Only 677 Properties For Sale in Huddersfield

2017 has started with some positive interest in the Huddersfield property market.  Taking a snap shot of the Huddersfield property market for the first quarter of 2017, the picture suggests some interesting trends when it comes to the number of properties available to buy, their asking prices and what prices properties are actually selling for.

Let us first consider the number of properties for sale, compared to 12 months ago:

Type of Huddersfield Property	Number of Properties on the Market 12 months ago	Number of Properties on the Market now	% change
Detached	143	129	-10%
Semi	178	202	+13%
Terraced	228	214	-6%
Flat	76	95	+25%

So when we add in building plots and other types of properties that don’t fit into the four main categories, that means there are 677 properties for sale today compared with 706 a year ago, a drop of 4%.

Next, Huddersfield asking prices, compared

to the same as a year ago, are 7% higher.

With that in mind, I wanted to look at what property was actually selling for in Huddersfield. Taking my information from the Land Registry, the last available six months property transactions for HD4 show an interesting picture (note the Land Registry data is always a few months behind due to the nature of the house buying process and so November 2016 is latest set of data). The price shown is the average price paid and the number in brackets is the number of properties actually sold.

	Jun-16	Jul-16	Aug-16	Sep-16	Oct-16	Nov-16
Detached	£322,110 (13)	£281,800 (5)	£231,199 (10)	£195,500 (10)	£239,458 (6)	£329,996 (5)
Semi Detached	£241,643 (7)	£206,969 (8)	£146,269 (16)	£136,667 (9)	£187,292 (6)	£115,000 (10)
Terraced	£138,497 (16)	£119,806 (17)	£119,716 (16)	£83,542 (12)	£91,429 (21)	£115,860 (14)
Flat	£59,500 (3)	£48,500 (1)	£35,000 (1)	£62,000 (3)	£70,800 (5)	£64,000 (1)
All	£212,138 (39)	£166,127 (31)	£153,552 (43)	£128,632 (34)	£127,223 (38)	£149,534 (30)

So what does all this mean for the property owning folk of Huddersfield?

Well, with less property on the market than a year ago and asking prices 7% higher, those trying to sell their property need to be mindful that buyers, be they first timers, buy to let landlords or people moving up the Huddersfield property ladder, have much more price information about the Huddersfield property market at their fingertips than ever before.

Those Huddersfield people who are looking to sell their property in 2017, need to be aware of the risks of over pricing their property when initially placing it on the market. Over the last 12 months, I have noticed the approach of a few Huddersfield estate agents is to suggest an inflated asking price to encourage the homeowner and secure the property to sell on their books. The down side to this is that when offered to the market for the first time, buyers will realise it is overpriced and wont waste their time asking for a brochure. They won’t even view the property, let alone make an offer. So when the price is reduced a few months later, the property has become market stale and continues to be ignored.

Whilst the Huddersfield property-market has an unassailable demand for property – there is one saying that always rings true - as long as the property is being marketed at the right price it will sell.

If you want to know if your Huddersfield property is being marketed at the right price, send me a web link and I will give you my honest opinion.

Huddersfield’s housing affordability hits a ratio of 5.76 to 1

 A Huddersfield homeowner emailed me last week, following my article posted in the Huddersfield Property Blog about the change in attitude to renting by the youngsters of Huddersfield and how they thought it was too expensive for first time buyers to buy in Huddersfield.  There can be no doubt that buy to let landlords have played their part in driving up property values in Huddersfield (and the UK) and from that made housing a lot less affordable for the 20 and 30 somethings of Huddersfield.

In the email, they said they thought the plight of the first-time buyers in Huddersfield was like a novice tennis player, playing tennis with Andy Murray. If you played him once you will unquestionably lose and if you were to play him 100 times you would lose 100 times. That is what they thought it was like for all the 20 something’s first time buyers of Huddersfield going against all the buy to let landlords.

They went on and asked if the Bank of England (BoE) should be tasked to control house price inflation in the same way as the BoE controls inflation.  The BoE has a target for the annual inflation rate of the Consumer Prices Index of 2%, whilst it is also required to support the Government’s economic policy, including its objectives for growth and employment.  So, should BoE be charged with containing buy to let housing market, by possibly changing the rules on the loan-to-value (LTV) ratio’s?

So, let’s look at how affordable Huddersfield is?  The best measure of the affordability of housing is the ratio of Huddersfield Property Prices to Huddersfield Average Wages, (the higher the ratio, the less affordable properties are).   (i.e. looking at the table below, for example in 2014, the average value of a Huddersfield property was 5.52 times higher than the average annual wage in Huddersfield).

1998	2000	2002	2004	2006	2008	2010	2012	2014	2016 (EST)
2.91	2.99	3.26	5.05	5.82	5.70	5.33	5.39	5.52	5.76

This deterioration in affordability of property in Huddersfield over the last couple of years has been one of the reasons why the younger generation is deciding more and more to rent instead of buy their own house. 

... but it’s not the only reason.

A quick look on Money Supermarket today found 169 lenders prepared to offer 75% LTV Buy to let Mortgages and none at 85% LTV.  Lenders have self-imposed a high level of entry for buy to let landlords (i.e. putting down at least 25% of the purchase price in cash).  The BoE don’t need to meddle there!  Also, the Tories have certainly done lots to level the playing field in favour of first time buyers.  For nearly a year now, Landlords have had to pay an additional 3% in stamp duty on any buy to let purchase and over the coming four years, tax rules on landlord’s claiming mortgage interest relief will affect their pocket.  Neither, it doesn’t help that the local Authority sold off council houses in the Thatcher years and so for many on low incomes or with little capital, owning a home has simply never been an option (today or in the past).  

It’s easy to look at the headlines and blame landlords.  First time buyers have been able to access 95% LTV mortgages since 2010, meaning even today, a first-time buyer could purchase a 3 bed semi in Huddersfield for around £140,000 and only need to find £7,000 deposit.  Yes, a lot of money, but first time buyers need to decide what is important to them.  Either save up for a couple of years to save the deposit and go without two annual foreign holidays, the full Satellite or Cable TV package with Sports and Movies costing three figures a month, the latest mobile phone and out socialising ... or not as the case maybe?

I think we as a Country have changed ... renting is returning to be the norm.  So my opinion is, landlords have it tough.  Let’s not blame them for the ‘perceived’ woes of the nation ... because to be frank … we haven’t always been a country of homeowners.  Roll the clock back to 1964, and nationally, 30% of people rented their home from a private landlord – today – its only 15.3% nationally.

If you are an existing landlord or someone thinking of become a first-time landlord looking for advice and opinion and what (or what not to buy in Huddersfield), one source of information is the Huddersfield Property Blog 

‘Flipping’ Heck - Huddersfield Property Values Rise by £12.71 a day

Investing in Huddersfield buy to let property is different from investing in the stock market or depositing your hard-earned cash in the Building Society. When you invest your money in the Building Society, this is considered by many as the safe option but the returns you can achieve are awfully low (the best 2-year bond rate from Nationwide is a whopping 0.75% a year!). Another investment is the Stock Market, which can give good returns, but unless you are on the phone every day to your Stockbroker, most people invest in stock market funds, making the investment quite hands off and one always has the feeling of not being in control.

However, with buy to let, things can be more hands on. One of the things many landlords like is the tactile nature of property - the fact that you can touch the bricks and mortar. It is this factor that attracts many of Huddersfield’s landlords – they are making their own decisions rather than entrusting them to city whizz kids in Canary Wharf playing roulette with their savings.

I always say investing in property is a long-term game. When you invest in the property market, you can earn from your investment in two ways. When a property increases in value over time, it is known as 'capital growth'. Capital growth, also known as capital appreciation, has been strong in recent times in Huddersfield, but the value of property does go up as well as down just like shares do but the initial purchase price rarely decreases.  Rental income is what the tenant pays you - hopefully this will also grow over time. If you divide the annual rent into the value (or purchase price) of the property, this is your yield, or annual return. So, over the last 5 years, an average Huddersfield property has risen by £23,200 (equivalent to £12.71 a day), taking it to a current average value of £166,400. Yields range from 5% a year and can reach double digits’ percentages (although to achieve those sorts of returns, the risks are higher).

However, something I haven’t spoken of before is the more specialist area of flipping property to make money. (flipping - buying a property, carrying out some minor cosmetics and re selling it quickly).  I have seen several investors recently who have made decent returns from this strategy. For example …

·         

One Huddersfield Investor paid £115,000 for a 2 bed terrace on Birdsedge Hill in May 2015. It appears some cosmetic work was done to the property and it was resold a few months ago (November 2016) for £135,000 … 17.39% return before costs (or compound annual return equivalent of 11.10% AER) http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=43541743&sale=88997028&country=england

This demonstrates how the Huddersfield property market has not only provided very strong returns for the average investor over the last five years but how it has permitted a group of motivated buy to let Huddersfield landlords and investors to become particularly wealthy.

As my article mentioned a few weeks ago, more and more Huddersfield people may be giving up on owning their own home and are instead accepting long term renting whilst buy to let lending continues to grow from strength to strength. If you want to know what (and what would not) make a decent buy to let property in Huddersfield, then one place for such information would be the Huddersfield Property Blog. 

How The Rented Sector Has Transformed The Property Market In Huddersfield

How The Rented Sector Has Transformed The Property Market In Huddersfield

The Huddersfield housing market has gone through a sea change in the past decades with the Buy-to-Let (B-T-L) sector evolving as a key trend, for both Huddersfield tenants and Huddersfield landlords.

A few weeks ago, the Government released a White Paper on housing. I have had a chance now to digest the report and wish to offer my thoughts on the topic. It was interesting that the private rental sector played a major part in the future plans for housing. This is especially important for our growing Huddersfield population.

In 1981, the population of Kirklees stood at 377,300

and today it stands at 434,300.

Currently, the private rented (B-T-L) sector accounts for 18.8% of households in the town.  The Government want to assist people living in the houses and help the economy by encouraging the provision of quality homes, in a housing sector that has grown due to worldwide economic forces, pushing home ownership out of the reach of more and more people. Interestingly, when we look at the 1981 figures for homeownership, a different story is told.

63.96% Huddersfield people owned their own home in 1981

27.17% Huddersfield people rented from the Council or Housing Association in 1981

 and 8.87% Huddersfield rented from a Private Landlord

The significance of a suitable housing policy is vital to ensure suitable economic activity and create a vibrant place people want to live in. With the population of Kirklees set to grow to 488,000 by 2037 – it is imperative that Kirklees Metropolitan Borough Council and Central Government all work actively together to ensure the residential property market doesn’t hold the area back, by encouraging the building and provision of quality homes for its inhabitants.

One idea the Government has proclaimed is a variety of measures aimed at encouraging the Build-to-Rent (B-T-R) sector (instead of the B-T-L sector). These include allowing local authorities to proactively plan for B-T-R schemes, and making it simpler for B-T-R developers to offer inexpensive private rented homes.

To do this, the government will invent a distinct affordable housing class for B-T-R, called ‘Affordable Private Rent’, which will oblige new homes builders to provide at least 1 in 5 of a new home developments at a 20% discount on open-market rents and three year tenancies for tenants. In return, the new homebuilders will get better planning assurances.

Private landlords will not be expected to offer discounts, nor offer 3-year tenancies – but it is something Huddersfield landlords need to be aware of as there will be greater competition for tenants.

Over the last ten years, home ownership has not been a primary goal for young adults as the world has changed. These youngsters expect ‘on demand’ services from click and collect, Amazon, Dating Apps and TV with the likes of Netflix. Many Huddersfield youngsters see that renting more than meets their accommodation needs, as it combines the freedom from a lifetime of property maintenance and financial obligations, making it an attractive lifestyle option.

Private rented housing in Huddersfield and Kirklees, be it B-T-L or B-T-R, has the prospective to play a very positive role. 

Huddersfield’s ‘Generation Trapped’ and the £6.51bn legacy

Last week, I wrote an article on the plight of the Huddersfield 20 something’s often referred to by the press as ‘Generation Rent’. Attitudes to renting have certainly changed over the last twenty years and as my analysis suggested, this change is likely to be permanent. In the article, whilst a minority of this Generation Rent feel trapped, the majority don’t – making renting a choice not a predicament. The Royal Institution of Chartered Surveyors (RICS) predicted that the private rental sector is likely to grow substantially by 1.8m households across the UK in the next 8 years, with demand for rental property unlikely to slow and newly formed households continuing to choose the rental market as opposed to buying.

However, my real concern for Huddersfield homeowners and Huddersfield landlords alike, as I discussed a couple of months ago, is our mature members of the population of Huddersfield. In that previous article, I stated that the current OAP’s (65+ yrs in age) in Huddersfield were sitting on £2.78bn of residential property ... however, I didn’t talk in depth about the ‘Baby Boomers’, the 50yr to 64yr old Huddersfield people and what their properties are worth – and more importantly, how the current state of affairs could be holding back those younger Generation Renters.

In Huddersfield, there are 10,077 households whose owners are aged between 50yrs and 64yrs and about to pay their mortgage off. That property is worth, in today’s prices, £1.67bn. There are an additional 12,306 mortgage free Huddersfield households, owned by 50yr to 64yr olds, worth £2.05bn in today’s prices, meaning...

Huddersfield Baby Boomers and Huddersfield OAP’s are sitting

on £6.51bn worth of Huddersfield Property

These Huddersfield Baby Boomers and OAP’s are sitting on 39,093 Huddersfield properties and many of them feel trapped in their homes, and hence I have dubbed them ‘Generation Trapped’.

Recently, the English Housing Survey stated 49% of these properties owned by the Generation Trapped, as I have dubbed them, are ‘under-occupied’ (under-occupied classed as having at least two bedrooms more than needed). These houses could be better utilised by younger families, but research carried out by the Prudential suggest in Britain it’s estimated that only one in ten older people downsize while in the USA for example one in five do so.

The growing numbers of older homeowners who want to downsize their home are often put off by the difficulties of moving. The charity United for all Ages, suggested recently many are put off by the lack of housing options, 19% by the hassle and cost of moving, 14% by having to declutter their possessions and 14% by family reasons such as staying close to children and grandchildren.

Helping mature Huddersfield (and the Country) homeowners to downsize at the right time will also enable younger Huddersfield people to find the homes they need – meaning every generation wins, both young and old. However, to ensure downsizing works, as a Country, we need more choices for these ‘last time buyers’.

Theresa May and Philip Hammond can do their part and consider stamp duty tax breaks for downsizers, our local Council in Huddersfield and the Planning Dept. should play their part, as should landlords and property investors to ensure Huddersfield’s ‘Generation Trapped’ can find suitable property locally, close to friends, family and facilities. 

‘Generation Rent (Forever)’ – 10,892 Huddersfield Tenants have no intention of ever buying a property to call home

The good old days of the 1970’s and 1980’s eh … with such highlights lowlights as 24% inflation, 17% interest rates, 3 day working week, 13% unemployment, power cuts ... those were the days (not)… but at least people could afford to buy their own home. So why aren’t the 20 and 30 something’s buying in the same numbers as they were 30 or 40 years ago?

Many people blame the credit crunch and global recession of 2008, which had an enormous impact on the Huddersfield (and UK) housing market. Predominantly, the 20 something first-time buyers who, confronting a problematic mortgage market, the perceived need for big deposits, reduced job security and declining disposable income, discovered it challenging to assemble the monetary means to get on to the Huddersfield property ladder.

However, I would say there has been something else at play other than the issue of raising a deposit - having sufficient income and rising property prices in Huddersfield. Whilst these are important factors and barriers to homeownership, I also believe there has been a generational change in attitudes towards home ownership in Huddersfield (and in fact the rest of the Country).

Back in 2011, the Halifax did a survey of thousands of tenants and 19% of tenants said they had no plans to buy a home for themselves. A recent, almost identical survey of tenants, carried out by The Deposit Protection Service revealed, in late 2016, that figure had risen to 38.4%, with many no-longer equating home ownership to success and believing renting to be better suited to their lifestyle.

You see, I believe renting is a fundamental part of the housing sector, and a meaningful proportion of the younger adult members of the Huddersfield population choose to be tenants as it better suits their plans and lifestyle. Local Government in Huddersfield (including the planners – especially the planners), land owners and landlords need an adaptable Huddersfield residential property sector that allows the diverse choices of these Huddersfield 20 and 30 year olds to be met.

This means, if we applied the same percentages to the current 28,364 Huddersfield tenants in their 12,973 private rental properties, 10,892 tenants have no plans to ever buy a property – good news for the landlords of those 4,982 properties. Interestingly, in the same report, just under two thirds (62%) of tenants said they didn’t expect to buy within the next year.

.. but does that mean the other third will be buying in Huddersfield in the next 12 months?

Some will, but most won’t … in fact, the Royal Institution of Chartered Surveyors (RICS) predicts that, by 2025, that the number of people renting will increase, not drop. Yes, many tenants might hope to buy but the reality is different for the reasons set out above.  The RICS predicts the number of tenants looking to rent will increase by 1.8 million households by 2025, as rising house prices continue to make home ownership increasingly unaffordable for younger generations.  So, if we applied this rise to Huddersfield, we will in fact need an additional 5,560 private rental properties over the next eight years (or 695 a year) … meaning the number of private rented properties in Huddersfield is projected to rise to an eye watering 18,533 households.

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

Huddersfield First Time Buyers borrow £112m in the last 12 months

Starting with the bigger picture, over the last 12 months in the UK, 1,061,557 properties were sold with a total value of £223.74 bn. To give that some context, ten years ago 1,581,727 properties sold with a total value of £405.56bn, so it can be seen the number of people moving house has dropped by over a third over the last decade.

Whether you are a landlord, homeowner or tenant, it’s always important to keep an eye on the Huddersfield property market, not just from your point of view, but also from every player’s point of view. Over the last 12 months, 2,332 properties have sold (and completed) in Huddersfield, worth £379.1m. Interestingly the number of properties changing hands in Huddersfield has also dropped when compared to a decade ago.

It might surprise you that first time buyers in 2017 will benefit from a slight decline in Huddersfield buy-to-let investors.

Those looking to buy a home in the spring and summer of 2017 will face a far less competitive Huddersfield property market than the same time of year in 2016, when the urgency to beat the buy-to-let stamp duty hike was in full swing.  

Many landlords brought forward their purchases to beat the tax, and since then, the number of buy-to-let purchases has dropped slightly. First time buyers have taken advantage of that and have increased their buying. In fact, looking at the Bank of England figures, this is what UK lenders have lent on buy-to-let properties versus first time buyers over the last 12 months  …

Q4 2015 - £1bn buy-to-let mortgages vs £1.31bn for first time buyers

Q1 2016 - £1.35bn buy-to-let mortgages vs £1.08bn for first time buyers

Q2 2016 - £760m buy-to-let mortgages vs £1.28bn for first time buyers

Q3 2016 - £827m buy-to-let mortgages vs £1.42bn for first time buyers

When looking at the figures for Huddersfield itself, first time buyers have borrowed more than £112.09m in the last 12 months to buy their first home. This is a ringing endorsement of their confidence in their jobs and the local Huddersfield economy. Those 20 and 30 something’s who are considering being first time buyers in 2017 will find that the number of properties on the market has never been as good as it has for quite a while, meaning you have more choice of properties and less competition from so many buy-to-let landlords than a year ago.

Rightmove announced nationally that new seller enquiries are 26% up on the same time last year giving the stoutest indication that we may see a slight ease in the lack of properties on the market. When I look at the Huddersfield market, at this moment in time there are an impressive 709 properties for sale (so lots of choice). All this will be welcome news amongst Huddersfield first-time buyers with a combination of a proportional reduction in new investors and landlords.

2017 will be an interesting year for all homeowners, be they buy-to-let landlords, existing homeowners or future homeowners.  For more thoughts on the Huddersfield property market like this, you might want to visit the Huddersfield Property Market Property Blog https://huddersfieldproperty.blogspot.co.uk/