Huddersfield Semi Detached House Prices rise by 203% in 20 years

The semi-detached house with its bay windows and net curtains has long been ridiculed as an emblem of safe, lacklustre and desperately uncool suburban life; the homes of the likes of Hyacinth Bucket in Keeping up Appearances and more latterly Alan Partridge – but they could have the last laugh - having enjoyed the highest price growth of any property type in Huddersfield, up by an average 203% increase in the last twenty years.

The semi can now laugh in the face of its posher detached counterpart, which saw a rise of only 155% in the same 20-year period. Looking at smaller properties, flats/apartments only rose 148%, whilst terraced houses did slightly better at 185% (although they were starting from a lower base and demand from buy to let landlords has had a big part in driving the values on that type of house (i.e. the price a buy to let landlord is prepared to pay is driven by the rent the landlord can achieve).

In 1996 the average value of a Huddersfield semi stood at £44,100,

today it stands at £133,600

Such is the attractiveness of semis, which are cheaper than detached houses but have most of the same benefits for families. Semi-detached houses were built in their hundreds of thousands by the Victorians and Edwardians between the wars and through to the present day. Interestingly in the late 19^th Century and early 20^th century – they often weren’t referred to as semi-detached – but as villas!

So whilst Europeans live on top of each other in apartments us British chose, in the late Victorian and early Edwardian times, suburban comfort, being near … but not too near, the neighbours! I once heard someone say the semi-detached house was a peculiar crossbreed that doesn’t stand on its own — it is inseparable from its neighbour — yet somehow still embodies a dream of suburban independence.

Nearly one in three houses in Huddersfield is a semi-detached house

There are 21,515 semi-detached properties in Huddersfield and they represent 31.27% of all the households in Huddersfield. Huddersfield has such a mix of semi-detached properties with the older classic bay fronted semis to more modern ones built in the last couple of decades. Especially with the older ones, the semi offered a hall to provided separation between the reception rooms and privacy for their occupants. Also the downstairs offered larger rooms to accommodate dining tables, whilst upstairs, bedrooms were smaller, yet cosy.

However, probably the most overlooked aspect of popularity for semis is the garden. The front garden, designed to separate the house from the world, and the back garden designed for private relaxation. The semi in the suburbs was relaxing, well presented, plumbed and enhanced by a garden so that when a window was opened the air had a chance of being genuinely fresh… and it’s for all those reasons why 579 semi-detached houses have been sold in Huddersfield in the last 12 months alone.  Still as popular today as they were with the Victorians all those years ago – some things just stand the test of time!

For more thoughts on the Huddersfield Property Market – please visit the Huddersfield Property Market Blog at https://huddersfieldproperty.blogspot.co.uk/

Huddersfield First Time Buyers Are Paying 4.1% More Than 12 Months Ago

Figures just released by the Bank of England, show that for the first half of 2016, £128.73bn was lent by UK banks to buy UK property - impressive when you consider only £106.7bn was lent in the first half of 2015. Even more interesting, was that most of the difference was in Q2, as £68.12bn was lent by UK banks in new mortgages for house purchase, which is the highest it has been for two years. Looking locally, in Huddersfield last quarter, £129.6m was loaned on HD1 properties alone!

Even though the Bank won’t be releasing the Q3 figures until December 2016, as I discussed a few weeks ago, HMRC have published their own preliminary data to suggest Q3 will be even better, with a massive growth of buy-to-let landlords to the housing market in that time frame. Fascinating, as it seems to fly in the face of the popular narrative – that the uncertainty surrounding Brexit would negatively impact buyer sentiment.

And it’s not just buy-to-let landlords that seem to be flourishing. I am finding that first-time buyers are also a lot more confident too. Low, and now negative, inflation has had a tangible impact on household finances and first-time buyers feel more secure in their jobs. Couple with a low interest rate environment and you have all the ingredients for a strengthening property market. To back that up with numbers, of the £68.12bn of mortgages lent in the Quarter (Q2), £14.9bn was lent to first-time buyers (the highest proportion of that overall lending for over two years at 21.99%).

When I looked at the data for Kirklees Metropolitan Borough Council area, the average price paid by first-time buyers (FTB’S) was £118,602, which is a rise of 0.88% from last month and a rise of 4.12% to twelve months ago. The Land Registry then categorise the remaining buyers into cash buyers or those buying with a mortgage. The average price paid by cash buyers was £129,530, a rise of 0.75% from last month and a rise of 3.94% to twelve months ago, whilst buyers with mortgages (but not FTB’s), the average price paid by them was £141,368, a rise of 0.81% from last month and a rise of 4.02% to twelve months ago.

What surprised me with these figures was how close the property prices, values and percentages were to each other. It just goes to show the combination of low mortgage rates and a stable job market will continue to have a positive effect on the Huddersfield and UK market.  And that is why, while there is undoubtedly more cautiousness in the market at present than a year or so ago (among borrowers and mortgage companies alike) - mortgage rates are so competitive that they are inducing people to commit to a home purchase.

It seems the great Brexit uncertainty was over hyped, and house price growth as well as mortgage approvals, could pick up pace into 2017.

£2m paid in Stamp Duty by Huddersfield Residents

“A pound saved is worth two pounds earned . . . after taxes” is what my Grandfather used to say. He loved his irony, yet was always a wise man, and it is tax I want to talk about today, in particular, property taxation .. Stamp Duty in fact.

Apart from some minor exemptions, Stamp Duty is paid by anyone buying a property over £125,000 in the UK. It presently raises £10.68bn a year for the HM Treasury (interesting when compared with £27.6bn in fuel duty, £10.69bn in alcohol duty and £9.48bn in tobacco duty).

In the latest set of data from HMRC, in the MP constituency that covers Huddersfield, property buyers paid £2m stamp duty in one year alone – a lot of money in anyone’s eyes (although not as much as the £117m in income tax that all of us in the same area paid last year).

However, as you may know, George Osborne introduced an additional tax for landlords and from 1^st April 2016 they had to pay an additional 3% stamp duty surcharge on top of the normal stamp duty rate when purchasing a buy to let property. There were tales of woe and Armageddon with a report by Deutsche Bank suggesting that the new surcharge could see house prices fall by as much as 20%.

HMRC data released in the Summer for Quarter 2 (Q2) of 2016 did seem to back up those fears as they published some worrying figures; only one in seven properties purchased was a second home or buy-to-let (in real numbers, only 30,300 of the 207,900 properties in Q2 were bought by landlords).

In previous articles, I spoke about the slump of property transactions after the 1^st of April (as landlords rushed through their property purchases in March to beat the April deadline). In Q2 of 2016, £1.976bn was raised in Stamp Duty from Residential Property. Of that £1.976bn, £652m was paid by buy to let landlords (£424m in normal stamp duty and £228m in the additional 3% surcharge).

However, looking at Q3, the numbers have improved significantly. Of the 235,000 property sales, nearly one in four of them (56,100 to be precise) were bought by buy to let landlords and of the £2.208bn in stamp duty, £864m was paid in ‘normal’ stamp duty by BTL landlords and an impressive £442m paid by those same landlords in the additional stamp duty surcharge.

The statistics suggest buy to let investors have thankfully not been deterred by the stamp duty surcharge introduced in April this year. The figures also show that 65.4% of "buy to let" purchases cost less than £250,000, 23.7% of properties were in the £250k to £500k range and 10.9% (or 6,100 additional properties) of buy to let properties bought cost over £500k – interestingly nearly one in four (22.2%) of £500k properties purchased in Q3 were buy to let properties.

It just goes to back up what I stated a few weeks ago when I suggested that many investors had rushed to make purchases before 31^st March, making figures in the following months (Q2) artificially low when the 3% supplement was introduced, but in Q3 the number of buy to let properties purchased increased by 85%.

It just goes to show you shouldn’t believe everything you read in the newspapers! I can assure you the Huddersfield property market is doing just fine. 

Average Rent Paid by Tenants in Huddersfield rise to £715 per month

Back in the Spring, there was a surge in Huddersfield landlords buying buy to let property in Huddersfield as they tried to beat George Osborne’s new stamp duty changes which kicked in on the 1^st April 2016. To give you an idea of the sort of numbers we are talking about, below are the property statistics for sales either side of the deadline in HD1.

Jan 2016 – 8 properties sold

Feb 2016 – 14 properties sold

March 2016 – 55 properties sold

April 2016 – 13 properties sold

May 2016 – 14 properties sold

Normally, the number of sales in the Spring months is very similar, irrespective of the month. However, as one can see, this year was a completely different picture as landlords moved their purchases forward to beat the stamp duty increase. You would think that even with a basic knowledge of supply and demand economics, rents would be affected in a downwards direction?

However, there appears to be no apparent effect on the levels of rent being asked in Huddersfield - and more importantly achieved - and this direction of rents is not likely to inverse any time soon, particularly as legislation planned for 2017 might reduce rental stock and push property values ever upward. The decline of buy to let mortgage interest tax relief will make some properties lossmaking, forcing landlords to pass on costs to tenants in the form of higher rents just to stay afloat. Even those who can still operate may be deterred from making further investments, reducing rental stock at a time of severe property shortage.

.. but it’s not all bad news for tenants. Whilst average rents in Huddersfield since 2005 have increased by 16.7%, inflation has been 38.5% over the same time frame, meaning Huddersfield tenants are 21.8% better off in real terms when it comes to their rent (which is a sizeable chunk of most people’s monthly household budgets)

Year	Average Rent in Huddersfield per month
2005	613
2006	634
2007	653
2008	670
2009	678
2010	679
2011	686
2012	693
2013	699
2014	701
2015	707
2016	715

I found it particularly interesting looking at the rent rises over the last five years in Huddersfield, as it was five years ago we started to see the very early green shoots of growth of the Huddersfield economy.  As a whole, following the Credit crunch (2011), rents in Huddersfield have risen by an average of 0.9% a year – fascinating don’t you think?

The view I am trying to portray is that while renting is often portrayed as the unfavorable alternative to home ownership, many young Huddersfield professionals like renting as it gives them adaptability with their life. Rents will continue to rise which is good news for landlords as buy to let is an investment but, as can be seen from the statistics, tenants have also had a good deal with below inflation increases in rents in the past. It’s a win-win situation for everyone although on a very personal note, it’s imperative in the future that tenants are not thwarted from saving for a deposit by excessive rental hikes – there has to be a balance.

Huddersfield Property Values increase by 0.61% ... good or bad news?

“How's the Huddersfield housing market doing?” asked an upbeat Huddersfield landlord last week.  “Quite strange”, I replied. Our landlord was perplexed! Let me explain...

Even the Brexit vote has not hindered Huddersfield’s steady rise in property value, as Huddersfield property values went up 0.61% last month alone, leaving Huddersfield values 3.88% higher than a year ago. An increase in demand from buyers and an uninspiring level of supply (i.e. the number of properties on the market) has driven up the value of the Huddersfield’s housing.

...And that is where the issue is. With Brexit, the coalition of the 2010-15, a double-dip recession and post credit crunch fallout – I was perplexed that the Huddersfield property market (and values) has remained strong, still 8.3% higher than 20 months ago. That is until you start to look into the real reasons why we find ourselves in such a great place.

The Huddersfield (and the UK) housing market is built on the foundations of basic economic rules that any GCSE Economics student should understand. However, at a time when, as a country, we seem eager to uncouple ourselves from all manner of proven facts, anything is up for grabs.

Even the wary RICS said throughout the UK, most of its Chartered Surveyors anticipated house prices to increase in the next six months, which seems contradictory given economic cautions from Mr Hammond and HM Treasury. Even though inflation will rise to around 2% to 3% in 2017 and perhaps a little more in 2018 because of Sterling’s devaluation, together with a high probability of a decelerating GDP and a slight rise in unemployment, how can the RICS and most of my landlords be so confident about the value of our homes?

Well, look from where we are starting. Nationally, a base of low unemployment, low inflation and preposterously low interest rates, while in Huddersfield, the local economy is doing quite well for itself. Confidence also plays a part. Confidence can supersede basic economic facts for a short time at least, which is why actual property market changes tend to be more exaggerated, as confidence can turn both positive and negative very quickly. The fact is, there is a long-term relationship between property values, wages and unemployment. For example, looking at the graph below, you can quite clearly see the ratio of property values to earnings is nowhere near as high as it reached in 2008 and currently is in the middle of the range for the last 30 years. As a country, we are in a good place.

By April 2017, Article 50 will be invoked. This will bring additional political tomfooleries and economic ups and downs. With both purchasers and vendors predisposed by the 24-hour news cycle, which let’s face it, gets more haphazard by the day, it is likely to prove a challenging couple of years … and yes, Huddersfield property values might drop slightly in 2017, but based on what we know of the UK plc now, the UK and Huddersfield property values are not projected to move that much over 2017 or 2018.  Going into the next two years, we are in much better financial shape as a country compared to the last two crashes of 1987 and 2008.

But, on the other side of the coin, what we also know is that we don't know much about the form of our economic future or indeed many other facets of our lives. Confidence will continue to be the key player in the Huddersfield housing market for a while longer - yet this may spur some much needed second-hand market activity? Now, where is my crystal ball?

Huddersfield Housing Crisis? Only 1.4% of Huddersfield Homes Are For Sale

The Huddersfield Property Market continues to disregard the end of the world prophecies of a post Brexit fallout with a return to business as usual after the summer break.

The challenge every Huddersfield property buyer has faced over the last few years is a lack of choice – there simply hasn't been much to choose from when buying (be it for investment or owner occupation). Levels are still well down on what would be considered healthy levels from earlier in this decade, as there is still a substantial demand/supply imbalance. Until we start to see consistent and steady increases in properties coming on to the market in Huddersfield, the market is likely to see upward pressure on property values continue.

For example, last month HD2 saw 56 new properties coming on to the market, not bad when you consider for some months in the last year the average has been in the early 30’s. With the average Huddersfield property value hitting a record high, reaching almost £169,700 according to my research, this shortage of properties on the market over the last two years has contributed to this ‘fuller' average property figure.

As I write this article, 1.49% of Huddersfield properties are up for sale. In terms of actual chimney pots, that equates to 779 properties on the market in Huddersfield (within 2 miles of the centre of Huddersfield) – which, when compared to only a year ago when that figure stood at 849, is a slight decrease in the number of properties available to buy. Split down into the type of property, it makes even more fascinating reading...

 

·         Detached Properties in Huddersfield  - 161 on the market a year ago compared to 145 on the market now – a decrease of 10%

·         Semi Detached Properties in Huddersfield - 262 on the market a year ago compared to 213 on the market now – a decrease of 19%

·         Terraced Properties in Huddersfield - 250 on the market a year ago compared to 283 on the market now - an increase of 13%

·         Flats / Apartments Properties in Huddersfield  - 82 on the market a year ago compared to 109 on the market now - an increase of 33%

This is evidence of strength in the Huddersfield housing market that many didn't expect. Many believed that the Huddersfield property market wasn't going to be strong enough post Brexit - as what was a sellers' market before the Brexit vote and Buyers' market in the early months after it, may now be somewhere in between and the market might just be coming back into balance.

However, all this will mean property values won't continue to grow at the same extent they have been over the last 12 to 18 months, and in some months (especially on the run up to Christmas and early in the New Year), values might dip slightly. This won't be down to Brexit but a re-balancing of the Huddersfield Property Market – which is good news for everyone. 

Private Renting set to grow by 5,500 Huddersfield households by 2025

I was having a most interesting chat the other day with a Huddersfield landlord when we were looking at a property. As I am sure you are aware, I am always happy to cast my eye over any potential buy to let purchase in Huddersfield, be that you emailing me a Rightmove link, a brochure in the post or even treading the carpet and seeing it together. I don't charge for that, and you don't even need to be a client of mine. We got talking about the Huddersfield Property Market and this landlord brought up the subject of a report he had read from the Royal Institution of Chartered Surveyors (RICS) and PricewaterhouseCoopers (PwC) that stated almost 1.8m new rental homes are needed by 2025 to keep up with current demand from tenants. He wanted to know what this meant for Huddersfield.

Well my blog reading friends, some commentators said last Winter that buy to let was about to die, what with the new stamp duty changes and how mortgage tax relief will be calculated. Others even said 500,000 rental properties would flood the market nationally in the 12 months after the new Stamp Duty rules came into force on the 1st April 2016 as landlords left the rental market. Well, all I can say is, I wish all the landlords of those half a million properties would hurry up and put them on the market – because I have plenty of other potential landlords wanting to buy them!

Back to the matter in hand.. if the RICS and PwC are indeed correct, what does this mean for Huddersfield? The fact is, as a country, we are facing a precarious rental shortage and need to get Huddersfield building in a way that benefits a cross-section of Huddersfield society, not just the fortunate few. I call on the Prime Minister to drop the higher stamp duty tax on buy to let purchases to ease the pressure on the rental market.

Of the 69,100 households in Huddersfield, currently 28,400 tenants live in 13,000 private rented properties. If we apportion those 1.8m households equally around the Country, that means in nine years’ time, the number of rental properties in Huddersfield needs to rise by 5,500 (i.e. 42.8%) .. taking the total number of rented properties in the city to 18,500.

That means Huddersfield landlords need to buy around 600 properties a year between now and 2025 to meet that demand – because according to my calculations, an additional 12,200 people will want to live in all those 'additional' Huddersfield rental properties – so why is the government penalising landlords?

Thankfully the new housing minister Gavin Barwell detached Teresa May's new administration from the Cameron/Osborne laser-like focus of just home ownership to solve our housing issues, saying "we need to build more homes for every single type of person needing a home and not focus on one single tenure". The private rented sector became a stooge under David Cameron's watch and still, with increasingly unaffordable Huddersfield house prices, the majority of new Huddersfield households will be relying on the rental sector in the future to house them. I can only say Westminster must put in place the measures that will allow the rental sector to flourish. Any restrictions on the supply of rental property will push up rents (bad news for tenants), thus side-lining those members of Huddersfield society who are already struggling. Let's hope this new Government continues to see the contribution landlords give to the country as a whole.