Huddersfield Property Market Holding Up Despite Doom and Gloom in the Newspapers

The Huddersfield housing market over the last three months is now becoming more ‘normal’ after the last couple of years of insane demand when the lockdowns started a race for space!

Even with the blackening economic doom-mongers forecasting a harsh slowdown in the British property market, the number of people buying and selling their homes is still very good for the time of year.

 

Whilst many homeowners are reducing their asking prices, it is not the 20% (some even said 30%) drop some property commentators and newspaper journalists had predicted.

 

Looking at the stats for Huddersfield for the last three months since the disastrous Truss mini budget – they make good reading.

 

Of the 250 Huddersfield properties that have sold (stc) since late September, the average length of time it took to achieve a sale was 44 days.

 

Interesting when you split it down by price, in Huddersfield:

 

·         Under £100k – 59 days

·         £100k to £200k – 27 days

·         £200k to £300k – 81 days

·         £300k to £400k – 34 days

·         £400k to £500k – 91 days

·         £500k to £1m – 103 days

·         £1m and above – 73 days

 

And by type:

 

·         Huddersfield Apartment/Flat – 62 days

·         Huddersfield Terraced/Townhouse – 44 days

·         Huddersfield Semi-Detached – 29 days

·         Huddersfield Detached – 70 days

 

The latest sold price data from the Land Registry shows that Huddersfield house prices currently remain 12.1% higher than they were 12 months ago; the rate of growth has dropped significantly.

 

Last month, Huddersfield house prices rose by 1.3%; thus, we are seeing the first sign that the property market is starting to cool.

 

With interest rates at 3.5% and further increases likely in 2023, that will undoubtedly spur ongoing cooling in Huddersfield property values yet it’s doubtful we will see the Huddersfield property market go into the deep freeze that many doom-mongers were predicting.

 

As I said in recent articles on the Huddersfield property market, we will see a 5% to 10% reduction in Huddersfield house prices over the next 12 to 18 months.

 

That will only take us back to the prices achieved in mid/late 2021 or early 2022 (depending on the property type).

 

Landlords have experienced double-digit rent growth in the last 12/18 months with a shortage of rental properties coming onto the market. I cannot see this changing in the short term, so I expect rents to be a further 10% higher by Christmas 2023.

 

Last week I stated it is not always wise to only focus on house prices but also take reference from the number of property transactions completed that feed the fire of the British property market.

 

For example, in March 2021, 135,670 properties sold, yet a month later, it dropped to 87,600. A couple of months later, it rose again in June 2021 to 165,290 homes sold (for it to drop to 64,000 in July).

 

Whilst this is good news for estate agents and removals companies, it can skew the property market and put undue pressure on the property market (pressure which could cause a housing crash if not put under check).

 

Like most things - slow, steady and consistent is the preferred option for the property market.    Throughout 2022, the number of properties selling in the UK has been a steady average of 68,832 per month, ranging from a low of 61,800 in January 2022 to 72,200 in July 2022.

 

This consistency will continue into 2023 and a return to a more 'normal' housing market.

 

One final thing I have noticed about the Huddersfield property market in the last six months is the number of larger properties coming onto the market that last sold over 25 years ago.

 

Homeowners in their 20s, 30s and early 40s tend to move every five or six years, yet when they reach their late 40s and 50s, they tend to stay put for longer. These properties only tend to come on the market when people pass away or must be sold for nursing home fees.

 

These mature homeowners are downsizing for several reasons. Their children have flown the nest and they’re rattling around in homes with accommodation they don’t need. Many are being driven to sell their large homes in light of mounting energy bills, high inflation and never-ending maintenance costs that larger properties demand.

 

The second reason is that the recent rises in Huddersfield house prices has meant the money released to downsize has grown, meaning if these mature homeowners sell up and cash in to more manageable properties, the amount of money released is quite impressive.

 

In conclusion, 2023 is going to be a more 'normal' year, akin to the 2016 to 2019 years. Huddersfield homeowners need to be realistic with their pricing, yet as over eight out of ten sellers buy another home, the one you buy will be lower.

 

If you are considering selling your Huddersfield home in 2023 and would like a chat about your options, feel free to drop me a line or call the office.

 

Yours Sincerely

 

Chan Khangura BA (Hons) DipRLM MARLA MNAEA

Proprietor & Managing Director Whitegates Estate Agents Huddersfield & Brighouse

https://huddersfieldproperty.blogspot.com/

Huddersfield tenants face further rent hikes, as the number of available rental homes drops by 65%

 

·        The number of properties available to rent in Huddersfield has dropped from 1,183 to 412 since February 2020.

 

·        The average rent a tenant has had to pay in Huddersfield has risen from £681 to £715 since February 2020.

 

·         Many Huddersfield landlords have cashed in on the post-lockdown property boom of the last two years and sold their properties to owner-occupiers - not fellow landlords.

 

·         The supply of Huddersfield rental property isn't near what is needed, which is of benefit to Huddersfield landlords rather than Huddersfield renters. 

 

The Huddersfield rental property shortage is currently very evident. In this article, I will investigate why there is such a significant lack of homes available for rent across Huddersfield and what it means for buy-to-let investors.

 

Anybody who enjoys surfing the property portals (Rightmove, Zoopla and On the Market) will have observed an emerging trend that the number of properties available to rent in Huddersfield has dropped considerably in the last couple of years.

 

This reduction has been seen all around the UK as well. For example, on 1^st November 2020, there were 372,931 properties to rent on portals. By the 1^st November 2021, that had dropped to 275,650; by the 1^st November 2022, that had fallen to 171,224.

 

That doesn't mean the number of privately rented homes in the country has dropped by over half. Fewer properties are coming onto the market to rent. I will explain why in this article.

 

 

 

For tenants, especially over the last 12 months, it has become progressively more challenging to find a Huddersfield rental home, thus making the rent they must pay go up. This state of affairs in the property market isn’t showing an indication of getting any easier either, making for a hard time for Huddersfield renters.

 

So, what is the reason behind the Huddersfield rental property shortage, and what does this mean for existing Huddersfield landlords or those potential investors considering buying a Huddersfield buy-to-let property soon?

 

Several different components are making the perfect storm in the UK property market.

 

Firstly, the number of households in the UK.

 

The UK has not been building enough homes for the last 20 years. I appreciate that parts of Huddersfield seem like one huge building site, yet as a country, we are woefully undersupplied with property to live in. This has meant house prices continue to rise due to demand. 

 

The government have known about this issue for decades. The Barker Review of Housing Supply published in 2004 stated that the UK had experienced a long-term upward trend of 2.4% in real house prices since the mid-1970s because of a lack of house building. The report stated that 240,000 houses needed to be built each year to keep up with demand.

The average number of houses built since the mid-1970s has been around

165,000 per year, meaning the UK is short of 3,375,000 houses

(i.e. 45 years multiplied by 75,000 missing homes per year).

 

Several years ago, the government set a target to build 300,000 new homes each year to address this issue.

 

However, in 2019/20, the actual number of homes delivered stood at just 243,770. In 2020/21, the number of properties built dropped to only 216,000 new homes. In a nutshell, there are fewer available homes to buy, meaning fewer available homes to rent. 

 

Secondly, Huddersfield tenants are staying in their rental homes longer.

 

A Huddersfield first-time buyer's average house deposit is £31,212

(the UK average deposit is £53,935).

 

The average rent of a Huddersfield property in November 2022 is £715 per calendar month (up from £681 per calendar month in February 2020).

 

These numbers translate into Huddersfield renters not being able to pay the rent and be able to save for a deposit, or if they are saving, it is taking a lot longer to save for a deposit due to the cost-of-living crisis and higher rent costs.

 

Also, many Huddersfield tenants have decided to stay in their existing rental homes because of the rent rises. Many landlords are less inclined to raise the rent on an existing property when they have a decent tenant who keeps the property in good condition and pays rent on time. Anecdotal evidence also suggests that rent arrears in those properties are dropping as tenants know if they don’t pay the rent, the chances are they will have trouble finding another property, and if they do, they will have to pay a lot for their next rental home. 

 

For Huddersfield landlords, this is all positive news - tenants are staying for longer in their Huddersfield rental properties, arrears are lower, and void periods are less likely. When it comes to the market there is less competition (because of the decrease in the availability of Huddersfield rental properties) so this makes the investment an even better bet.

 

Thirdly, landlords are selling up on the back of recently increased house prices.

 

It would be difficult for Huddersfield buy-to-let landlords to ignore the rising property prices in recent years.

 

The average property value in Huddersfield in the summer of 2022

was 13.7% higher than in the summer of 2021.

 

For some Huddersfield buy-to-let landlords, especially those who were classified as ‘accidental landlords’ (an accidental landlord is a landlord who never chose to become a landlord, it was just after the Credit Crunch of 2008/9, they found themselves unable to sell their property, so they temporarily let their own property out), they chose to ‘cash in’ on the higher house prices. This would have also contributed to the lack of available Huddersfield homes for rent.

 

Yet everything isn’t all sweetness and light for Huddersfield landlords.

 

Landlords have a few costs to consider before investing in buy-to-let, including everything from regular refurbishment costs, buildings insurance, letting agents’ fees, income tax, and, not forgetting, stamp duty.

 

Talking of costs, one issue some Huddersfield landlords are facing is their failure to plan financially for the recent mortgage interest rate rises. Some Huddersfield landlords may have become complacent to the ultra-low Bank of England base rates we have had since 2008 and, therefore, may need to sell their rental property, which, if bought by a first-time buyer, will remove another property from the Private Rented Sector.

 

Another hurdle to jump is the proposed new regulations requiring better energy efficiency for rental properties. It is proposed all new tenancies must have at least a minimum of a 'C’ rating for their EPC (Energy Performance Certificate) from 2025 (and 2028 for all existing tenancies).

 

Therefore, as a buy-to-let Huddersfield landlord, it is wise to do your research to make sure the buy-to-let opportunity is correct for your rental portfolio, particularly when it comes to weathering any impending financial storms. 

 

Landlords need to consider the returns from their

Huddersfield buy-to-let investments.

 

Landlords can earn money from their buy-to-let investments in two ways. One is the property's capital growth, and the other is the rental return (often expressed as a yield). In 96% of buy-to-let investments, there is an inverse relationship between capital growth and yield (i.e. properties that tend to go up in value quicker will have lower yields 96% of the time – and vice versa).

 

Getting the best balance of yield and capital growth depends on your current and future needs from your Huddersfield buy-to-let investment.

 

If you would like me to review your portfolio and ascertain if your existing portfolio will match your current and future needs for the investment - whether you are a client or not, feel free to drop me a line, and we can have a no-obligation chat and possibly organise a review.

 

What does all this mean for the Huddersfield rental market?

 

The continued shortage of Huddersfield rental properties means it will be more difficult than ever to find a Huddersfield property to rent, and so rents will continue to grow.

 

Unlike in Scotland, England and Wales do not have rent controls, with Westminster ruling out the possibility of introducing rent control here to deal with the cost-of-living crisis.

 

You would think rent controls would be a no-brainer, yet economists from around the world have proved for the last 75 years that rent controls might help tenants in the short term, yet ultimately it drives landlords to sell their investments in the long term, thus reducing the stock of available properties to rent out (not great for future tenants).

 

Therefore, it is highly likely that Huddersfield rents

will continue to rise for tenants.

 

Landlords who persevere with their Huddersfield buy-to-let properties or become a Huddersfield buy-to-let landlord are set to benefit because they have an asset in very high demand.

 

The housing shortage, not to mention the other issues discussed above that are affecting the supply of rental properties, is unlikely to be fixed anytime soon!

 

In conclusion, the Huddersfield rental market is a constantly changing picture. What is known is that the supply of rental properties is far from what is needed, which can only be to the benefit of buy-to-let investors rather than of tenants renting.

 

I see buy-to-let as a long-term investment. Everyone reading this knows that the real value in your buy-to-let investment is playing the long game, allowing your Huddersfield buy-to-let investment to grow over time. Like the crypto or stock market, getting sucked in by get-rich-quick schemes that are selling 'apparent quick wins' in property investment is very easy.

 

I regularly highlight the best buy-to-let deals for Huddersfield landlords with all the estate agents (not just my own). You don't need to be a client of mine either to receive that information. Drop me a line or call (without any cost or obligation) if you are interested in making your first Huddersfield buy-to-let investment or considering adding to your existing Huddersfield portfolio.

 

Huddersfield Landlords: Will Huddersfield buy-to-let continue to be profitable in the next few years?

 Being a Huddersfield landlord is undoubtedly a challenge. The glory years of making money from ‘any old property’ are certainly in the past. With increased legislation and taxation from Government and the cost-of-living crisis (which will result in some Huddersfield tenants struggling to pay their rent), times are challenging for many landlords.

Then newspapers are full of stories of landlords being pushed into the red as mortgage rates continue to rise. A landlord last summer could have fixed their 5-year buy-to-let rate with a 25% deposit at 1.86%, whilst today the best 5-year deal is with Barclays at 4.36%. This increase will add more than £246 per month to the landlord's mortgage bill for the average UK buy-to-let property. 

Landlords’ mortgages stand at £237.81bn, meaning collectively, landlords could have to pay an additional £7.11 billion per year in mortgage interest payments.

 

Next, the press is reporting in Q2 2022 (when compared to Q2 2021), landlord possession claims for arrears increased from 6,997 to 18,201 properties (a rise of 160%), property orders from 5,431 to 14,319 (an increase of 164%), warrants from 3,786 to 7,728 (a rise of 104%) and landlord repossessions from 1,582 to 4,900 (a rise of 210%).

 

This is on the back of the Section 24 tax changes made a few years ago and ahead of expensive energy efficiency upgrades that the Government is expected to legislate for in the coming 12 months.

 

Doesn’t sound good for landlords.

 

Until you look past the headlines and look at the actual detail.

 

79.93% of UK buy-to-let (BTL) mortgages are interest-only mortgages (compared to 12.29% of homebuyers), meaning the repayments are considerably lower than typical homebuyer mortgages. Therefore, the rise in interest rates won’t hit landlords’ profitability as much as many thought initially.

 

93.21% of all new BTL mortgages agreed in the last two years have been on a fixed rate mortgage, and 73.27% of all existing BTL mortgages are on a fixed rate. So, the increase in mortgage payments will only affect one in four landlords on variable-rate mortgages.

 

Let us not forget that less than one in three landlords have a BTL mortgage, meaning two out of three landlords aren’t affected by these interest rate rises.

 

The average rent of a Huddersfield property is now £849 per month, an impressive rise of 8.3% compared to a year ago.

 

Those possession orders mentioned above look high until you realise that there are 4.4 million properties in the private rented sector. That means only 2.04% of UK rental properties had arrears bad enough for landlords (or agents) to start possession proceedings to evict the tenant. Also, only 0.045% of tenants were evicted through the courts in a calendar year.

 

Talking of arrears, recent studies using statistics from the Government and other letting industry sources show that …

 

landlords who didn't use a letting agent to manage their property were 272.5% more likely to be two months or more in rent arrears in 2021. It pays to use a letting agent!

 

Next, the potential cost of upgrading rental properties' energy efficiency.

 

The proposed changes in the MEES regulations require a minimum energy efficiency (measured by its Energy Performance Certificate (EPC)) to a ‘C’ rating on new tenancies from 2025 and existing tenancies by 2028. That will cost, on average, £10,000+ per property.

 

Yet it cannot be forgotten when the rules changed in 2018 properties had to have a minimum EPC rating of E in England and Wales to be legally compliant. If a landlord of an 'F' or 'G' rated rental property could prove that it would cost more than £3,500 to make those improvements to their EPC rating, then that was the most the landlord had to pay. No doubt something similar will take place in the future proposed legislation.

 

Then there is the profitability of renting. Rental yields are the primary guide to profitability in buy-to-let.

 

Yields are starting to rise as Huddersfield rental growth is beginning

to outstrip Huddersfield house price growth.

The average yields being achieved in Huddersfield today are …

• 1 bed – 6.0% yield
• 2 bed – 5.2% yield
• 3 bed – 4.0% yield
• 4 bed – 3.3% yield
• 5 bed – 2.7% yield

Yet investing in buy-to-let isn't just about the yield.

Demand from tenants plays a massive part in the success or failure of your buy-to-let investment, so other yardsticks, such as void periods, should be considered. There is no point in securing a higher-yielding rental property if that buy-to-let investment remains empty.

My research has found that the Huddersfield overall void period average so far is 41.4% lower than 18 months ago, reducing from 29 days in April 2021 to 17 days in September 2022 (the void period being the time it takes from the date of an old tenant moving out until the new tenant moves in).

Finally, buy-to-let investment is also an excellent hedge against inflation compared to other investments. If you would like more information on that, drop me a line, as it's too long to post here.

In conclusion, the days of buying any old Huddersfield buy-to-let property at any price and making loads of money from it as easy as falling off a log are gone!

The next few years will be challenging for everyone. Still, with the advice and opinion of a decent Huddersfield letting agent to guide and support you on your buy-to-let journey, buy-to-let will continue to be a profitable investment.

You need to review your rental portfolio regularly. See how your portfolio measures up against yield vs capital growth see-saw. Review your mortgage financing and EPC status of your portfolio. 

If you would like a no-obligation chat with me to discuss your options as a new potential landlord or an existing landlord with a rental portfolio, then let's talk.

Let us see whether your expectations from buy-to-let match your potential investment in Huddersfield property. I look forward to you picking up the phone or sending me a message for a no-obligation chat.

 

Huddersfield Property Market What will the stamp duty cuts & interest rate rises mean for Huddersfield homeowners & landlords?

 Last week the Bank of England increased interest rates to 2.25% and they are expected to be 3.25% by early next year. This increase will make the monthly mortgage payments more expensive for first-time buyers, an issue dubbed by some as the 'property affordability crunch.'

 

It will also damage the household budgets of homeowners coming off their fixed-rate mortgages in the next 12 months.

 

So how many homeowners are coming off their fixed rates in the next year?

 

Of the 7.97 million homeowners with a mortgage in the UK, 6.1 million of them are on a fixed-rate mortgage at an average rate of 2.04%. Industry statistics show around 1.3 million homeowners are coming off their fixed rate in the next 12 months.

 

The current crop of fixed-rate mortgage deals available today have already had the recent increase in the base rate ‘priced-in’ for weeks.

 

The cheapest 5-year fixed rate today for a 65% Loan to Value re-mortgage (i.e. you are borrowing 65% of the value of your home) is a mortgage rate of 3.8% with Royal Bank of Scotland (RBS).

 

So, what will be the difference in mortgage payments

between a 2.04% mortgage and a 3.8% mortgage?

 

Say an average Huddersfield first-time buyer bought their first home in November 2019 on a 25-year mortgage. They had a 3-year fixed-rate mortgage, and let's assume they fixed it at 2.04% (as mentioned above), meaning their fixed-rate deal finishes next month. They have £260,000 outstanding on their mortgage, and their Huddersfield house is worth £400,000. They would have been paying £1,107 per month for the last three years (assuming they took out a 25-year repayment mortgage).

 

On the RBS deal above, they will have to start paying £1,548 per month from November when they come off their initial rate – a rise of £441 per month in mortgage payments. That’s quite a rise and potential blow to their household budgets.

 

Yet if they pushed back the repayment term from 22 years to, say, 35 years, that reduces the payment to £1,120 per month – something to consider if you are re-mortgaging in the coming 12 months.

 

 

What will the stamp duty changes mean for

Huddersfield property owners?

 

PM Liz Truss and Chancellor Kwasi Kwarteng believe that cutting stamp duty will support economic growth by encouraging more people to move home or jump onto the property ladder.

 

Stamp duty also has other harmful side effects as it decreases labour market elasticity and curtails people from selling up and buying elsewhere, where the jobs are.

 

Also, stamp duty makes mature homeowners stay put in their large homes rather than downsizing. This reduction in stamp duty will encourage those mature homeowners to move, thus freeing up their large family homes for the younger families that need them.

 

The Chancellor doubled the zero-rate stamp duty band from

£125,000 to £250,000, passing a stamp duty tax saving of up

to £2,500 for all English homebuyers.

 

Also, tax savings are even more significant for first-time buyers, particularly in areas with high house prices, such as London and the South East. They can save a maximum of £11,250 in stamp duty – with a new zero-rate band of £425,000, based on a higher £625,000 spend cap (i.e. the house they buy can't be over £625,000 for them to qualify for the tax relief).

So, what effect will these stamp duty changes have on the Huddersfield property market? Looking at recent events in the local property market is the best place to start.

Of the 3,155 transactions in the Huddersfield area since June 2021,

2,360 were below £250,000. These would now be tax-free!

 

Unsurprisingly, most housing transactions in Huddersfield were below the £250,000 threshold, yet irrespective of that point, it’s a saving of up to £2,500 for all future Huddersfield homebuyers.

 

Anyone currently buying a house in Huddersfield and not yet completed on their purchase (completion is when you have paid the money for your home and collected the keys) will be in line to make this saving.

 

Huddersfield landlords purchasing buy-to-let properties will also save money with the stamp duty cut (but they will still be liable for their second home stamp duty levy of 3%).

 

Overall, this is a welcome move to help the Huddersfield property market.

 

Yet will the stamp duty threshold rise have the seismic effect that the Rishi Sunak stamp duty holiday did in 2021, where just under 40% more people moved home than the long-term 30-year average?

 

I am sure the stamp duty cut will somewhat offset the cost of rising mortgage rates mentioned in this article and cushion the blow to the property market.

A blow to what you might ask?

Well, many people judge the property market's health by house prices.

The average value of a Huddersfield property stands at £215,894

and has risen 34.2% in the last five years. Not bad, eh?

But I believe there is a better way to judge the health of the local property market, and that is the number of people moving home (i.e. housing transactions).

You might be asking yourself why we should be more concerned about the number of property transactions and not the change in property values.

Many economists believe the number of property transactions is a far more accurate bellwether for the health and potency of the local housing market. A greater number of people moving home is better for the whole economy (i.e. what these changes are being made for) than a smaller number of transactions, whilst the same can’t be said for higher house prices. 

So what is going to happen to Huddersfield house prices?

I believe the growth in Huddersfield house prices achieved in

2021/22 is not sustainable into 2023.

 

In conjunction with the price cap on energy bills, the stamp duty change, the reversal of the rise in National Insurance and the drop in Income Tax will mitigate house price drops. Yet, I foresee a ‘slight’ realignment in the house prices being achieved in 2023, compared to 2022.

The more significant impact these changes will have is the number of people moving home in the next 12 months.

I have been forecasting a 15% to 20% year-on-year drop in Huddersfield property transactions in 2023. Following this stamp duty cut and the measures mentioned above, I believe it will be lower, yet around 5% lower.

To conclude, I predict we will have slightly lower house prices and fewer people moving home in Huddersfield, but not any way a crash that many thought was on the horizon.

Before I go though, let me share some thoughts on whether stamp duty is a fair tax.

 

Now, this is almost a topic for a standalone article itself. Some economists believe that removing stamp duty (which raised £14.1bn in tax in 2021) and replacing that lost income to the Exchequer by increasing council tax on more expensive properties would do a lot more than other intended tax cuts to boost economic growth.

 

According to some commentators, the way UK Government taxes housing is flawed. They suggest instead of taxing an infrequent property transaction particularly harshly (the average stamp duty bill is £10,600), the Government should tax living in a house more, especially those who live in the higher priced properties.

 

So let us see how viable that could be …

 

Even if council tax was frozen for bands A to D (the lower priced properties), and the uplift between the more expensive council tax bands was doubled on each step between band D and H (so a typical band E property owner would see their council tax rise from £2,473 to £3,628 per year and a typical band H see a rise of from £3,435 per year to £5,790 per year), such massive increases in council tax would be political suicide for the wealthy Tory voting homeowners and only raise £5.28bn – a long way from the £14.1bn currently raised.

 

Now, if the £14.1bn tax raise were spread evenly over all council tax bands, the average band D property would need to rise by £490 per year, and even a band A would increase by an extra £382 a year … something that again would be political suicide.

 

Yes, stamp duty is flawed. It's just every other option has more significant flaws.

 

Anyway, these are just my thoughts. Tell me, people of Huddersfield, what are your thoughts on the Budget, the stamp duty changes or whether stamp duty is fit for purpose and what you would do if you were the Chancellor to bolster the British property market?

 

 

Stamp Duty Cut to Save Huddersfield homebuyers upto £2,500

 The Chancellor has announced a cut to the Stamp Duty tax in England and Northern Ireland.

Stamp Duty is paid by the buyer of any property and can cost thousands of pounds.

This is a permanent cut to the Stamp Duty threshold of how much a property has to cost before stamp duty is paid. Before the announcement, one had to pay Stamp Duty on any property above £125,000. That threshold has been increased to £250,000

As stamp duty is paid on completion, anyone currently buying a property will benefit from this as it is applicable from today on any house purchase in England and Northern Ireland.

Anyone buying a second home will also save this money (although they will still have to pay the additional 3% levy for second homes)

Stamp Duty now starts at £250,001 at 5% for next £675,000 (the portion from £250,001 to £925,000).

You only pay 5% on the amount over £250,000 (ie If you buy a house for £325,000, you only pay 5% on the difference between £325,000 and £250,000 i.e. £75,000 - 5% of £75,000 is £3,750)

Liz Truss and the Chancellor Kwasi Kwarteng believe that cutting stamp duty will support economic growth by encouraging more people to move home or jump on the property ladder.

Stamp Duty also decreases labour market elasticity as it curtails people from selling up and buying elsewhere, where the jobs are.

This is great news for anyone looking to move home in the next few months as it will save them up to £2,500, money that could be used to make the house move easier

Why Aren’t Liz and Rishi Courting Huddersfield’s Generation Rent?

With the cost-of-living crisis beginning to hit, the 20 and 30-somethings of Huddersfield urgently need the help and support of the Government to help them get on the property ladder.

 

For the last few weeks, we have listened to the debates and hustings of Liz and Rishi. Between them, they have told us how they are going to stop building on the green belt, slash taxes, outbid each other on the number of refugees they are going to deport and push back against WOKE culture wars, but what are they doing for the 20 to 30-somethings of Huddersfield?

 

Dubbed ‘Generation Rent’ by the press, desperate to get on the property ladder, this is an open goal for any candidate to obtain more votes to become the next Prime Minister.

 

Yet only 16% of the c.200,000 Tory membership is aged 18 to 34 whilst 47% of members are aged between 55 and 74.

 

Therefore, it's not a surprise that neither Liz nor Rishi aren’t speaking daily about the cost of petrol for the daily commute, rising childcare fees or the lack of opportunities for first-time buyers to purchase their own properties.

 

(For balance, 16% of Labour’s members are 18 to 34, 20% for the Lib Dems and 16% for the SNP).

 

Everyone is feeling the effect on their household budgets with the rise in energy bills. Yet, it is the younger generation (i.e., Generation Rent) that are having to cope with the frenzy of rising energy costs the most.

 

Whilst increasing energy prices will affect all households across the country, younger (and less affluent) households are more prone to be disproportionately affected than those on the lowest incomes (i.e., Generation Rent).

 

In the financial year ending in 2020, the least well off 25% of households spent 5.59% on energy compared to 3.9% for the average UK household. With 2023 energy bills set to be triple those figures, energy bills for those in the lower quartile will rise to around 16.8% of their household budget.

 

And let's look at the housing element of the ‘Generation Rent’ household budget.

 

The average rental of a Huddersfield property in the summer of 2020 was £659 PCM; by the summer of 2021, it was £701 PCM, and today, it is £759 PCM.

 

Overall, Huddersfield rents are 8.3% higher than a year ago and 15.1% higher than two years ago.

 

This is the fastest annual rate of rental growth since records began in 2006. This increase in rents isn’t standard. Before 2020, I would have expected to see this level of rent growth over a seven-to-ten-year period – not two years. Good news for Huddersfield landlords, yet not so for Huddersfield tenants.

 

Why have rents increased so much in Huddersfield?

 

It comes down to fewer rental properties and existing Huddersfield tenants not moving as much.

 

There are 882 fewer rental properties in Huddersfield than five years ago, leaving only 15,634 private rental properties in Huddersfield.

 

9 out of 10 rentals come onto the market because the existing tenant is moving. Yet, because there are fewer Huddersfield rental properties and the asking rents for those are much higher than their current home, many Huddersfield tenants are not moving, exasperating the issue even further.

 

Today, I looked on Rightmove, and there were only 207 properties available to rent. I would have expected that to be over double that pre-pandemic.

 

Neither candidate has been silent on the topic of homeownership for the young.

 

Rishi Sunak said he would stop building on the greenbelt. This, however, would not help Generation Rent massively.

 

Liz Truss has pledged to help more renters buy their first home by stating she will ensure tenant’s rental payments could be used as part of mortgage affordability assessments. This is important as the mortgage payments can be 10% to 20% lower than the rental payments.

 

Tied in with new relaxed mortgage affordability rules announced by the Bank of England in early August, this is undoubtedly a step in the right direction to help Generation Rent.

 

Truss also plans to scrap the red tape holding back housebuilding and give local populations more say on developments. However, when Boris Johnson suggested something similar a few years ago, the policy was quietly dropped after the Liberal Democrats used this against them resulting in the Tory’s resounding by-election defeat in 2021 in Chesham and Amersham.

 

So, by the end of the first week of September, we will know who the Prime Minister will be. Whoever gets the job has a gigantic task on their hands. I wish them luck and ask them not to forget the younger generation and their aspiration to be homeowners.