Are the Tory’s Selling Off the Final Part of the Family Silver? 2,610 Huddersfield Housing Association Households & the Right to Buy Their Homes

In 1979, Margaret Thatcher was voted in on a Tory landslide with the ‘right to buy your own council house’ being a mainstay of Conservative policy. She encouraged people to buy their own their own council flats and houses, although it might interest you to know, that the council tenant right to buy idea was first proposed in the late 1950s and formed part of the manifesto of the Labour party. Yet Maggie’s version was based on massive discounts for tenants and 100% mortgages (i.e. no deposit). However, the real bugbear was that half the monies raised form the house sales went to central Government and the other half to the local authorities … but that money had to be used to reduce the local authorities debt rather than building new houses - so houses were being sold and not replaced.

12,305 council homes in the Kirklees area have been

bought in the last 40 years (an average 308 per year)

Interestingly, the Tories relaxed the rules in 2012 for right to buy and raised the highest discount on a property to £75,000 (it has subsequently increased further, to £100,000, in some parts of the UK) meaning 893 council houses have been sold locally since the rule change, raising £47,491,103 since 2012 alone.

The issue, stated by many existing council house tenants, is that those tenants turned homeowners subsequently sell on their ex-council homes at a huge a huge profit, meaning the demographics of those areas has become ever more transient, more specifically, properties that were once council homes are now owned by buy-to-let landlords who rent them out on a short-term basis.

Yet up to this point in time, nothing has been said about ‘other’ type of social housing - housing association properties. Whilst council houses are properties owned by the local authority providing low cost social housing, housing associations also provide lower-cost social housing for people in need of a home, yet they are private, non-profit making organisations.

The Tory’s state one of the biggest divides in our British society is between those who can and cannot afford their own home, so plan to establish a new national model for shared ownership which allows people in new housing association properties to buy a proportion of their home while paying a lower/subsidised rent on the remain part - helping thousands of lower income earners get a step onto the housing ladder. 

So, what for the tenants of the existing 2,610 housing association households in Huddersfield? The Conservatives have said they will work with housing associations on a voluntary basis to determine what right to buy offer could be made to those Huddersfield tenants, although there are already existing rules which give most housing association tenants the right to buy their home, yet with only modest discounts of £9,000 to £16,000 depending on where you live. So, what does all this mean for the current homeowners and landlords of Huddersfield properties?

The Tory’s sold off 6,280 council houses in Kirklees whilst in power between 1979 and 1997

This really created waves in the housing market in the 1980’s and was a contributary factor to the housing crash of 1987 when Dual-MIRAS tax relief was removed by Nigel Lawson. By the selling off of council housing in those years they were accused of selling off the family silver cheaply, thus created the foundation of the buy-to-let boom of the early to mid 2000’s, because of major shortage of affordable housing being sold in the previous two decades.

Yet this time round, note the Tory’s state it is just for new housing association properties, not existing. Also, that tenants will have the right to go into shared ownership - NOT OUTRIGHT OWNERSHIP. This means this policy will have hardly any effect … unlike the Thatcher policies of 1979.

Huddersfield Buy to Let – Past, Present and Future

Investing in a Huddersfield buy to let property has become a very different sport over the last few years.

In the glory days of the five years after the turn of the Millennium, where we had double-digit house price growth, mortgage companies (notably Northern Rock, HBOS and their ilk) desperate to get on the buy to let mortgage bandwagon with rates so low it would make the belly of a snake seem high and an open mildness to give loans away with not so much more than a note from your Mum and with hardly any regulatory intervention… anyone could make money from investing in property – in fact it was easier to make money than fall off a log! Then we had the unexpected flourish of the property market, with the post credit crunch jump in the property market after 2010, when everything seemed rosy in the garden.

Yet, over the past five years, the thumbscrews on the buy to let market for British (and de facto) Huddersfield investors have slowly turned with new barriers and challenges for buy to let investors. With the change in taxation rules on mortgage relief starting to bite plus a swathe of new rules and regulations for landlords and mortgage companies, it cannot be denied some Huddersfield landlords are leaving the buy to let sector, whilst others are putting a pause on their portfolio expansion.

With the London centric newspapers talking about a massive reduction in house prices (mainly in Mayfair and Prime London – not little old Huddersfield) together with the red-tape that Westminster just keeps adding to the burden of landlords’ profit, it’s no wonder it appears to be dome and gloom for Huddersfield landlords … or is it?

One shouldn’t always believe what one reads in the newspaper. It’s true, investing in the Huddersfield buy to let property market has become a very different ballgame in the last five years thanks to all the changes and a few are panicking and selling up.

Huddersfield landlords can no longer presume to buy a property, sit on it and automatically make a profit

Huddersfield landlords need to see their buy to let investments in these tremulous times in a different light. Before landlords kill their fatted calves (i.e. sell up) because values are, and pardon the metaphor, not growing beyond expectation (i.e. fattening up), let’s not forget that properties produce income in the form of rent and yield. The focus on Huddersfield buy to let property in these times should be on maximising your rents and not being preoccupied with just house price growth.

Rents in Huddersfield’s private rental sector increased

by 2.02% in the past 12 months

Rents in Huddersfield since 2008 have not kept up with inflation, it is cheaper today in REAL TERMS than it was 11 years ago and some landlords are beginning to realise that fact with our help.

Looking at the last few years, it can be seen that there is still a modest margin to increase rents to maximise your investment (and it can be seen some Huddersfield landlords have already caught on), yet still protect your tenants by keeping the rents below those ‘real spending power terms’ of the 2008 levels.

Buy to let must be seen as a medium and long-term investment ….

Rents in Huddersfield are 6.66% higher than they were 3 years ago and property values are 11.49% higher than Jan 2016

…and for the long term, even with the barriers and challenges that the Government is putting in your way – the future couldn’t be brighter if you know what you are doing.

Investment is the key word here… In the old days, anything with a front door and roof made money – yet now it doesn’t. Tenants will pay top dollar for the right property but in the right condition. Do you know where the hot spots are in Huddersfield, whether demand is greater for 2 beds in Huddersfield or 3 beds? Whether town centre terraced houses offer better ROI than suburban semis? With all the regulations many Huddersfield landlords are employing us to guide them by not only managing their properties, taking on the worries of property maintenance, the care of property and their tenants’ behaviour but also advising them on the future of their portfolio. We can give you specialist support (with ourselves or people we trust) on the future direction of the portfolio to meet your investment needs (by judging your circumstances and need between capital growth and yields), specialist finance and even put your property empire into a limited company.

If you are reading this and you know someone who is a Huddersfield buy to let landlord, do them a favour and share this article with them – it could save them a lot of worry, heartache, money and time.

Huddersfield Property Values 2.6% Higher Year-on-Year

It seems that quite a few Huddersfield homeowners and Huddersfield landlords have become acclimatised to living with the uncertainty of Brexit throughout most of 2019, as figures show many of them decided to get on with living life, started reinvesting their money into Huddersfield property and buying and selling their Huddersfield homes and BTL investments. Land Registry stats confirm that. Current data shows that...

Huddersfield property values are 2.6% higher than 12 months ago

Whilst the newspapers were stating prime central London property values were now 17% below the levels being achieved a couple of years, that message seems not to have been heard by certain sectors of the Huddersfield property market!

Speaking with other property professionals in Huddersfield, many weren’t expecting the usual autumn rebound after the summer holidays. Many were anticipating a dormant Huddersfield property market on the run up to Christmas believing many Huddersfield home-movers would put off the their home moving activities until the new year, yet in many sectors of the local property market, I have seen (and the stats back this up) that those Huddersfield property buyers who are able to hold their nerve (whereas others were hesitant) have found themselves in a better negotiating position to get a great property deal. Putting aside the fluff of newspaper headlines, the real foundations of Huddersfield housing market remain sound with record low unemployment, ultra-low interest rates and low inflation.

Interestingly, there are 6% less homes for sale in Huddersfield compared to two years ago

However, there are still parts of the Huddersfield property market that remain stagnant, with some homeowners being slightly unrealistic with their marketing pricing. To them, the property market appears to be slow, as they stare at their ‘for sale’ board for months on end, yet nothing could be further from the truth.

The key to a balanced (and healthy) property market is realistic pricing by the homeowners when they place the property on the market, mortgage affordability for buyers (which was discussed a couple of weeks ago in the Huddersfield Property Blog) and buy to let landlord activity which creates and maintains forward momentum. One measure of momentum is how long a property remains on the market, and interestingly…

The current average length of time a Huddersfield property remains on the market is 94 days, slightly down from 96 days two years ago

Now the number of properties sold locally is slightly down year on year (even though we had a burst of property sales in the summer locally) and interestingly, Rightmove reported recently that nationally, the number of properties sold in the UK was only just over 3% less year on year, so a similar picture nationally.

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

We have always had issues that were game changers for the housing market; for the last few years it’s been Brexit, 10 years ago the credit crunch, 18 years ago the dot com crash, the ERM and 15% interest rates issue 27 years ago, dual MIRAS 32 years ago, hyper-inflation 40 years ago, the 3 day week 45 years ago – the list goes on. Everyone needs a home to live in, the local authority just has not got the money to build council houses, so buy to let will continue to grow for the foreseeable future which in turn creates a stable foundation for all homeowners. Maybe you should use this time, like many are in Huddersfield to take advantage of the property deals to be had in Huddersfield.

The money to buy a new iPhone11 represents just under a fifth of a Huddersfield first-time buyers mortgage deposit

Many mature readers of this Huddersfield property market blog will remember buying their first home as 20 or 30 somethings, probably in Huddersfield many years ago, yet read the newspapers now and feel it is all doom and gloom for todays’ first-time buyers.

So, I wanted to look at the facts, instead of newspaper headlines.

Back in 1995, the average Huddersfield first time buyers house cost £23,990, whilst official figures state today it is £83,600

So, looking at today’s property prices, it could be perceived that owning a home is beyond the reach of most Huddersfield first time buyers and that renting is the only way for younger members of Huddersfield society to have a roof over their head .. or is it?

100% mortgages (so no deposit needed to be saved) were rife in the 2000’s and Northern Rock were famous for their 125% mortgages (i.e. you borrowed 25% more than what you were paying for the house, again with no deposit). Yet when the credit crunch hit in 2008 such mortgages disappeared overnight – ending the dream of homeownership for many. Yet would it surprise you to hear that 95% mortgages (i.e. the first-time buyer would need to save a 5% deposit) have been available since late 2009 and 100% mortgages (i.e. no deposit) were made available in 2016.

It is £77 per month cheaper to buy a typical Huddersfield first-time buyer home than to rent the equivalent property.

Prospective Huddersfield first-time buyers could make a saving of £926 per year on average if they moved from renting to owning. My calculations assume that first-time buyers raise a deposit of just 5 per cent and make mortgage payments over 35 years with the Barclays 95% mortgage with a fixed interest rate of 2.48 per cent interest. At this level…

Today, the average deposit needed by a

Huddersfield first-time buyer is £4,180

Those able to raise that deposit, would pay £295 pm on average in mortgage payments, while the average rent for the same property would be £372 pm and the household income to support such a mortgage would only need to be from £17,376496 pa.

Of course, buying your first home is a massive financial commitment and investment with up-front costs to ponder on, yet long-term the financial benefits can be substantial. With annual savings of £926 a year, this can really mount up over time and, of course, once the mortgage is paid off, one will have a valuable asset.

Yet, the elephant in the room is the raising of the 5% deposit

Well most first time buyers, even most of you who are now in your 50’s and 60’s may have used the Bank of Mum and Dad to help with the deposit, yet it’s only fair that most parents still expect their offspring to contribute to the deposit and this is where it comes down to choice. I have spoken to many of my friends and family to reconfirm my initial thoughts that it comes down to priorities and choices in life. To save the deposit mentioned above, sacrifices are required to save that amount of money.

According to a survey in 2018, the average millennial goes out two nights a week and spends on average £63.36 per night out, that’s nearly £6,600 per year - a very expensive hobby. Nearly a third of millennials surveyed had smashed their mobile phone in the last 12 months. Then there is the obsession of having the latest tech, with the need to constantly be upgrading one’s mobile phone. In fact, the cost of the brand new iphone11, recently released, is just shy of £900. Even those on contracts can expect to pay upwards of £80 per month for the newest phone upgrade, yet if they kept their old phone after two years, a sim only deal with the same minutes and data would set them back no more than £25 per month … it comes down to choices. Save for a deposit and reduce your expenditure on socialising and mobiles etc and have a valuable asset at the end of your mortgage or continue as you are.

I am not here to make a judgement – everyone is free to make their own choices in life – all I am doing is highlighting the real situation - so you are aware of the full story.

Is This the End of No-Fault Section 21 Evictions for the 28,364 Huddersfield Tenants?

In the late spring, the Government announced that they were planning to end no-fault evictions for tenants living in private rented accommodation.

I have had a number of Huddersfield landlords contact me anxious that removing a tenant from their Huddersfield buy-to-let property in the future had possibly become a lot more problematic. Yet, at the launch of the consultation on the changes to the piece of legislation relating to no-fault evictions (called the Section 21 amendments), the Government wanted to assure British landlords that they would be protected by the bolstering of the existing Section 8 legislation. The current Section 8 allows landlords grounds for recovery of their properties for reoccupation of the landlord, non-payment of rent and other legitimate factors.

12,973 Huddersfield landlords are affected by this

 potential change in the law

Yet, it is comforting for Huddersfield landlords and tenants in the fact that most competent letting agents very rarely have to evict a tenant. In the worst-case scenarios the tenant needs evicting (normally because rent hasn’t been paid) or because the landlord is either selling their buy-to-let investment or moving back into their property. Look at the consultation - it has been indicated that those grounds will not be removed from section 8 powers during the government’s consultation and the talk is they will be bolstered and improved. To put the removal of Section 21 notices into some context…

Only 22,527 section 21 notices made it to Court last year, out the 4.5million private rented households

Scotland banned no fault evictions (i.e. their own version of a Section 21) two years ago, and the model suggested by Westminster is similar to that of the new Scottish system. Landlords, tenants and agents have had to adapt north of the border, and there hasn’t been the mass exodus of landlords from the market since then.

Yet the call in the lettings and legal profession is … if the Government is intent on making these changes, we need well-funded courts which specialise in housing and tenancy matters (like there are for family law and children). Especially when the landlord manages the property themselves (without an agent), the issue of eviction comes about from a breakdown in communication between landlord and tenant. The courts could use their mediation skills to make it simpler and faster for tenants and landlords to obtain quick and available justice instead of the existing drawn out procedures under Section 8, which helps no one (not even tenants). This is important as the demand for Huddersfield rental properties is growing and people need a home to live in – fact.

Huddersfield needs an additional 618 buy-to-let properties per year

for the next decade to meet the demand from Huddersfield tenants

As an agent in Huddersfield, I know most Huddersfield landlords consider buy-to-let in Huddersfield as a long-term investment, with the average landlord looking to retain their buy-to-let property for at least 10 years and beyond. Talking to other agents around the country, over 90% of Section 21 notices are made by the tenant, not the landlord. Removing the Section 21 notice could affect tenants more than landlords.

Replacing Section 21 with a process that requires a landlord to firstly have a good reason, and secondly go through due process, will likely remove the more unprincipled landlords from the property market. That is great news as those unprincipled landlords will either sell their properties to new buy-to-let Huddersfield landlords, or to tenants who want to buy them. So, it could be a small win for people looking for a new Huddersfield home, and a disappointment for unprincipled landlords simply looking for a cash cow ‘have no care about the property or tenant’ investment vehicle.

If you are a Huddersfield landlord and want to know more about this, whether you are a landlord of ours, a Huddersfield landlord with another Huddersfield agent or a self-managing landlord, feel free to drop me a line or pick up the phone (I don’t bite) to chat about the implications of this and other legislative changes that are on the horizon.

Mending the Broken Huddersfield and Kirklees Property Market

The long-lasting issue of the Huddersfield and Kirklees property market are laid bare as the final 2018 property transaction figures have just been published and they continue the post credit crunch trend of less people moving.

37.7% less of Huddersfield and Kirklees people are selling their homes annually since the credit crunch, when compared to the post Millennium years of 2000 to 2005

This is not just an issue of the Huddersfield and Kirklees housing market slowing down since the credit crunch - the challenge is to split out shorter-term factors such as Brexit and the elections from longer-term structural issues of the UK society, because when these most recent property transaction figures are seen against longer-term trends for Huddersfield and Kirklees, they suggest more significant issues in the Huddersfield and Kirklees housing market.

In the late 1990’s, 6,487 properties were sold annually in the Huddersfield and Kirklees area, then in the same area, the Millennium boom saw transactions rise to 8,836 per annum. Property sales then more than halved to 4,286 per annum in the challenge of the global financial crash and subsequent retrenchment of the mortgage market. Post credit crunch (2012 and beyond) locally, on average, 5,509 properties have sold annually.

So, whilst there was a recovery from 2013 onwards, it was rather uninspiring when compared to the pre-credit crunch years, with a lacklustre performance in property transactions since mid 2010’s.

You might ask why we should be concerned about the number of property transactions and not the change in property values?

The number of transaction numbers are a far more exact bellwether for the health and potency of the local housing market.

As less people have been selling their homes locally, this is not only bad for the Huddersfield and Kirklees housing market but for the economy locally, especially when you consider how many allied businesses (builders, decorators, solicitors, removal vans, estate agents, mortgage arrangers and other people) lose out as a result.

Some say the deficiency of supply of property, mainly affordable first-time buyer property, is the chief reason why transaction figures remain stubbornly low. Others suggest the absence of suitable housing stock up the property ladder (particularly bungalows for the older generation), combined with rising demand, is causing a bottleneck in our local housing market.

I know there has been much talk from Westminster about grand home-building programmes, yet we now require them to deliver on these undertakings and even then, it will be a few decades before we see a seismic change in the Huddersfield and Kirklees property market.

In the short-term, a quicker improvement may come from modifications to stamp duty. First time buyers don’t need to pay Stamp Duty up to a certain level, yet those Stamp Duty concessions could be extended to those mature homeowners looking to downsize. This could liberate a meaningful number of mature family homes occupied principally by these mature generation and the tax lost through Stamp Duty could be replenished by a revaluation of the Council Tax bands?

Council Tax bandings were set in 1991 and the seven bands, the highest band starts at £320,000 (based on 1991 values). It seems irrational to us that upper value band, set in the 1991 revaluations, has not been increased, particularly as house prices in London have risen by over 400 per cent during in the last 25 years.

That would mean higher tax for those who don’t move yet less tax for those that do move – because we believe it would boost a far more liquid Huddersfield and Kirklees property market.

Just a thought of mending the local property market – what are your thoughts?

How long is an average Huddersfield property on the market for?

If you are either selling or buying a property in Huddersfield, there are a few reasons why it may be taking some time to sell your Huddersfield home or find that perfect place to call your new home. It may be taking longer than you thought to find a buyer for your home because of the current state of the property market or finding that perfect Huddersfield home may be taking too long because of a lack of properties to buy.

So, taking everything into consideration, all of these factors invite an obvious question; how long is too long to persist in the Huddersfield property market?

If you are looking to sell your Huddersfield property, it may have become infuriating when your home has been on the market for longer than you anticipated. Perhaps the property market is purely in a position where it's challenging to get a property sold quickly, or sold at the price you want to achieve for it. If you do live in a Huddersfield home that is towards the upper reaches of the price band, you have to be open to the idea that because it's worth so much more than the average property in Huddersfield and so more than most individuals can afford, you will have to wait longer to get it sold.

Your Huddersfield home might be taking longer to sell because your asking price is simply too high. Even if you are prepared to take a realistic offer, if you have an unrealistic asking price your overpriced Huddersfield property will undoubtedly turn off potential buyers from even being inclined to book a viewing.

Looking at the market in Huddersfield compared to a year ago makes very interesting reading…

When it comes to the average length of time on the market, it’s the detached, semi-detached and apartments in Huddersfield that appear to be taking longer to sell, yet the length of time Huddersfield terraced homes seem to be on the market has dropped.

The overall average length of time a Huddersfield property remains on the market has risen by 13.8%, from 96 days a year to 109 days today

The question that remains is, if you are having no luck selling should you leave your Huddersfield property on the market or not? This is basically down to your personal circumstances - a big decider has to be if you are moving up market or downsizing.

Buyers will compare your Huddersfield property to all the other homes on the market using the portals such as Rightmove, On the Market and Zoopla and even if your asking price is realistic, if your marketing (brochures, pictures, even video walk through) isn’t top dollar, they will dismiss your property.

Remember, the average buyer only views 4.5 properties before they buy and on average, each buyer will only spend just over 25 minutes viewing each home  …

The more properties that are on the market, the greater the choice for buyers (yet more competition for house sellers), so we wanted to look at how many homes were for sale in Huddersfield now, compared to 12 months ago.

As you can see, there are hardly any differences between the property types in Huddersfield.

	12 months ago	Now	Percentage Change
Huddersfield Detached	129	132	2.3%
Huddersfield Semi	179	195	8.9%
Huddersfield Terraced/Town House	240	230	-4.2%
Huddersfield Apartment	102	100	-2.0%
Overall Huddersfield Average	650	657	1.1%

As for buying a Huddersfield property, searching for that dream house can take time as you have to consider the needs of your spouse, children, schooling, etc., what you can realistically afford and whether your current location can accommodate you until you find that perfect Huddersfield home.

Don’t forget that upwards of 10% of homes do not make it to the portals (the portals are Rightmove, Zoopla and On the Market), so don’t just rely on the portals to let you know what is coming on the market. The number of times I speak to disappointed buyers who missed out because other buyers registered directly with the agent for property, whilst they relied on the portals.

When it comes to buying a Huddersfield home, and so you do not make any decisions you will regret later on, taking your time is always the more practical option. The amount of money that is involved in buying a home and all the costs connected with it means that you should not rush into buying or selling without due consideration.