£841 pcm – The Average Huddersfield Rent

The rents paid by Huddersfield tenants are now standing at £841 per calendar month (PCM), a rise of 1.40% year on year and 0.33% lower month on month.

However, this attention-grabbing monthly rent figure masks stark differences in the various different parts of the Huddersfield rental market.  Demand in Huddersfield for high quality family homes with two or three bedrooms in good catchment areas for schools remains really robust due to tenants wanting access to the schools.  Other influencing factors that make certain areas popular are the proximity to transport links. However, I have noticed a drop in demand (and thus rents achieved) for property where the landlord hasn’t kept the property fresh; in terms of decoration, carpets, replacement windows and poor heating.

So, what does all this mean for Huddersfield landlords and tenants?

With the new tax rules for landlords, many believed that the number of rental properties would narrow throughout 2017, as landlords sold up their Buy to let properties and looked to invest their money elsewhere, but evidently this hasn’t happened (yet).  Feasibly Huddersfield landlords are re-mortgaging their Huddersfield buy to let properties instead, as they still believe it’s a safer investment than looking, say at the stock market?
However, demand remained strong in 2017 for Huddersfield private rental properties, meaning the rents being achieved were at a decent level for landlords. Keeping your outgoings low is also an important consideration and so I looked on a well-known financial services comparison site this morning and found a High Street bank offering a 5-year fixed rate for Buy to let landlords with a 40% deposit/equity for 2.17% … I can remember (as I am sure many of my readers of this blog can) when mortgage rates were at 15% - this is cheap money!

Looking at property values in Huddersfield, over the last 12 months and specifically at the lower of the market where buy to let landlords tend to buy their rental properties.  Flats/apartments have risen in value by 4.37% whilst terraced properties have risen by 4.23%.

Some Huddersfield landlords have seen the yields they are achieving remain squeezed.

However, most landlords can start to feel assured that as capital growth in Huddersfield remains at a more realistic figure (good for long term stability in the property market) and long-term rents are on the rise, the overall corresponding annual return on investment (Annual ROI being annual capital + annual yield) has stabilised in all areas and is now starting to grow.

With additional people seeing renting as a long-term option, even with the challenges of the new tax regime, Huddersfield landlords, with the support of a good advice and opinion, should continue to see renting as a good investment vehicle.

Huddersfield Millennials Have Spent £117,556 On Rent By The Age of 35

The Millennials were born between the mid 1980’s and late 1990’s thus making them between the age of around 22 to late 30’s. They are the imaginative, artistic youngsters who grew up with the newest tech and computers and who are huge aficionados of music festivals, gourmet pizzas, emoji’s, selfies and old school nostalgia. Also known as Generation Rent, many Millennials have discovered that renting is a good choice for their shelter and accommodation needs without the hassle that comes from buying a home. Nonetheless, that is not the only reason they don’t buy property. When they should be concentrating on their profession, putting down roots and starting a family, Millennials are still going through the pressure and strain of student loan liabilities whilst, at the same time, finding it tough to pay rent.

The hot topic at the moment is the cost of renting, as both political parties have seen mileage in wooing these Millennial Generation Renters. The average rent in Huddersfield is currently £816 per month making this a big-ticket item on the monthly budget. I was inquisitive to find out exactly how much Huddersfield Millennials will spend on rent by the time they reach their mid 30’s. The average age people leave home in the UK is 22; so looking at a Huddersfield 22-year-old (or Millennial) who left home in 2005 then between 2005 and today that Huddersfield Millennial will have shelled out £117,556 in rent.

It’s no wonder local Millennials can’t afford to buy a Huddersfield home given their tremendous debt. This means younger Huddersfield Millennials will probably carry on renting for the foreseeable future, simply because the prospect of buying a home is not yet achievable.. that is until you look more deeply at the numbers…

Looking at the chart above, the average rent of a Huddersfield property in 2005 was £684 per month (pm)  … if it had risen by inflation, today, that would be £964 pm. As I have already mentioned in the article, today it only stands at £816 per month. Looking over the last 12 years, adding up all the differences between what the average actual rent was compared to what it should have been if rent had gone up by inflation, the average Huddersfield Millennial tenant would have paid £129,374.

This means that an average 35-year-old Huddersfield Millennial tenant, who has been renting since 2005, is better off by £11,818 when comparing the actual rent paid compared to what it would have been if it had risen by inflation. In a nutshell, tenants have done well due to the sub-inflation growth in rents.

In fact, if you recall I mentioned in an article a few weeks ago, the older Huddersfield Millennials are starting to use those savings and are gradually shifting towards home ownership. They are finally catching up with the British homeownership dream as Bank of Mum and Dad help with the deposit. Also, the scrapping of Stamp Duty from the Government starts to kick in together with the realisation that if the 5% mortgage deposit can be scrapped together (yes, 95% first time buyer mortgages have been available since 2009), it is still a lot cheaper to buy than rent, meaning this will unquestionably drive demand for Huddersfield homes for sale – good news for Huddersfield homeowners.

… and what does this mean for Huddersfield landlords?

Well the vast majority of younger Millennials are still renters and I foresee this to be the case for at least the next ten to fifteen years. Landlords will need to keep improving their properties to ensure they get the best tenants and they will see a much higher rent achieved. Millennials will pay top dollar for a top dollar property. It is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a greater number of properties on the market .. comes greater choice. Don’t buy the first thing you see, buy with your head as well as your heart … because as I promised a few weeks ago, the first rule of Buy To Let Investment ….. “You are not going to live in the property yourself”

Huddersfield Property Market – Which Houses are Actually Selling?

Beast from the East, Russia, Facebook, Brexit, Trump, House prices up, House prices down ... the Press is full of column inches on Brit’s favourite subjects of politics, scandal, weather and not forgetting (and I appreciate the irony of this!) the property market. As an agent belonging a national group of letting and estate agents, talking to my fellow property professionals from around the UK, the one thing that is immediately apparent is the UK does not have one property market. It is a hodgepodge patchwork (almost like a fly’s eye) of lots of small property markets all performing in different ways.  

… And that made me think … is there just one Huddersfield Property Market or many?

I like to keep an eye on the property market in Huddersfield on a daily basis because it enables me to give the best advice and opinion on what (or not) to buy in Huddersfield, be that a buy-to-let property for a Huddersfield landlord or an owner occupier house for a home owner.  So, I thought, how could I scientifically split the Huddersfield housing market into segments, so I could see which part of the market was performing the best and the worst.

I decided the best way was to split the Huddersfield property market into four equal size price bands (into terms of households for sale). Each price band would have around 25% of the property in Huddersfield, from the lowest in value (the Lowest Quartile or 25%) all the way through to the highest 25% in terms of value, the Upper Quartile.  Looking at the market, I have calculated that these are the price bands in Huddersfield are as follows:

·         Lowest Quartile (lowest 25% in terms of value) … Up to £110,000

·         Lower/Middle Quartile (25% to 50% Quartile in terms of value) ...  £110,000 to £160,000

·         Middle/Upper Quartile (50% to 75% Quartile in terms of value) ... £160,000 to £260,000

·         Upper Quartile (highest 25% in terms of value) ... £260,000 Upwards

So, having split the Huddersfield Property Market approximately into four equal sizes, the results in terms what price band has sold (subject to contract or stc) the most is quite enlightening -

Huddersfield	Available	Sold STC	% Sold
Up to £110,000	357	214	37.5%
£110,000 to £160,000	329	279	45.9%
£160,000 to £260,000	346	218	38.7%
£260,000 Upwards	380	165	30.3%

The best performing price range in Huddersfield is the middle market. As I would expect, the upper quartile (the top 25%) is finding things tough. Interestingly for Huddersfield landlords, the lower market is also selling well, meaning there are plenty of Huddersfield landlords buying properties to add to their buy to let portfolios. Even though the number of first time buyers did increase in 2017, it was from a low base and the vast majority of 20 something’s cannot buy, so need a roof over their head (hence the need to rent somewhere).

It is a fact that British (and Huddersfield’s) housing markets have ridden the storms of Oil crisis in the 1970’s, the 1980’s depression, Black Monday in the 1990’s, and latterly the Credit Crunch together with the various house price crashes of 1973, 1987 and 2008. No matter what happens to us Brexit or anything else ... unless the Government starts to build hundreds of thousands extra houses each year, demand will always outstrip supply … so maybe a time for Huddersfield landlord investors to bag a bargain?

Want to know where those Huddersfield buy to let bargains are?  Follow my Huddersfield Property Blog or drop me an email because irrespective of which agent you use, myself or any of the other excellent agents in Huddersfield, many local landlords ask me my thoughts, opinion and advice on what (and not) to buy locally … and I wouldn’t want you to miss out on those thoughts ... would you?

20% Less Huddersfield Home Owners Wanting to Move Than 12 Months Ago

As I have mentioned a number times in my local property market blog, with not enough new-build properties being built in Huddersfield and the surrounding area to keep up with demand for homes to live in (be that tenants or homebuyers), it’s worrying to note that less Huddersfield home sellers are putting their properties on to the market than a year ago… or is it a worry?

At the start of 2007, there were 868 properties for sale in Huddersfield, but by September 2008, when the credit crunch was really beginning to bite, that number had risen to 1,318 properties on the market at a time when demand was at an all-time low, thus creating an imbalance in the local property market.

Basic economics dictates that if there is too much supply of something and demand is poor (which it was in the Credit Crunch years of 2008/9) … prices will drop. In fact, house prices dropped between 15% and 20% depending on the type of Huddersfield property between the end of 2007 and Spring 2009.

However, over the last five years, we have seen a steady decrease in supply of properties coming onto the market for sale and steady demand, meaning Huddersfield property prices have remained robust.  A stable housing market is one of the foundations of a successful British economy, as it’s all about getting the healthy balance of buyer demand with a good supply of properties.

Around the UK, over 85% of towns in the UK have seen an increase in the number of properties for sale from a year ago, stunting their local property markets. However, there were 677 properties for sale 12 months ago, and today that stands at 540, meaning there are 20% less properties for sale in Huddersfield today than a year ago, meaning the property market is holding its own locally.

   

Even better news, since the Chancellor announced the stamp duty rule changes for first time buyers (FTB), my fellow agents in Huddersfield say that the number of FTB’s registering on the majority of agent’s books has increased year on year. That has still to follow through into more FTB’s buying their first home, however, with the heightened levels of confidence being demonstrated by both Huddersfield house buyers and those potential FTB house buyers, I do foresee the Huddersfield Property Market will show steady yet sustained improvement during the first half of 2018.

What does this mean for Huddersfield landlords or those considering dipping their toe into the buy to let market for the first time? Landlords will need to keep improving their properties to ensure they get the best tenants. It is true demand amongst FTB’s is increasing, albeit from a low base, so that will play a small factor in demand. Even with the new landlord tax rules, buy to let in Huddersfield still looks a good investment, providing Huddersfield landlords with a good income at a time of low interest rates and a roller coaster stock market.

If you are thinking of investing in bricks and mortar in Huddersfield, it is important to do things correctly as making money won’t be as easy as it has been over the last twenty years.  With a fewer number of properties on the market .. comes less choice. Don’t buy the first thing you see, buy with your head as well as your heart … and don’t forget the first rule of Buy To Let Investment …..

I will tell you that 1^st rule in a couple of weeks!

Huddersfield Property Market Worth More Than TUI

The value of all the homes in Huddersfield has risen by more than 237% in the past two decades, to £10.463bn, meaning its worth more than the stock listed tourism company TUI AG, which is worth £9.116bn.

Those Huddersfield homeowners and Buy-to-Let landlords who bought their homes twenty or more years ago have come out on top, adding thousands and thousands of pounds to the value of their own Huddersfield homes as the younger generation in Huddersfield continue to be priced out of the market.  This is even more remarkable because, in those twenty years, we had the years of 2008 and 2009 following the global financial crisis, where we saw a short term drop in Huddersfield house prices of between 15% and 20% (depending on the type of property). And although there have been a number of consecutive years of growth in property values recently in Huddersfield it hasn’t been anywhere near the levels seen in the early 2000’s.

Twenty years ago, the total value of Huddersfield property was worth £3.096bn. Over those twenty years, total property values have increased by £7.367bn, meaning today, the total value of all the properties in Huddersfield is worth £10.463bn. Even more remarkable, when you consider the FTSE100 has only risen by 40.84% in the same time frame. Also, when I compared it with inflation, i.e. the UK Retail Price Index, inflation had risen by 72.2% during the same twenty years.

So, what does this all mean for Huddersfield?  Well as we enter the unchartered waters of 2018 and beyond, even though property values are already declining in certain parts of the previously over cooked central London property market, the outlook in Huddersfield remains relatively good as over the last five years, the local property market has been a lot more sensible than central London’s.

Huddersfield house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with persistent immigration and population growth.  Secondly, with 0.25% interest rates, borrowing has never been so cheap and finally, the simple lack of new house building in Huddersfield. Not even keeping up with current demand, let alone eating into years and years of under investment mean only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Huddersfield has and always will, out ride out the storm.

In the coming weeks, I will look in greater detail at my thoughts for the 2018 Huddersfield Property Market. As always, all my articles can be found at the Huddersfield Property Market Blog  https://huddersfieldproperty.blogspot.co.uk/ 

Huddersfield Council Tax Payers Stung by 20.17% above Inflation Rise

Buying and selling a home in Huddersfield isn’t the easiest or cheapest thing you will ever do. Estate Agent fees, Solicitors fees, Survey fees, Mortgage fees, Removal Van … the costs just mount up throughout every step of the move. Last week, a Huddersfield landlord asked me whether the Council Tax Band made a difference to a property’s appeal, be it tenanted or to owner occupiers, when it comes to being sold on the open market and whether extensions or improvements made a difference to the tax banding?

Well, like I said, the first point you should always be aware of is what Council Tax Band your new house or apartment will fall under. Being aware of this before you buy/move will help when planning month by month for life in your home (or investment). But what exactly are Council Tax Bands, and how do they affect landlords/tenants/homebuyers?

How much Council Tax you pay depends on two variables. The first is which Council Tax Band your property is in. A property is placed into a specific band depending upon what the value of the property was in April 1991 – the date when the tax band system was applied. In a nutshell, what your property is worth today has no relevance whatsoever to your banding.

Council Tax Bands have a letter of the alphabet and range from bands A-H.

The Council Tax Band values are:

Band A – up to £40,000

Band B – £40,001 to £52,000

Band C – £52,001 to £68,000

Band D – £68,001 to  £88,000

Band E – £88,001 to £120,000

Band F – £120,001 to £160,000

Band G – £160,001 to £320,000

Band H – more than £320,000

So, for example, if a property sold for £110,000 in April 1991 but is now worth £350,000 it will remain in Band E – NOT Band H), as this was the value when the bands were set in 1991. For new homes, the same thing applies: they are valued based on the 1991 market value. This safeguards that all homes and all buyers are treated equally and consistently. The second factor that determines how much Council Tax you pay is what each individual local authority decides each band will pay in Council Tax. (So for example, a householder/tenant in Leeds in a Band E property will pay a different amount in Council Tax each year to someone in Swindon or North London in Band E).

Interestingly, the average current level of Council tax paid by Huddersfield people stands at £1,028 per annum, up from £450 in 1993 (although if it had risen by inflation in those 25 years .. today that should only be £856) … meaning Council Tax has outstripped inflation by 20.17%. So unless the local authority changes its majority political party, the only way you can change the amount you pay in Council Tax is your banding i.e. you physically move to a higher or lower band.

Contrary to what most people think, extensions and improvements do not change the Council Tax Band and existing householders/tenants only have to pay the same Council Tax as they would have without any extensions and improvements. However, the Valuation Office (The Government’s Property Valuers) do reserve the right to re-value the extended property if the property gets sold.  If you are a potential buyer, you should be aware of this review as it could change the amount of Council Tax you pay after the purchase. If a higher band is necessary, the new band will be based on what the extended property would have been expected to sell for in 1991. However, this does not necessarily mean that the banding will jump one band, as this is contingent on the extent of the changes and whether the property falls towards the top or bottom of its existing band. More often than not – it isn’t an issue and the banding stays the same.

In terms of which band the property is in, this can be challenged. In my experience in the Huddersfield property market the only issue is one where there is an anomaly with the banding, when one property is in a different band to all the others in the street. This is much rarer than it used to be, as most such anomalies have been found and rectified. Anyone can check the banding of any property by going to Google and typing in “Check My Council Tax Banding”. I do need to mention a thoughtful warning though. Challenging your Council Tax Band is not something to do on a whim for one simple fact - you cannot request your band to be lowered, only 'reassessed', which means your band could be moved up as well as down. I have even heard of neighbouring properties band’s being increased by someone appealing, although this is the exception. If you have any questions don’t hesitate to drop me a line.

Homeownership Amongst Huddersfield’s Young Adults Slumps to 50.71%

The degree to which young Huddersfield people are locked out of the Huddersfield housing market has been revealed in new statistics.

A Huddersfield landlord was asking me the other week to what effect homeownership rates in Huddersfield in the early to middle aged adult age range had affected the demand for rental property in Huddersfield since the Millennium. I knew anecdotally that it affected the Huddersfield rental market, but I wanted some cold hard numbers to back it up. As you know, I like a challenge when it comes to the stats.. so this is what I found out for the landlord, and I’d like to share them with you as well.

As anyone in Huddersfield, and most would say those born more recently, are drastically less likely to own their own home at a given age than those born a decade earlier, let’s roll the clock back to the Millennium and compare the figures from then to today.

In the year 2000, 51.4% of Huddersfield 28-year olds (born in 1972) owned their own home, whilst a 28 year old today born in 1990) would have a 27.4% chance of owning their own home. Next, let’s look at someone born ten years before that. So, going back to the Millennium, a 38 year Huddersfield person (therefore born in 1962) would have a 75.8% chance of owning his or her own home and a 38 year today in Huddersfield (born in 1980) would only have a 59.0% chance of owning their own home.

Since the Millennium, overall general homeownership in the 25 to 44 year old age range in Huddersfield has reduced from 70.13% to 50.71%

If you look at the graph below, split into the four age ranges of 25 year olds (yo) to 29yo, 30yo to 34yo, 35yo to 39yo and finally 40yo to 44 yo, you will quite clearly see the changes since the Millennium in Huddersfield. The fact is the figures in Huddersfield show the homeownership rate has proportionally fallen the most for the youngest (25yo to 29yo) age range compared to the other age ranges.

The landlord suggested this deterioration in homeownership in Huddersfield across the age groups could be down to the fact that more of those born in the 1980’s and 1990’s (over those born in the 60’s and 70’) are going to University and hence entering the job market at an older age or those young adults are living with their parents longer.

I read some national homeownership statistics of different age groups with the same number of years after they left education (rather than at the same age) and that gave an identical dip to the graph above.  Neither are these drops in homeownership related with a significant increase in the number of young adults living with their parents. Again, nationally, that has hardly changed over the last 20 years as the percentage of 30-year-olds living with Mum and Dad only increased from 22% of those born in the early ‘70s to 23% of those born in the early ‘80s.

So, what does this mean for the rental market in Huddersfield?

Only one thing .. with the local authority not building Council houses, Housing Associations strapped for cash to build new properties and the younger generation not buying, there is only one way these youngsters can obtain a roof over their head and have a home of their own .. through the private landlord sector. Now with the new tax rules and up and coming licensing rules, Huddersfield landlords will have to work smarter to ensure they make the investment returns they have in the past. If you ever want to pick my brains on the future direction of the Huddersfield rental market .. drop me line or pop in next time you are passing my office.