Huddersfield Landlords could be fined £861,000 per year

“Who would want to move to Huddersfield in weather like this?”, was what one landlord said to me as we shook hands outside his property, the other afternoon. It was windy, cold, it had been raining most of the day and it was the last appointment of the day at 4.45pm. I will admit, as I had been out of the office all day, I was looking forward to getting home, putting the fire on, and watching telly with a big mug of tea.. but this landlord lived in neighbouring Halifax and this was the earliest he could do. 

It turned out he had been self-managing the property himself over the last few years, but was worried with all the new legislation that had been introduced recently. He was particularly concerned about the up and coming ‘Right to Rent’ legislation, so as his tenant had handed in their notice recently, on this new tenancy he called us for our opinion.

For those Huddersfield landlords that don’t know, landlords will need to check the immigration status of any new tenants moving into properties from February 2016 or face a £3,000 fine. It is called the 'Right to Rent' rules. However, tenants should also be aware that as well as traditional landlords, tenants who sub let rooms and homeowners who take in lodgers, must also check the right of prospective tenants to reside in the UK.

Our landlord from Halifax wanted to know how much of a real issue was ‘Right to Rent’ in Huddersfield. I was able to tell him, the last available figures (from a couple of years ago) show that 287 people (whom were registered as Non-UK Born Short-term Residents) moved into private rented accommodation in the Kirklees Council area in one year alone. If all of those people weren’t supposed to be in the UK, that would be a fine of £861,000 to the landlords of the town.

It doesn’t sound a lot when you think there are 162,949 residents in Huddersfield, and of those, 140,147 people (or 86.01%) were born in the UK. But Huddersfield is a cosmopolitan town as the country of birth of the residents in Huddersfield can be split down as follows:

·         UK                                                                          86.01%

·         Ireland                                                                     0.87%  

·         Europe                                                                     2.66%

·         Africa                                                                      1.62%

·         Middle East and Asia                                              7.32%

·         Americas and Caribbean                                         1.35%

·         Australia and Pacific region                                    0.13% 

However, it must also be recognised that landlords, by checking up on tenants, could potentially be accused of discrimination under the Equality Act. This is a real minefield for landlords, especially when you consider that not all of the 4,335 Europeans in the area necessarily have the right to live in the UK either.

In a nutshell, Huddersfield landlords will need to check and retain copies of certain documents that show a potential tenant has the right to live in the UK. These include ....

·         UK Passport

·         EEA Passport/Identity card

·         Travel document or Permanent Residence Card showing indefinite leave to remain

·         Paperwork from Home Office stating their Immigration status

·         Certificate of registration or naturalisation as a British citizen.

I hope the new law will target dishonest landlords who repeatedly fail to carry out Right to Rent checks by making it a criminal offence. This means they could face imprisonment for failing to check on their tenants. That is why more and more landlords are asking agents to manage their properties, so they can stay the right side of the law.

So what did our landlord do?

Well after our chat, he asked us to find a tenant and manage the property for him - he had been reading the Huddersfield Property Blog for a while and because of the knowledge we impart to the landlords of Huddersfield, we obviously know what we are talking about.  Even better news for him, even though this would cost him agency fees, I was able to get him an additional £35 per month for his property (when we found him a tenant one week later). Now, together with the peace of mind we will keep him the right side of the law and put a stop to midnight phone calls complaining about dripping taps, it was a win-win situation for everyone.

Huddersfield Landlords count the cost of a Tory Election win

Can you remember 10.05pm on Thursday, 7^th May 2015 ... with the shock news that BBC Exit Polls suggested the Conservatives would be returned with majority? The middle classes in Fixby and Ainley Top exhaled a huge sigh of relief, as Huddersfield landlords, faced with rent controls from Red Ed and the Labour Party, now had something to cheer about as the Tory’s were always considered to be a political party that accepted the importance of the rental market, supported its development while properly targeting the lawbreaker landlords renting out below standard rental accommodation.

Since May though, George Osborne announced future rises in stamp duty for buy to let landlords and a change in the interest relief on buy to let mortgages, some people have started to question that loyalty. However, things could have been a lot worse for Huddersfield landlords as previous ideas of making landlord’s pay more tax was the idea (which was seriously considered) of increasing Capital 

Gains Tax rates to the landlord’s own income tax levels. If Landlords would have had to pay capital gains tax of 40% to 45% on any uplift in value, I can tell you here and now, that would have made investing in property a non starter for almost everyone.

However, I will admit the loss of mortgage higher rate tax relief will make a number of properties not stack up financially. The new rules are likely to slow demand in the Huddersfield housing market, which is in fact good news for the other landlords, as there is less competition from 'amateur' landlords offering too much.

Just a thought, but making Huddersfield landlords think twice and

run their numbers more cautiously is not such a bad thing.

So looking at the numbers, the November figures have just been released and they show a growth of property values in Huddersfield of 0.7% over the month of November. That figure doesn’t surprise me due to the time of year. It’s quite dangerous to look at one month in isolation, so looking at a more medium term view, over the last 12 months, property values in Huddersfield have risen by 3.4%, not bad when you consider inflation is running at -0.1%.

However, regular readers of the Huddersfield Property Blog know my passion for looking deeper into the stats. The really interesting information is the value growth, but what types of property are actually selling in Huddersfield?  Looking at all the properties sold, as recorded by the Land Registry, within 2 miles of the centre of Huddersfield in September 2015 (this data always runs a couple of months behind the house price data) compared to September 2007 (a couple of months before the credit crunch started to bite and the subsequent property crash).

	Sept 2007	Sept 2015	Difference
Detached in Huddersfield	26	14	-46%
Semis in Huddersfield	59	34	-42%
Terraced Houses in Huddersfield	98	57	-42%
Apartments / Flats in Huddersfield	15	6	-60%

Now I have mentioned in previous articles that the numbers of properties selling in the town has certainly dropped post 2008, but what amazed me were the greater drop in the number of apartments selling in Huddersfield compared to the drop of detached, semis and terraced properties.

Less properties are selling than last decade in Huddersfield

and the types of properties selling have changed ...

interesting times ahead for the Huddersfield Property market!

Therefore, all I can say to the landlords of Huddersfield is do your homework, make sure the numbers do stack up, take advice and opinion from professionals and above all, for those of you planning to add to your portfolio, buy the right property at the right price. One place for such advice and opinion on the Huddersfield Property market is the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Where will Huddersfield Property Prices be by 2021?

I was having lunch the other day at Three Acres Inn and Restaurant at the Three Acres Hotel in Huddersfield, with a local Huddersfield solicitor friend of mine, when the subject of property came up. He asked me my thoughts on the Huddersfield property market for the next five years.  Property prices are both a British national obsession and a key driver of the British consumer economy.  So what will happen next in the property market? So here is what I told him, and now wish, my blog reading friends, to share with you.

Before I can predict what will happen over the next five years to Huddersfield house prices, firstly I need to look at what has happen over the last five years.  One of the key drivers of the housing market and property values is unemployment (or lack of it), as that drives confidence and wage growth – key factors to whether people buy their first house, existing homeowners move up the property ladder and even buy to let landlords have an appetite to continue purchasing buy to let property.

When the Tory’s came to power in May 2010, the total number of people who were unemployed in town stood at 3,410 (or 7.6% of the working age population in Huddersfield parliamentary constituency’s). Last month, this had dropped to 1,680 people (or 3.7% of the working age population).

As the Huddersfield job market has improved with better job prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS).  That is why, even with the colossal turbulence of the last few years, property values in the Huddersfield area are only 0.09% lower today than they were five years ago.

Many home occupiers have held back moving house over the past seven to eight years following the Credit Crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more stock onto the market. With a more stable economy in the town, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Huddersfield.

I forecast that the value of the average home

in Huddersfield will increase by 17.8% by 2021

17.8% might sound optimistic to some, but according to Land Registry, values are currently rising in Huddersfield at 2.6% year on year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole.

However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Huddersfield housing market.  The number of properties for sale in Huddersfield is lower than it was five years ago, restricting choice for buyers (yet the other side of the coin is that that keeps prices higher). Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy to let taxation rules which are being introduced between 2017 and 2021 (although choosing the right sort of property / portfolio mix in Huddersfield will, I believe, mitigate those issues with the next taxation rules).

I am telling the landlords I speak to, that with interest rates at their current level 0.5%, the cash in your Building Society Passbook is going to grow so slowly that it might as well be kept under their bed. Property prices, by contrast, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation.

So my final thought ...  property is a long term investment, it has its’ up and downs, but it has always outperformed, in the long term, most investments. Those in their 40’s and 50’s in Huddersfield would be mad not to include property in their long term financial calculations. Just make sure you buy the right property, at the price in the right location. One source of information on such matters would be the Huddersfield Property Blog  http://huddersfieldproperty.blogspot.co.uk/

What does 2016 have in store for the Huddersfield Property Market?

Huddersfield house prices up or Huddersfield house prices down? ... and if so, by how much? Those of you who read the Huddersfield Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 43,744 Huddersfield homeowners and landlords.

The average Huddersfield property is 2.6% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the 

Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Huddersfield landlords in my blog, but I believe the real issue in the Huddersfield property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General 

Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Huddersfield in 2016?

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in October 2011, 1,243 properties were for sale in Huddersfield .. today that figure is 788. On the face of it, this means there is less choice for Huddersfield buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Huddersfield house sellers.

Everything isn’t all doom and gloom though ... again back in October 2011, the average property in Huddersfield took 139 days to find a buyer .. latest figures state this has dropped to 128 days .. a drop of 8% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Huddersfield is the 2 bed, which takes 109 days to find a buyer (on average) compared to the 1 bed, which takes 140 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Huddersfield in 2016?  I am going to suggest they will rise between 2% and 3% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Huddersfield property market .. visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

Huddersfield House Price Monopoly: How do Prices vary?

Well as the nights draw in, if there is nothing on the telly, the significant other and myself like to play the board game Monopoly. The buying and renting of property, it’s like a busman’s holiday for me! 

Interestingly, the game was originally invented at the turn of the 20^th Century (in 1903) and the game was initially called ‘The Landlord’s Game’!  Anyway, after a few years in the wilderness, the current owners of the game renamed it in 1935 and so began Monopoly as we know it today.

So whether you are a homeowner or landlord in Huddersfield, what would a Monopoly board look like today in the town? Property prices over the last 80 years have certainly increased beyond all recognition, so looking at the original board, I have substituted some of the original streets with the most expensive and least expensive locations in Huddersfield today.

Initially, I have focused on the HD1 postcode only, looking at the Brown Squares on the board, the ‘new’ Old Kent Road in Huddersfield today would be Town Crescent, with an average value £53,000 (per property) and Whitechapel Road would be Crosland Road, which would be worth £59,800. 

What about the posh dark blue squares of Park Lane and Mayfair? Again, looking at HD1, Park Lane would be Gledholt Road at £256,000 and Mayfair would be Edgerton Green at £310,900. However, look a little further afield from the HD1 postcode, and such roads as Norwood Park would claim the Mayfair card at £539,200! Also, I can’t forget the train stations (my favourite squares), and over the last 12 months, the average price that property within a quarter mile of the station sold for was £102,300.

So that got me thinking what you would have had to have paid for a property in Huddersfield back in 1935, when the game originally came out?

·        

•        The average Huddersfield detached house today is worth £283,680 would have set you back 513 Pounds 5 shillings and 3 old pence.

·         

•        The average Huddersfield semi detached house today is worth £153,570 would have set you back 277 Pounds 17 shillings and 1 old pence.

·        

•        The average Huddersfield terraced / town house today is worth £112,650 would have set you back 203 Pounds 16 shillings and 4 old pence.

·

•        The average Huddersfield apartment today is worth £124,700 would have set you back 225 Pounds 12 shillings and 4 old pence.

If that sounds like another currency, you must be in your 20’s or 30’s, because it was back in February 1971, that Britain went decimal and hundreds of years of everyday currency was turned into history overnight. On 14th of February of that year, there were 12 pennies to the shilling and 20 shillings to the pound. The following day all that was history and the pound was made up of 100 new pence.

Anyway, I hope you enjoyed this bit of fun, but underlying all this is one important fact. Property investing is a long game, which has seen impressive rises over the last 80 years. In my previous articles I have talked about what is happening on a month by month or year by year basis and if you are going to invest in the Huddersfield property market, you should consider the Huddersfield property you buy a medium to long term investment, because Buy to let is pretty much what it sounds like – you buy a property in order to rent it out to tenants.

As I reminded a soon to be first time landlord from Birkby the other week, Buy to let in Huddersfield (as in other parts of the Country) is very different from owning your own home. When you become a Huddersfield landlord, you are in essence running a small business – one with important legal responsibilities.

  On that note, I want to remind landlords of the recent and future changes in legislation when it comes to buy to let. This year, rules have changed about tenant deposits, carbon monoxide detectors and early in the New Year, landlords will have responsibilities to do immigration checks on all their tenants. Failure to adhere to them will mean a minimum of heavy fines in the thousands or in some cases, prison ... it’s a mine field!  That’s why I write the Huddersfield Property Blog, where it has an extensive library of articles like this one, where I talk about what is happening in the Huddersfield property market, what to buy (and sometimes not) in Huddersfield and everything else that is important to know as a Huddersfield landlord. Please visit the Huddersfield Property Blog http://huddersfieldproperty.blogspot.co.uk/

The Huddersfield Property Market and £1,300,000,000,000,000,000 in loose change

The 5^th of March 2009 was the date Mervyn King, the then Bank of England Governor, slashed UK interest rates to the unparalleled figure of 0.5%. In just under five months, starting on 8^th October 2008, the rate had come down from 4.5% to that low figure, all in an attempt to ensure the British economy survived the worldwide credit crunch. Now as we deck the halls with bows of holly nobody expected that, over six years later, rates would still be at that low level.

In the summer, people were predicting a rise in the New Year, yet now, some forecast it may remain the same for years to come the due to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr Carney at Threadneedle Street, but merely a humble letting agent from Huddersfield, so I can not profess to know what will happen to interest rates. However, what I do know, speaking to my Huddersfield friends and Huddersfield landlords is that these low interest rates have hit savers really hard.

If you added up everyone’s bank and building society savings in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3 trillion), most of which is earning a pittance in interest.  That is why more and more 40 and 50 year old Huddersfield landlords have been investing some of that cash into Huddersfield bricks and mortar, as they search for a low risk investment opportunity.

Buying a Huddersfield buy to let property isn’t risk free, but there are certainly things you can do to mitigate and lower one’s exposure to risk. You see by buying a rental property, it potentially offers an enigmatically decent proposition in terms of being able to obtain attractive returns that beat inflation and savings accounts, yet without taking the levels of risk associated with stock markets.

The UK residential property market has long been the safest form of collateral for lenders of all varieties. Against a backdrop of a greatly changing economic environment, Huddersfield house prices have been extraordinarily robust, increasing by over 1413.7% between 1974 and today. Some will say there have been significant property price falls, namely in 1975, 1988 and 2008, yet each time after this has been followed by an upturn in property values. For the record, the stock markets in the same time frame only rose by 432.5%!

.. and that is the best thing about buy to let property. Unlike the stock market, with its unfathomable equities, shares and bonds, that nobody really understands (as they are controlled by some faceless whizzkid in Canary Wharf!) with a buy to let property, landlords can take control and understand their investment .. in fact you can touch and feel the bricks and mortar investment.

..  but before you go out and buy any old Huddersfield property, plenty of landlords still get it wrong. 

You have to be aware of your legal responsibilities when it comes to tenant safety, tenants deposits, energy certificates and in the new year, landlords will have the added responsibility of checking the immigration status of prospective tenants. Get it wrong and big fines and even prison is an option – but that’s why many agents use a letting agent to manage their property for them.

Next, you have to buy the right property at the right price. Recently I have seen some really heart breaking situations in Huddersfield and the immediate area, of people paying way too much for a property, only to lose out when they came to sell. One example that comes to mind is that of a property owner in a terraced house on Honoria Street, just off Huddersfield’s main A641 .. a decent two bed end terrace, 44 sq metres inside (473 sq ft in old money) sold in November 2005 for £57,500. In the summer, it only obtained £50,000, a drop of 13.04% or 1.41% a year - a very disappointing result.

I cannot stress enough the importance of doing your homework. One source of information and advice is the Huddersfield Property Blog where I have similar articles to this about the Huddersfield property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with. If you haven’t visited and you are interested in the local property market in Huddersfield .. you are missing out! http://huddersfieldproperty.blogspot.co.uk/

Huddersfield vs Bradford – Clash of the Property Market Titans

Many landlords have been asking me my thoughts on the Huddersfield property market recently, and in particular, what is happening to property values. My calculations show property values in Huddersfield quite interestingly grew in the month of September by 0.1%. When one looks at the annual growth, Huddersfield values are 1.7% higher (when comparing Sept 14 to Sept 15).  However, there are signs that the fundamental growth of property values in Huddersfield has now peaked, despite those average property values being below levels recorded in 2007 (just before the 2008 crash).

Even though prices are higher this month, this impressive rise of Huddersfield property values masks the underlying truth in what is really happening to local property values in the town. Throughout 2015, property values have been yo-yo like on a month by month basis, being quite volatile in nature.  For example,

·         September 2015                  0.1% rise

·         August 2015                        0.1% drop

·         July 2015                             0.4% rise

·         June 2015                            1.0% drop

·         May 2015                             0.4% rise

·         April 2015                            0.2% rise

·         March 2015                          0.5% drop

This is in part due to seasonal factors, as well as mortgage approvals increasing over June and July and then falling by over 15% in August, according to the Council of Mortgage Lenders (CML).

The outlook for the Huddersfield property market remains positive against the foundations of low mortgage rates and growing consumer confidence. However, I do have to question the recent CML mortgage data and whether that raises issues over whether the rate of growth since the Tory’s were re-elected in the early summer can continue? However, on a positive note, Huddersfield property values are still running ahead of salaries and average property values are 17.3% below the levels recorded in 2007.

Talking to fellow property professionals in the town, demand for property has been showing signs of moderating in the final few months of 2015, which in turn will lead to a slight slowdown in the pace of house price growth in the run up to the festive season. You see, it is really important not to read too much into one month’s (September’s) headline figures.

Readers might be interested to note that before the 2008 property crash, all the UK region’s housing markets tended to move up and down in tandem like the Huddersfield Synchronised Swimming team at the Kirklees Active Leisure Centre Swimming Pool!  Since then though, the Greater London property market took off like a rocket in 2009/10, whilst the rest of the UK only really started to grow in 2012/13, and even then that growth was a lot more modest than the Capital’s.  Looking closer to home, it can even be different in neighbouring towns, areas and cities, so whilst Huddersfield property values are 1.7% higher than a year ago (as mentioned above), Bradford property values are 1.2% lower than a year ago.

I cannot stress enough the importance of doing your homework.  One source of information and advice is the Huddersfield Property Blog where I have similar articles to this about the Huddersfield property market and what I consider to be the best buy to let deals around at any one time in the town, irrespective of which agent it is on the market with.  If you haven’t visited and you are interested in the local property market in Huddersfield….. you are missing out!  http://huddersfieldproperty.blogspot.co.uk/