The 2020 Review of the Huddersfield Property Market

 

Looking back at the Huddersfield property market for 2020, it can certainly be seen as a frenetic game of two halves, albeit with a very long half time in the spring. Between the General Election in mid-December and Christmas, many Huddersfield agents saw an unusually higher uplift in activity in the property market just as we were getting ready for Christmas 2019. Yet once the New Year festivities were out of the way, that pre-Christmas uplift in the local property market was nothing when compared to the bang on Monday 6^th January 2020 with the fabled ‘Boris Bounce’ of the Huddersfield property market. January, February and most of March were amazing months, with the pent up demand from people wanting to move from the Brexit uncertainty of 2018/9 being released in the first few months of 2020.

 

The pandemic hit mid-March, and the Huddersfield property market was put on ice for nearly three months (as was almost everyone else’s lives). Yet at the end of spring, the property market was one of the first sectors of the economy to be re-opened. Every economist predicted house price drops in the order of 10% in the best-case scenario and 25% in the worst yet nothing could be further from the truth.

 

When the lockdown restrictions were lifted from the property market, those three months allowed Huddersfield homeowners to re-evaluate their relationships with their homes. The true worth of an extra bedroom (for an office) became priceless, as people working from home were having to take calls and work from the dining room table. Huddersfield properties with gardens and/or close to green spaces all of a sudden became even more desirable. More fuel was put on the fire of the Huddersfield property market with the introduction of the Stamp Duty Holiday, meaning buyers could save thousands of pounds in tax if they moved before the end of March 2021. This stoked the local property market and now …

 

Property values in Huddersfield are set at 4.3% higher today compared to a year ago.

 

The fallout of that increased demand for a new home meant those Huddersfield  properties on the market coming out of lockdown in early summer with those extra rooms and gardens were snapped up in days for ‘full’ price. Huddersfield buyers were having to spend their Stamp Duty savings on paying top dollar for the home of their dreams. Yet the increased number of properties coming onto the market in the late Summer quenched a lot of that demand and the prices being achieved became a little more reasonable and realistic. This increased the number of properties sold (stc), so much so that, nationally, almost two thirds more homes have been sold (stc) than would be expected at this time of year!

 

However, as we all know, just because a property is sold (stc), it doesn’t mean the property is actually sold. The number of people who have moved home in the last 12 months in Huddersfield, is as you would expect, much lower. Over the last 10 years, on average 2,370 Huddersfield homes have changed hands per year, compared to only 1,216 Huddersfield homes in the last 12 months.

 

So, what is a Huddersfield property worth today? Drilling down to the four types of homes locally, some interesting numbers appear. Looking at the table, you can see what the average property types are worth locally, and within each type, the average price paid in the last 12 months. (So, if the average price paid for the last 12 months is higher than the overall average, that means more higher priced property in that type has sold in the last year compared to the overall average – and vice versa). 

 

	Average Overall Value Today	Average Price Paid in the Last Year
Huddersfield Detached	£293,210	£287,340
Huddersfield Semi-Detached	£160,600	£174,940
Huddersfield Town House/Terraced	£113,440	£121,040
Huddersfield Apartments/Flats	£129,770	£114,850

 

Of course, these are overall average values. To give you an idea what Huddersfield properties are selling for by their square footage, these are those averages …

 

	Average Value per sq. ft. (internal)
Huddersfield Detached	£187.11
Huddersfield Semi-Detached	£170.98
Huddersfield Town House/Terraced	£135.80
Huddersfield Apartments/Flats	£152.95

 

So, what about 2021? Well normally when the country’s GDP drops like a stone (as it did in the Summer of 2020), the property market follows in unison. Yet as the economy went south, the house price growth and activity in the property market went north. This would appear to be a quite remarkable outcome given that economic framework, but it is gradually becoming clear that, as far as the Huddersfield property market is concerned, people’s time in lockdown has been spent reflecting on what they really wanted from their home and has meant that the normal rules of the game simply do not apply…. for now.

 

As Brighouse First-time Buyers are Being Locked Out of the Brighouse Property Market – Rents Have Risen by 3.5%

With the banks reducing the number of low deposit mortgages (i.e. deposit of 10% and below) since Covid-19 hit in the spring, this has meant that the number of Brighouse first-time buyers has been decreasing quickly, meaning many of those would-be Brighouse buyers wanting to make the first step on the Brighouse property ladder will stay in the Brighouse rental sector.

 

This has caused demand to grow amongst Brighouse renters for larger homes to ride out Covid, as they hunker down for the long haul to wait for normality to return to the property market. This has caused

 

Brighouse rents to rise from £500 to the current £517 per month over the last 12 months, an increase of 3.5%.

 

Interestingly, the opposite is happening in Central London, where the rents tenants are having to pay have dropped by 3.8% in the last 12 months, as demand has dropped like a stone. It appears Central London tenants are looking to move out to the suburbs, in search of bigger homes, gardens and green open spaces. For example, the average rent for a 1-bed apartment in St. John’s Wood currently stands at a very reasonable £1,817 per month whilst a 2-bed apartment in Kensington and Chelsea is currently at an average bargain rent of £3,715 per month (yes, they might be low compared to last year, yet for us in Brighouse, that still seems like a lot of money!). Also, there has been further downward pressure on Central London rents, as many Airbnb landlords have dumped their short-term holiday let properties onto the long-term rental market as the tourism in the capital has dwindled because of the pandemic.

 

This has been the sharpest drop in Central London rents since the summer of 2009, when the property market was still stumbling from the Credit Crunch.

 

This means there is a reverse of the trend of the 2010’s (2010 to 2018 to be exact), when initially the London property market was shooting up whilst the rest of the country was in the doldrums. Then, when the rest of the UK did start to rise slowly in 2013, London kicked on even further like a rocket … yet now it appears the opposite is happening.

 

Getting back to Brighouse, according to the Land Registry property values currently stand 2.2% higher than a year ago; this is split down as follows:

 

·         Detached Brighouse homes 2.8% higher

·         Semi-detached Brighouse homes 3.4% higher

·         Townhouse/terraced Brighouse homes 2.1% higher

·         Brighouse apartments/flats 1.8% lower

Yet, do remember, these figures do NOT take into account the prices paid by desperate Brighouse buyers this summer, often paying top dollar to secure the property. This will only filter through in the figures released in the spring.

 

So, why are the banks curtailing the number of low deposit mortgages, meaning that first-time buyers must find a much larger down payment before they are able to buy their first Brighouse property?

 

The reason is the banks are fearful of a house price crash in 2021 (although if you recall I wrote about that a few weeks ago and the reasons why that is less likely to happen). They too are afraid of the frothy nature of the property market since the end of the first lockdown in late spring. The bank is lending its own money to buyers and no mortgage lender wants to be holding an enormous amount of these types of high percentage mortgages if house prices fall in 2021, because the bank would be saddled with negative equity and repossession on their hands (and we all know what that did to the housing market in the late 1980’s and early 1990’s as repossessions rocketed).

 

This can quite clearly be seen in the pricing and availability of low deposit mortgages. As the Bank of England has reduced its base rate to 0.1%, in the last 12 months 10% deposit mortgages rates have actually increased from 2% to 2.8%. Also, when lenders have been offering 10% mortgages throughout the summer, borrowers have had only a 24-hour window to commit before the lender withdraws the mortgage product from the market because of over subscription. As with all economics, if demand is greater than supply, the price goes up. That extra 0.8% doesn’t sound a lot until you realise a first-time buyer would have to pay an additional £167 per month in interest payments on a 10% deposit mortgage, assuming they borrowed £250,000.

 

However, it’s not all doom and gloom for first-time buyers as there are embryonic signs that the 10% deposit mortgage market could gradually be returning to normal, as I have recently heard some lenders taking up to a week for their 10% deposit mortgage offers to run out. Fingers crossed!

 

So, what does all this mean for Brighouse landlords? Those Brighouse landlords with properties with gardens and larger rooms will be seeing increased demand. The ability to have pets in the rental property is also an advantage, and depending on the property, can add a decent premium to the rent that can be charged.

 

One final thought though for all homebuyers in Brighouse, be aware it’s going to be very challenging to get your house purchase through in time to meet the 31^st March 2021 stamp duty holiday cut off if you are starting the process in November. Make sure your lender and solicitor have the capacity to meet that deadline and when you are asked for information, you drop everything to provide it. The odd days’ delay here and there will mean the difference between you getting the keys for your new Brighouse home before the end of March 2021 and saving thousands of pounds in Stamp Duty Tax … or feeling a fool from the 1^st April 2021 and having to pay the tax!

Each Huddersfield landlord could be hit by a £24,094 bill ...and the 5 ways on how all Huddersfield landlords can escape the worst of the coronavirus downturn on their Huddersfield rental property.

With the second lockdown starting on the 5^th November 2020, does this mean Huddersfield landlords can wave goodbye to their Huddersfield buy-to-let investment and see it go up in smoke on the bonfire of buy-to-let dreams, like a Guy Fawkes puppet?

 

With many Huddersfield tenants at risk of losing their jobs after the furlough scheme ends next March and as the reverberations of the coronavirus recession hit this winter, what does this all mean for Huddersfield landlords and what can they do to mitigate the risks?

 

Since the spring, most Huddersfield tenants and buy-to-let landlords have been protected from the coronavirus crisis thanks to the banks with their mortgage payment holidays and job support schemes.

 

Before the second lockdown was announced on the 31^st October, it was expected, that as the furlough and mortgage payment holidays were due to finish on Halloween, there would be some serious fallout from those schemes finishing. One silver lining from the lockdown (if you can call it that) is that mortgage payment holidays and furlough have been extended, yet does all that just kick the can down the road?

 

The question is, what can Huddersfield landlords do to mitigate the financial risk on their Huddersfield buy-to-let investment?

 

1.      Help Your Huddersfield Tenants Get the Financial Support They Are Entitled To 

Billions of pounds are being spent by the Government to help those people whose income has been hit by coronavirus. The better Huddersfield letting agents and self-managing landlords are supporting, guiding and helping those Huddersfield tenants in financial difficulty to gain a better understanding of the Universal Credit (UC) processes, systems and payment levels, to enable their tenants to pay the rent and ultimately indirectly, help their Huddersfield landlord. Also, if you are a Huddersfield tenant, and that support isn’t given when you ask, don’t forget Kirklees Council do hold special cash reserves for discretionary housing payments, which can be utilised to close the gap in rent between what UC pays and your current rental commitments. Also, the Government’s Money Advice Service and Citizens Advice are a good online resource for you to find out what you are entitled to.

 

2.      Adopting, Adapting & Improving Your Huddersfield Buy-to-Let Property

Demand for gardens or office space means Huddersfield landlords will need to think outside the box. Those Huddersfield homes with tenants sharing (e.g. HMO’s and shared houses) might need to price their pre-coronavirus 4 bed sharing house to say maybe a 3 bed sharing house plus a work/office room and, if you haven’t already, installing a top of the range, fast and dependable internet connection could be the thing that swings it. Outdoor space and gardens are really high on Huddersfield housebound tenant’s wish lists, in fact I have come across some Huddersfield tenants demanding that new rental properties have a landscaped garden or those that bought a dog or cat for company during the first lockdown, are looking for their Huddersfield landlords to relax their ‘no pets policy’.

 

3.      Hold On to Your Good Huddersfield Tenants

Those Huddersfield buy-to-let landlords with decent tenants, who find themselves in financial dire straits should consider attempting to keep them, even if their own monetary circumstances mean they have to decrease their rent somewhat over the short term. Now of course, I would expect tenants need to prove their circumstances, yet if their plight was real, surely it would be a wise choice to reduce the rent by perhaps £50 a month and support your tenants? You know they are taking great care of your Huddersfield rental property and rather than risk the issue of advertising your empty buy-to-let property  – particularly when there is no assurance you will achieve your existing rent and ultimately risk drawn-out void periods with no rent coming in at all. What I would suggest therefore,  in such circumstances, is that you create a new Assured Shorthold Tenancy agreement with a longer term with your existing tenant at a lower rent – a temporary measure but with peace of mind for both parties which can then be reviewed once that tenancy is up for renewal.

 

4.      Carry out Firmer Checks on Your Prospective Huddersfield Tenants 

Many private Huddersfield landlords and a few slipshod Huddersfield letting agents tenant checks are somewhat lacking in their depth. Trust me, there is tenant referencing … and then there is ‘proper’ forensic tenant referencing. As certain parts of the British economy have been hit harder than others, Huddersfield landlords must consider when choosing their new tenants, the type of work they do or who their employer may be, to enable them to decide on their future capacity to meet their rental commitments.

 

5.      Rent Guarantee Insurance for Your Huddersfield Rental 

There are still insurance companies offering landlord rent guarantee insurance if your tenants become unable to pay the rent. Many insurance firms removed these insurance products in the first lockdown, yet some have returned to the insurance market although insurance premiums have gone up in price. Remember to check the small print of the insurance, although you will get a lower insurance premium if you can show stringent tenant referencing (as per the previous point). 

 

The Nuclear Option - Eviction

 

Huddersfield landlords need to be conscious that, should their tenancy run into trouble, the Government have changed the rules when it comes to eviction during the coronavirus pandemic. Going into the first lockdown, there was already a backlog in the courts and now, just before going into the second lockdown, bailiffs have been instructed not to enter rental properties in high risk Tier-2 and Tier-3 Covid-19 areas.

 

Eviction really does have to be the very last option. Negotiation or arbitration will nearly always deliver quicker and improved outcomes for both parties. Huddersfield landlords who do come to mutually agreeable arrangements with their tenants by briefly reducing the rent, or allowing payment holidays with legally enforceable pay back schedules should ensure they get the agreed terms in writing and run by a solicitor or their agent (feel free to drop me a note if you need advice).

 

However, if eviction is required, it doesn’t mean the tenant gets off ‘scot free’. Evicted tenants, depending on their circumstances, will either be placed temporarily into an inexpensive B&B, asked to move in with family or given one of the local authorities temporary accommodation properties, with the goal to then move them into long term council accommodation (as the chances of obtaining private rented accommodation would be slim with agent’s heightened reference checks – more of that at the end).

 

The Potential Cost of Evicting a Problem Huddersfield Tenant

 

The average rent for a Huddersfield property currently stands at £721 per calendar month.

 

Thankfully, evictions are very rare. Last year before lockdown, tenants from 201.4 rental properties were evicted each working day in the UK ... but if yours was one of those, that is still a potentially large cost.

 

Working on the basis that most evictions from the first rent not being paid, through to eviction, refurbishment of the kitchen, bathroom, carpets and décor (because often these do need sorting/replacing) were taking on average between eight to nine months before coronavirus hit, (plus the mortgage payments), this means a Huddersfield landlord could be hit by a £24,094 bill, broken down as follows:

 

Missing rent (8½ months)	£6,129
New kitchen	£3,535
Bathroom	£2,031
Carpets	£2,213
Redecorate	£1,937
Agents fees	£643
Legal fees & court fees	£3,500
Mortgage payments	£4,106
Total	£24,094

 

What that would be now is anyone’s guess – yet it could be a lot more.

 

This is why it is so important to get the best tenant from day one. Many Huddersfield tenants, who know they wouldn’t pass the references of letting agents, are attracted to those private landlords who don’t use a letting agency, as they know their referencing checks are not as strict and may be a softer touch. That’s not to say going with a letting agent is a guarantee you won’t need to evict; it just means the chances are much, much smaller. Like anything in life - it’s a choice.

 

Whether you are a Huddersfield landlord who uses a letting agent or not and feels their reference checks are not to the standard or level you might hope or if you want a chat about the best rental guarantee insurance, then give me a call ... what have you got to lose?

Huddersfield 2nd & 3rd Time Buyers Finding it Tougher (and Slower) to Move up the Huddersfield Property Ladder

 Post lockdown, the need for Huddersfield families who want bigger homes has meant Huddersfield homebuyers must now pay considerably more to trade up to that larger home…

 One thing that has come out of lockdown has been the inexorable movement of Huddersfield households wanting to upsize to a larger home. Often considered to be first time buyer properties, the smaller 1^st step on the property ladder one and two bedroom properties are selling quite well, yet demand for those properties on the 2^nd and 3^rd step rungs on the Huddersfield property ladder (i.e. the three or /four bedroom homes) has been even greater.

This demand has been driven by Huddersfield buyers looking for more living space, especially those looking for an area or room to work from home (be that a bedroom, reception room or even an outbuilding converted into a study).

The average asking price of a 3 bed Huddersfield home is £182,300, whilst for a 4 bed Huddersfield home it stands at £342,100

As you can see, quite a jump for an extra bedroom! The heightened contest for 2^nd and 3^rd step Huddersfield homes for that extra bedroom has pushed demand to a record in October for those looking to take the next step up the ladder. Historically, as a family and its household income grow, the need for more space has permanently been the No.1 reason for moving home, yet now there is a new need for additional space to facilitate people working from home. This means not only do we have growing families wanting larger Huddersfield homes, there are also the people needing the same larger homes for space for a home office. Therefore, looking at the current stats, as you can see, the Huddersfield property market is doing quite well…

60.9% of all 3 bed and 55.0% of all 4 bed homes

in Huddersfield are sold (subject to contract)

 

Roll the clock back to pre-Covid and ask any Huddersfield homeowner who had enough bedrooms for their children if they wanted an additional bedroom, and most homeowners would say that was very much a ‘nice to have’, yet not a ‘must have’. With us all being cooped-up over the spring this year, demand for additional rooms is at a high, with those presently looking for their next larger Huddersfield home are probably going to find that only offers close to (if not sometimes over) the asking price will be accepted.

Even though no properties sold during lockdown, putting the Huddersfield (and UK) property market on hold for many months, many more people buying their next Huddersfield home will have more than made up for it since lockdown was lifted as the portals have stated if the UK property market remains at its existing trajectory, then the number of properties sold YTD by the end of October 2020 will be greater than YTD October 2019.

Yet all these properties sold are causing another issue. Just because a property becomes Sold Subject to Contract (SSTC) doesn’t mean the property is actually “sold”. Before going into Covid, it was taking approximately 19 weeks between agreeing a sale price (and instructing lawyers) to completing the sale. Yet, because we are nationally running at 140% to 150% of properties SSTC (than where we normally are at this time of year), many of my estate agents colleagues are having to manage expectations with buyers and sellers, and tell them that the date they are going to move will take a little longer.

The elephant in the room is that the temporary stamp duty holiday ends on the 31^st March 2021

It sounds an age away, yet trust me, nothing could be further from the truth.  Adding an extra month for the additional homes in the bottleneck means even if the sale of your Huddersfield home was agreed today, that would take us to the 3^rd week in March ... that’s cutting it very close for the stamp duty holiday.

It is so fundamental for buyers and sellers of Huddersfield homes to work meticulously with their estate agent, solicitor and mortgage lender. For example, there are less staff in the local authorities to do the local searches, bank staff are working from home meaning mortgages are taking much longer to get approved, and conveyancer/solicitors are snowed under with work. Therefore, if you get a document that needs filling in, are asked to provide documents, pay disbursements or questions need answering, do it immediately and without delay. A day here and day there will snowball and could mean you miss the stamp Duty holiday … and that could cost you thousands and thousands of pounds.

The bottom line is that we haven’t seen this sort of pressure on the UK property market since 1987, when dual-MIRAS was abolished. Now, as we are slowly starting to come out of Covid, with many legal and banking staff working remotely or still on furlough, the perfect storm has occurred with unprecedented demand from buyers looking to move post lockdown. The best advice I can give is, as soon as you put your property onto the market, find a solicitor that has the capacity to work with you, then instruct that solicitor to start work immediately to prepare the paperwork, so once you have a buyer, things can move more smoothly and quickly. The last thing you want is to lose out on saving thousands of pounds by missing the stamp duty holiday by a whisker.

Good (and Bad!) Reasons to be a Landlord

 The buy-to-let market in Huddersfield is about to enter a challenging 12 to 24 months. Yet by looking back at the last recession and what is happening now, there are vital lessons all Huddersfield landlords can learn to protect themselves, and in fact create opportunities for themselves both in the short term and ultimately the longer term. For the purposes of this article, I would like to split these and look at the challenges and then the opportunities.

 

So, let’s consider the challenges ahead for Huddersfield landlords…

 

Overall, the impending rise in unemployment stands to encumber tenants’ ability to pay their rent, the rents being achieved and the possible Capital Gains Tax changes might mean an increase in tax paid by Huddersfield landlords when they come to sell their Huddersfield buy-to-let properties.

 

Let’s look at these three points in greater detail. Firstly looking at your Huddersfield tenants ability to pay the rent; the Furlough Scheme certainly did help soften the blow, helping out 8.9 million people in May (out of 30.5 million who were eligible for it) and at the last count in early August, this thankfully had reduced to 5.3 million people (meaning 15.86% of workers are still on furlough). However, it cannot be denied the economic fallout from Coronavirus has already placed some tenants under economic strain. As the Furlough Scheme finishes at the end of October, commentators are suggesting the number of tenants either incapable of paying their rent, or requesting a reduction in their rent, is predicted to increase as we go into autumn and early winter.

 

The ultimate sanction against non-payment of rent is legal proceedings although guidance from the Government has recommended that landlords and tenants should work together and deplete all possible options before starting eviction proceedings. Yet many Huddersfield landlords are feeling the pressure as many mortgage payment holidays will be coming to a close at the end of September. Some Huddersfield landlords can indisputably see that their tenants are finding it tough and they are willing to work with them, but they can only make allowances go so far.  Landlords aren’t running a charity and I would stress to any tenant that finds themselves being made unemployed in the months to come to apply for Universal Credit as soon as possible, which should help with their rental payments. With regard to the eviction process, the Government have changed the rules a number of times in the last few months, so if you want an update, don’t hesitate to contact me, whether you are client or not – I am just happy to help.

 

Secondly, it’s interesting in central London, there has been a glut of Airbnb properties coming onto the market because of a lack of tourists to rent them on a short-term let. A greater supply of rental properties has meant a downward pressure on rents in London of 2.1%. I don’t think this is so much of an issue in Huddersfield as…

 

Huddersfield rents are 3.49% higher year on year

 

Thirdly, there is talk that the Chancellor, Rishi Sunak, is looking at changing the Capital Gains Taxation rules.  As property is the biggest asset that most people own, this is also reason for concern for Huddersfield buy-to-let landlords. Currently, Capital Gains Tax on sales of buy-to-let property is levied at 18% for basic income tax rate payers and 28% for higher rate income taxpayers. There is talk the capital gains made on the landlord selling their buy-to-let property could be taxed at the landlord’s income tax rate.

 

Yet before you all start selling your Huddersfield portfolios before November’s budget, any changes in Capital Gains Tax would be immediate. That means to ensure you didn’t come foul of the potential rise in the tax, you would have to have to sell your Huddersfield portfolio at a ‘fire sale price’ in days and have a solicitor that could do the conveyancing in 3 weeks (whilst it is taking 19 weeks on average for buyers to sort their legal work out) and the buyer be a cash buyer because banks are taking months, not weeks to sort finance. This is just something we are going to have to take on the chin!

 

Let us now consider the opportunities ahead for you Huddersfield landlords…

 

As the country officially entered its first recession since 2009, uncertainty in any markets (be it property or stocks and shares, etc.) causes investors to vacillate over whether or not to take the jump. Nevertheless, there are numerous indicators that appear to show this is, indeed, a good time to either become a buy-to-let Huddersfield landlord or expand one’s property empire and buy more property ... let me explain.

 

Firstly, assets (such as gold and stocks and shares) are great, yet if they aren’t producing income and cash – that doesn’t pay for your day-to-day living. Gold doesn’t create any income and many FTSE companies won’t be paying dividends for a while. Government Bonds are currently earning their investors 0.2% (no - that isn’t a typo) and the best savings accounts are achieving 1.1% with a 120-day notice period, so where are you going to invest your hard-earned money?

 

The average Huddersfield buy-to-let property

will earn a monthly return of 6.96%

 

Of course, deciding on the right Huddersfield property is crucial to get a good rental income and return. I have seen so many Huddersfield first-time landlords buy with their heart and not their head. Buying your own home is more heart than head but buy-to-let is a completely different kettle of fish. There is the inverse relationship between income (rent) and capital growth (how much it will go up in value in the future) i.e. as one goes up, the other tends to go down – so getting the balance for your needs is vital. Again, I can advise on that for you.

 

Secondly, with the stamp duty holiday and the pent-up demand for people wanting to move home in Huddersfield (discussed many times recently in this blog), the Huddersfield property market is certainly very buoyant at the moment, yet even the most optimistic agents say it cannot last. Whether the market goes pop or has a slow and steady puncture, the market will cool in 2021. The recession will mean some people are less able to afford a mortgage. This means that if Huddersfield property values do ease off in 2021, you may be able to get a great buy-to-let deal if you are planning on becoming a Huddersfield landlord or expand your property empire as an existing landlord.

 

Also, if the property market does find property prices realign to a new normal in 2021/2, house sellers may find it difficult to get a good price on their Huddersfield home during a recession, meaning many house sellers may be more agreeable to sell their property at a lower price.

 

Third, if people aren’t buying, they still need a roof over their head and the council aren’t building any council houses, meaning the private sector will need to take up the slack.

 

Rightmove reported tenant demand grew by a third in

May 2020 when compared to the same month in 2019

 

Therefore, if you are still unsure about becoming a Huddersfield landlord, knowing that more Huddersfield people want to rent should help you feel more comfortable as the risk of ‘running out’ of renters interested in your Huddersfield property is minimal. Yet again, please don’t go buying any old Huddersfield property, as it’s fundamental that you make a good investment from the start in order to see a good return on your investment.

 

If Huddersfield property values do fall in 2021 (as in 2009),

tenant demand for Huddersfield property will only go up

 

Fourth, the Government reduced stamp duty with the sole aim to benefit the property market. The purchase needs to complete by the end of March 2021, which means you will need to have bought the property by November at the latest (as obtaining finance and legal work is taking at least 19 weeks). A word to the wise though, that whilst the saving in Stamp Duty delivers some up-front saving for those buying a buy a let property, don’t get carried away and use that saving in the purchase price you pay. Certain sectors of the Huddersfield property market are seeing some very inflated prices, meaning if you go into battle for a show home quality semi-detached house within a stone’s throw of the best school, you will be fighting against buyers who want it for themselves and are prepared to pay top dollar for it, meaning some landlords could end up paying more for a property. My advice, if you want to save on the Stamp Duty, there are bargains to be had – you just have to know what you are looking for (again, as mentioned in point 1 – I am here to help on that whether you are a client of mine or not). The other option would be ‘just hold back’ until after 31 March 2021, when Huddersfield property prices could ease.

 

Fifth, reports that the mortgage lenders are imposing stricter conditions are true, yet even during Covid, many lenders are seeing buy-to-let landlords as a safer option to lend their money to. In June alone, the number of buy-to-let mortgage products rose by 19.2% (to just over 1,700) meaning if you have a decent deposit of 30% upwards, you are likely to find something that fits your needs (at the time of writing this article, the Birmingham Midshires had a buy-to-let 5-year fixed rate mortgage at 1.94% and Santander at 2.04% ... this is cheap money in anyone’s language). Mortgage rates are ever becoming more economical, which is a great motivation for anyone wanting to get a foot on the Huddersfield buy-to-let property ladder.

 

Finally, words cannot portray the feeling of being able to see and touch one’s investment like the sensation of bricks and mortar. Buy-to-let investment has to be seen as a long-term investment yet, for many, that is a source of financial security. Of course property values might go south next year (but they might not!), whereas there may be intervals where it’s more problematic to sell because property values will be too low, as is normally the situation throughout a recession, there will also be times where Huddersfield landlords will make a nice profit when selling their buy-to-let homes. Like all things in life - it’s all about the timing.

 

Huddersfield property values are 181% higher than 20 years ago

 

If you’re looking to invest but are not interested in stocks and shares (and you understand that your money may be tied up for a while) then the Huddersfield buy-to-let market could be for you.

 

To conclude, buying the right Huddersfield property at the right price to start with, presenting the property in the best way to get the best tenant, fully checking out and referencing the tenant to ensure they have a good track record of being a good tenant that doesn’t trash the property and has always paid the rent on time in the past and then finally, managing the property to ensure your property complies with the 200+ legislations and regulations of rental property, so you can sleep well at night … all to ensure the property is returned at the end of the tenancy to you in good order is what nirvana looks like.

 

Of course, buy-to-let does come with some risks and challenges, but it’s all about mitigating those risks. Also, there is no denying that buy-to-let also comes with a lot of opportunities as well. If you are a landlord with another agent or even a Huddersfield landlord that manages the property themselves, feel free to drop me a message, email or pick up the phone and let’s chat about your personal goals when it comes to buy-to-let … because what have you got to lose? Surely 15/20 minutes of your time to get great insight and inside track is worth it?

 

Remember, the choice is yours!

The Huddersfield Property Market Post-Lockdown - the First 100 Days

 With only around 1 in 4 Huddersfield house sellers actually selling their home in the last month, Huddersfield sellers and buyers will need to continue to be pragmatic if the surprisingly strong current levels of activity in the Huddersfield property market are to be sustained.

 

To start, we had the once in a lifetime event of the credit crunch in 2008, we then had another once in a lifetime event with the Brexit vote in 2016 and now the mother of all ‘once in a lifetime’ events, Coronavirus in 2020 – three once in a lifetime events in the space of 3 Olympic Games!

 

The doom-mongers forecast that the British property market would drop like a lead balloon  on the scale of the 1989 housing crash (where property values dropped by 30.87% in a couple of years) but would be nothing compared to the tsunami that was Covid. Yet in the first 100 days of the property market coming out of lockdown, behavioural and economic changes mean that many Huddersfield homebuyers are now even more dedicated to moving home and the Huddersfield property market is doing quite well.

 

Going into lockdown, the effect on activity in the Huddersfield property market during those two months was expectable and predictable as it was placed in suspended animation during April and May. When the Huddersfield property market re-opened in mid-May, nobody predicted what happened next. Of course, many of us in the property industry estimated some release of pent-up demand from the Boris Bounce, yet nobody anticipated such a ricochet in activity in the Huddersfield property market.

 

This is particularly interesting when one considers GDP dropped by 20.4% in Q2 2020 (fascinating when compared to notable historic times when it dropped by 13.8% in WW2 and 16.7% in WW1), yet amidst the largest contraction in the UK economy ever in a single quarter, what wasn’t expected was an increase of potential property buyers and sellers wanting to move post-lockdown.

 

Some have cited this boost to the property market on a number of factors. Firstly, we have had the Stamp Duty Holiday, others have pointed at the never seen before 0.1% Bank of England base rates making mortgages cheap, then we had the furlough scheme which protected so many jobs and finally, the pent-up demand from the Boris Bounce.

 

Yet, when one actually talks with Huddersfield buyers and sellers, whilst all of them cite one or two of the above reasons, all of them mention and talk about how the lockdown has made them re-evaluate and reconsider how they want to live, their work-life balance and where they want to live. This is also reflected with tenants changing their requirements when looking for a property to rent (so Huddersfield landlords – be aware of this).

 

Demand for apartments in the centre of Huddersfield has eased off, whilst demand for property with a good-sized garden or other outside space has increased. One question we get asked all the time is also the broadband speeds, although they are quite decent in Huddersfield (the average broadband in our local Council area being 42.4 Mbps download and 9.3 Mbps upload).

 

So, with record numbers of Huddersfield properties coming on to the market – is it boom time for Huddersfield homeowners?

 

Of the 566 properties that have come onto the market in Huddersfield over the last month, only 137 of them have agreed a sale (a percentage of 24.2%)

 

That means around 3 in 4 Huddersfield people that have placed their property onto the market have not found a buyer yet.

 

Yes, the Huddersfield property market is good, yet the number of people who have placed their property on the market has also gone up. Huddersfield estate agents have never been so busy putting property on the market and I feel sorry for the chap who is putting up all the for-sale boards – his wife hasn’t seen him in daylight for weeks!

 

But that does mean you are in competition with so many other properties on the market (the number of properties coming on to the market typically at this time of the year is about a third to half less). The Stamp Duty boost ends in March 2021, so that means you need to have found a buyer by November at the very latest. By overegging your asking price, to test the market, might mean you will lose out on this hiatus and could end up missing the boat!

 

The prices being achieved for the Huddersfield properties that have been selling have been fair and realistic and have stood up much better than many were originally predicting.

 

Yet as the country looks forward, given the ambiguous nature of the outlook for the British economy and the possibility that Covid-19 may be with us for a little while yet, I must implore Huddersfield property sellers to be realistic with their asking price so a greater number of you who want to make the move, are able to do so.