tenants couldn’t wait to leave their rack-rent landlords, charging sky-high rents for properties with Second World War wood chip wallpaper, no central heating and drafty windows. Since 1997 with the introduction of buy to let mortgages and a new breed of Huddersfield landlord, the private rented sector in Huddersfield has offered increasingly high quality accommodation for younger Huddersfield households.

So whilst I knew in my own mind that the type and class of tenant has improved over the last 20 years, I had nothing to back that up ... until now. According to some detailed statistics from Durham University just released, for the Kirklees Council area, the current situation regarding social status of tenants shows some very interesting points. Using the well known Demographic ABC1 grade classifications which refers to the social grade definitions (which describe, measure and classify people of different social grade and income and earnings levels, for market research, social commentary, lifestyle statistics, and statistical research and analysis) this is what I found out.

Of the 38,579 tenants who live in a private rented property in the Kirklees Council area, 11.76% (or 4,557) of those tenants are classified in the AB category (AB Category being Higher and intermediate managerial / administrative / professional occupations), compared to 21.07% owner occupiers who own their property without a mortgage or 3.0% who rent their property from the local authority. Fascinating don’t you think?

Looking at the C1’s (C1’s being the Supervisory, clerical and junior managerial / administrative / professional occupations), of the already mentioned 38,579 tenants in the area, an impressive 12,801 of them are considered to be in the C1 category (or 33.03%). Again, when compared with the owner occupiers who own their property without a mortgage, that figure stands at 26.94%   and 15.29% who rent their property from the local authority.  So, if we use the conventional measurements recorded by the white-collar “ABC1” i.e. middle class ….

This means 44.78% of tenants are considered middle class in Huddersfield

I could go through all of the social categories through to ‘E’, but I humbly don’t want to bore you with too many numbers. The fact is that private tenants are moving up the social ladder and whilst back in the 1960’s and 70’s, the private rented sector in Huddersfield (and the rest of the UK) has customarily been viewed as a temporary tenure for 20 somethings before they bought a property, the increase in renting in Huddersfield, which I have talked about many times in the Huddersfield Property Market Blog may be a reflection of increasing difficulty for this group in accessing other tenures, but may also be a reflection that people nowadays choose to rent long term instead?

Huddersfield Landlords need to be aware that tenants now demand more from their properties, the agent and their landlord and whilst affordability for first-time buyers and tighter controls on lending may mean that potential first-time buyers are in the private rented sector for longer, they will still pay ‘top dollar’ rent for a ‘top dollar’ property.

For more articles like this ...please visit the Huddersfield Property Market Blog INSERT https://huddersfieldproperty.blogspot.co.uk/




Asking Prices of Huddersfield Property down 7% in the last year

Asking Prices of Huddersfield Property down 7% in the last year

I had an interesting question the other day from a homeowner in Birkby who asked me the difference between asking prices and values and why it mattered. When it comes to selling property, there must be agreement between the purchaser (buyer) and seller (vendor) for a property sale to take place. The value a buyer applies to a property can massively differ from the value a seller or mortgage company places upon it. The seller, the buyer and the mortgage company must find an agreeable value to assign to a property so the sale can proceed.

In many of my articles about the Huddersfield property market, I talk about values, i.e. what property in Huddersfield actually sells for, but I haven’t spoken about asking prices for while. Now asking prices are important as they are one of the four key matters a potential buyer will judge your property on (the others being location, bedrooms and type). Price yourself too high and you will put off buyers. So let’s take a look at the Huddersfield numbers.

Over the last 12 months asking prices (i.e. the price advertised in the paper and on Rightmove) in Huddersfield have decreased by 7%, taking the average asking price in Huddersfield to £154,200 (down from £166,600 twelve months ago).

Interestingly though, when we look at, say detached property and flats, a slightly different picture appears. Twelve months ago, the average asking price for a detached house in Huddersfield was £305,500 and today its £308,800 (a rise of 1%); whilst over the same 12-month period, the average asking price of a flat was £119,900 a year ago, and today its £114,700 (a drop of 4%).

In December 2015, there were 788 on the market in Huddersfield today there are 736 properties on the market (down 7%). This will mean homeowners looking to sell will need to be conscious of how their property compares against others on the Huddersfield property market. The Huddersfield property market still has substantial momentum and sufficient demand remains. This noteworthy decrease in supply since Christmas is currently providing less choice for buyers and is tempering asking prices.

… And here is the second point to make. Asking prices are one thing, but what a property sells for (i.e. value) is a completely different matter. These are the average prices achieved (i.e. what they sold for or the average value) for property in Huddersfield over the last 12 months...

·         Overall Average          £160,500

·         Detached                     £264,600

·         Flat                              £109,100

You can quite clearly see, there is a difference between what people are asking for property and what it is selling for. The underlying fundamentals of low interest mortgages and tight supply remain prevalent in the Huddersfield property market however, the number one lesson has to be this ... if you want to sell, be realistic with your pricing.

UK % Monthly House Price Grown - May 2016

10% slump in Quarmby Property Transactions

In this post credit crunch world of sub terrain low interest and annuity rates so low a limbo dancer would smart, the growth of buy to let since 2009 has been phenomenal. So much so, there has been an evolution in purchase of property in the UK from that of just buying the roof over one’s head to that of a buy to let investment where it is seen as a standalone financial asset to fund current and future (ie pensions) investment. So recently, a few days before the release of latest Land Registry data of property transactions, quite a few market commenters were anticipating a huge increase in the number of properties sold in January as the 1^st of April 2016 stamp duty deadline got closer.   

Looking at the most recent set of data from The Land Registry, it seems there has been a rise in the number of completed property sales in the Kirklees Metropolitan Borough Council area. Year on year, completed property sales in January (the latest set of data released) rose by 29.65% to 376 compared with 290 in January 2015. Nationally, the number of completed house sales fell by 5% in January 2016 compared with January 2015. Some might say this bucks the market trend that there was a rush by Huddersfield landlords to buy ‘buy to let’ property ahead of the 1^st April 2016 deadline …

But looking even closer to home, in the HD3 postcode in January 2016, 27 properties changed hands, and 30 properties did so in January 2015. It’s even more interesting when you look at the average price paid, in January 2016, it was £156,109 yet in January 2015, the average price paid was £140,188.

Is the buy to let dream over for Huddersfield landlords?

.. but as ever my Huddersfield Property Blog readers, the devil is in the detail. The 3% stamp duty surcharge for buy to let landlords was announced in the Autumn Statement on the 25^th November 2015. Anyone who has bought a property knows from their offer being accepted to receiving the keys and monies paid is a long drawn out affair, taking on average 8 to 12 weeks, as the Land Registry only get notified upon completion of the sale. We also need to factor in that Solicitors seem to have the last two weeks of December off anyway.

So if there was a rush in the last few days of November/early December in the Huddersfield property market, we would only see the results of that in the February figures (released in June) and more probably March’s (released in July).

So why all the doom and gloom? Simple .. bad news sells newspapers and gets the headlines. Let’s be honest, the headline to this article is designed to be eye catching. However, when we look at both the bigger and smaller picture; nationally, property values dropped (month on month) by 0.5%; in the Yorkshire and Humber region they dropped 2.6%, whilst in Kirkless they dropped by 0.3%. The year on year figures tell a completely different story to that.

It just goes to show you should look deeper into something before making a judgment! For more thought provoking commentary on the Huddersfield property market – please visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

5,365 Kirklees Properties lie empty– An injustice for the 9,160 people on the Kirklees Council House Waiting List?

 Easy problems should have easy solutions  - shouldn’t they?

Problems like Huddersfield’s housing crisis, where we have a rudimentary numerical problem of too few homes for too many people ... the answer is clearly to build more property in Huddersfield - but that, unfortunately for those desperately seeking to purchase or let a property, takes a lot of time and huge amounts of money. So what of other solutions?

Whilst at a dinner with friends recently, the subject of property was mentioned (as I am sure it does at most dinner parties up and down the country). Normally someone always mentions empty properties as the solution to the problem. On the face of it, it seems so obvious. Now quite interestingly, I had recently done some research on this topic, which I want to share with you (as I did with those at the dinner table).

The most recent set of figures from 2015 state there are 5,365 empty homes in the Kirklees Council area. So it begs the question ... why not put them back onto the system and help ease the Huddersfield housing crisis? Whilst they stand empty, 9,160 Kirklees households (not people – households) are on the Council House Waiting List for council houses. Surely, we can undoubtedly all agree that property left empty for years and years isn’t morally right with the burgeoning Council House Waiting List, not to also mention the issue of homelessness.

But a different story emerges when you look deeper into the numbers. Of those 5,365 homes lying empty, only 2,217 properties were empty for more than six months. The local authority has to report a property being empty, even if it’s for a week. So many of the Huddersfield properties are either awaiting new homeowners or, in the case of rental properties, new tenants. Also most certainly, some properties are being refurbished and renovated, while others properties have homeowners who are anxious to sell but cannot find a buyer.

And this is where its gets even more interesting. Of the 2,217 long-term vacant properties (those empty more than six months), 258 belong to the council. However, before we all go Council-bashing, anecdotal evidence suggests these empty council houses are habitually in need of so much restoration that it’s not worth the Council’s while to do and are in the roughest parts of the council estates, they are properties that even the Council find difficult to fill.

The fact is that the number of genuinely long term empty properties is only a tiny drop in the ocean of the 173,525 properties in the area covered by Kirklees Council and, even if every one of those empty homes were filled with happy cheerful tenants tomorrow, it would only meet a small fraction of Huddersfield housing needs.

So what does this mean for all the homeowners and landlords of Huddersfield? Well it means with demand being so high, especially for rental properties, the certainty of the rental market growing is an inevitability because young people cannot buy and councils don’t have the money to build new council houses. This in turn bolsters property prices as landlords continue to buy at the lower end of the market (starter homes, etc), which in turn sustains the rest of the market as those sellers move up the property ladder, releasing others in turn to buy on again.

These are interesting times in the Huddersfield property market!

£3,200 boost to Huddersfield First time buyers

There’s a whole legion of wannabe Huddersfield first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Huddersfield landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Huddersfield buy to let landlords has dropped away, in the interim, it offers Huddersfield first time buyers (FTB’s) a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.

Looking at the average value of a terraced house in Huddersfield currently standing at £109,900, that means if our Huddersfield FTB went up against a Huddersfield landlord, the landlord would have to pay an additional £3,297 in stamp duty. Early antidotal evidence from fellow property professionals in the town is suggesting landlords are reducing their offers slightly on Huddersfield properties to reflect the extra stamp duty.  

Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Huddersfield property market as a whole.

Since 2011/12, the Huddersfield property market has performed very well indeed. Over the last 12 months, £377,762,304 has been spent buying 2,346 Huddersfield properties.  Figures from the Land Registry have just been released and month on month in our council area, property values are 0.3% lower, yet 1.7% higher year on year. These figures are nowhere near the heady days of 2004 (April to be exact), when Huddersfield property prices rose by 29.6% in 12 months.

So as property values in Huddersfield (and the UK as whole) start to stablise and come back to some kind of balance, I am beginning to see savvy landlords view the Huddersfield property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords, after reading the Huddersfield Property Market Blog http://huddersfieldproperty.blogspot.co.uk/ take advice on what or not to buy and what to pay, meaning Huddersfield landlords are being more calculated with their Huddersfield BTL purchases. I am also seeing a variance between relatively brisk current price momentum and softer expectations in terms of property value growth in Huddersfield, this in part reflects amplified uncertainty about the short term economic outlook (eg Brexit, Issues in the Far East etc).

Now I know a lot of Huddersfield landlords brought forward their BTL purchases to beat the stamp duty deadline. However, it is probable that hunger from Huddersfield investors will return for the right Huddersfield property later in the year, especially if it’s at the right price and offers a decent yield. However, in the meantime, Huddersfield FTB’s could and should, in the short term, make hay whilst the sun shines plug the gap and grab a bargain!

Brexit and Huddersfield Property market – 12% more properties on the market

 April Fools Day was no joke for some landlords, as they rushed their buy to let property purchases throughout late March to beat the extra 3% stamp duty George Osborne imposed on buy to let properties after the 31^st March 2016. Because some investors brought forward their 2016 property purchases to save the extra tax, speaking to fellow property professionals in Huddersfield, all of us have noticed, since the clocks went forward, demand to buy in April and May from these landlords has eased.

Then we have the Brexit issue, which is also having a tempering effect on the Huddersfield property market – although if you recall I wrote about this a few weeks ago, and whilst an exit will have an effect – it won’t be the end of the world scenario some commentators are suggesting. In another article I wrote previously, I spoke of the growth rate of Huddersfield property values, and whilst the rate of growth is slowing, Huddersfield property values are still 1.3% higher year on year, albeit the growth rate month on month has started to moderate when compared to the heady days of month on month rises of 2014 and 2015. Interestingly though, a very recent members survey of the Royal Institution of Chartered Surveyors states that only 17% of members believed property values would increase over the next Quarter compared to 44% at the end of 2015.

All this had led to increase in the number of properties for sale. For example in the HD2 postcode, which mainly comprises of Birkby, Brackenhall, Bradley, Deighton, Fartown, Fixby and Sheepridge, there were 224 properties for sale in the postcode in December (of which 22 came on to the market for the first time). In January, February and March, 142 properties came onto the market in the postcode district (or an average of 47 per month), meaning by end of the first Quarter, there were 251 properties available for homeowners and landlords alike to buy in HD2 (i.e. a rise of 12% more properties for sale). These figures are mirrored in neighbouring postcodes throughout the Huddersfield area.

Nevertheless, I believe this easing of the Huddersfield property market is a good thing, as investment landlords wont have to pay top dollar to secure a property because of the lower competition. On the face of it, this easing should be bad news for the 107,657 Huddersfield homeowners, but nothing could be further from the truth. The majority of homeowners that move, move up market, (i.e. from a flat to terrace/town house, then a semi and then detached), so whilst last year you would have achieved a top dollar figure for your property, you would would have had to have paid an even higher top dollar to secure the one you wanted to buy. The Swings and Roundabouts of the Huddersfield Property Market!

However, all the signals suggest that whatever the aftermath of the approaching EU referendum, in the long term, the disparity between demand for Huddersfield property and the supply (i.e. the number of actual properties) will still exercise a sturdy and definitive influence on the Huddersfield property market. It would surprise me that if by 2021, whichever way we vote in late June, assuming we don’t have another credit crunch or issues like a major world conflict, property prices will be between 15% to 18% higher than they are today.