Percentage of Homeowners with a Mortgage by Age

 

The graphic provides a clear insight into the percentage of homeowners with mortgages across different age groups in the UK.

 

Interestingly, the data reveals that 81% of homeowners aged 18 to 24 have mortgages, which might be lower than expected given the financial challenges typically faced by younger adults. This could be due to parental support?

 

The 25 to 34 age group sees the highest percentage at 92%, reflecting the peak period of mortgage acquisition. As age increases, the percentage of homeowners with mortgages decreases, with 87% in the 35 to 44 group and 77% in the 45 to 54 group. This trend continues significantly in older age groups: 55 to 64-year-olds at 39%, and only 7% for those aged 65 and over. This sharp decline highlights the natural progression of mortgage repayment over a homeowner's life.

 

The statistics of Huddersfield homeowners with mortgages, broken down by age, should be released later this year or early next year. Once they have been, we will share them with you.

 

In the meantime, do you have any observations or comments on what you see regarding the UK figures? Any surprises?

Huddersfield Property Market - 1979 vs 2024

 

Huddersfield Property Market - 1979 vs 2024   Roll the clock back to 1979, a year marked by a seismic shift in the UK government with Margaret Thatcher coming to power. This was a momentous time for the country, symbolising a new direction. Fast forward to 2024, and we could be about to experience another significant change with Sir Keir Starmer leading the Labour Party to victory. Such pivotal moments often set the stage for substantial changes in various sectors, including the property market. This article explores the evolution of Huddersfield's property market from 1979 to the present day, highlighting the long-term benefits of homeownership and the dynamics of the buy-to-let market.   Huddersfield Property Values Since 1979 Reflecting on the changes since 1979, property values in Huddersfield have soared by an astounding 1044.9%. The average Huddersfield home has risen in value from £17,703 in 1979 to £202,689 today. To contextualise this, inflation over the same period has only been 374.7%. This dramatic increase underscores why property ownership has become increasingly challenging for many, making it an attractive proposition for landlords.   Shifts in Property Ownership in Huddersfield Examining local authority data for Huddersfield in 1979, 27.2% of residents lived in council/social houses. Today, that figure is 14.8%. This significant decline can be primarily attributed to Margaret Thatcher's policy that allowed council tenants to purchase their homes. Meanwhile, the private rental sector has more than doubled, with the proportion of privately rented properties rising from 8.9% to 19.3%. Contrary to what one might expect, the homeownership rate in Huddersfield has grown over the years. In 1979, 64.0% of the Huddersfield area population owned their homes. Today, this figure stands at 65.9%.   The Evolution of the Huddersfield Buy-to-Let Market The backdrop of reduced council house availability and a growing private rental sector sets the stage for the buy-to-let market in Huddersfield. Historically, this market has relied heavily on property value appreciation, often at the expense of yield. However, recent changes in tax laws and landlord-tenant regulations are reshaping this landscape. While challenging for some, these regulatory changes present opportunities for astute investors. Landlords might need to reassess their strategies, adjust their financing methods, or explore investment opportunities beyond Huddersfield. This shift will likely highlight investments with healthier yields, fostering long-term stability over short-term speculation.   Long-Term Investment vs. Short-Term Gains As we consider the value of buying a home versus the allure of short-term investments, it's essential to understand the broader implications for Huddersfield homeowners and landlords. The substantial increase in property values since 1979 illustrates the long-term benefits of homeownership. Despite market fluctuations, owning a home has historically provided significant financial returns. Short-term investments, while potentially lucrative, carry higher risks and can be influenced by transient market trends. The recent changes in the property market and evolving regulations further complicate short-term investment strategies. For Huddersfield homeowners, the focus should be on long-term value appreciation, stability, and sustainable returns.   Opportunities for Huddersfield Landlords The current market presents unique opportunities for Huddersfield landlords. The regulatory changes might cause some landlords to panic, leading to reduced competition for lucrative buy-to-let properties. This scenario offers a more stable environment for knowledgeable and experienced landlords to thrive. The emphasis will shift towards properties with strong yield potentials rather than speculative short-term gains. In this evolving market, it’s crucial for Huddersfield landlords to stay informed and adapt their strategies accordingly. This might involve exploring different property types, adjusting rental models, or diversifying investments to include areas with better yield prospects. The key is to maintain a long-term perspective, focusing on sustainable growth and stable returns.   Final Thoughts Reflecting on the dramatic rise in Huddersfield property values since 1979, it's clear that long-term property investment can yield substantial returns. While the market has undergone significant changes, the fundamentals of property investment remain robust. For Huddersfield homeowners and landlords, the challenge is to navigate the evolving landscape with a focus on long-term value and stability. Opportunities are abundant for those who are prepared to adapt and embrace change. As we look ahead, the emphasis on yield and sustainable investment strategies will become increasingly important. For those interested in learning more about the Huddersfield property market, I invite you to explore the insights available on my Huddersfield property market blog articles. You’ll find a wealth of information dedicated to navigating the complexities of the property market in Huddersfield.

 

Key Points from the King's Speech 2024 for Huddersfield Homeowners and Landlords

The King’s Speech at the State Opening of Parliament sets the agenda for the government's priorities. This year's speech, delivered by King Charles, is the first from a Labour government since 2020 following the recent general election.

With 30+ bills highlighted, there are significant plans, though nothing particularly ground breaking or seismic for Huddersfield homeowners or landlords.

1.     The Renters' Rights Bill

A major focus is the Renters' Rights Bill, Labour's version of the previous Renters (Reform) Bill. This aims to overhaul the private rental sector in England, ending tenant mistreatment and providing a secure step up for aspiring first time buyers.

Key proposals include:

• Abolishing Section 21 with clearer grounds for possession.
• Introducing 'Awaab's Law' with clear legal expectations for landlords.
• Strengthening tenant rights, allowing challenges to rent increases and preventing rental bidding wars.
• Creating a digital private rented sector database for landlords, tenants, and councils.
• Requiring landlords to consider tenants' requests to keep pets, with the option for insurance against pet damage.
• Implementing a Decent Homes Standard for the private rental sector.
• Enhancing local councils' enforcement powers to target rogue landlords.
• Establishing a new ombudsman service for dispute resolution.
• Making it illegal to discriminate against tenants on benefits or with children.

Most of these points were in the Tory Renter’s Reform Bill – so there is nothing here new or particular scary for the decent landlords out there.

2. Planning and Infrastructure Bill

Labour aims to accelerate housebuilding and infrastructure improvements through the Planning and Infrastructure Bill. The bill focuses on:

• Increasing the capacity of local planning authorities.
• Modernising local planning committees.
• Rationalisation the planning system for the delivery of critical infrastructure.

This legislation will apply to England and Wales, with some aspects relevant to Scotland.

3. Leasehold and Commonhold Reform Bill

Labour plans to publish draft legislation to extend the Leasehold and Commonhold Reform Act 2024. The goal is to provide homeowners with greater rights over their properties, including:

• Addressing ground rent issues.
• Reinvigorating commonholds.
• Putting into action the remaining Law Commission recommendations.

These legal reforms will affect England & Wales only.

Again, it must be stressed, all these matters above are not law yet, just what the Government plan to introduce to parliament to make law in the future.

Should you have any questions about any of this, do not hesitate to contact me on 01484 548126

Embarking on the Landlord Journey: Insights for Aspiring and Seasoned Landlords in Huddersfield

Property investment has long been a staple in British retirement planning.

 

The introduction of the buy-to-let mortgage over a quarter-century ago marked a significant turn, presenting opportunities for dual returns: rental income in the short-term and capital growth in the long-term. You can see why there are a substantial number of Huddersfield landlords who view property investment as a cornerstone of their retirement strategy.

 

However, this path is full of challenges. Recent shifts in tax and regulatory landscapes, coupled with escalating interest rates, have imposed pressures on profitability, compelling some landlords to reconsider their positions. Thus, becoming a landlord in Huddersfield necessitates meticulous research and a strategic approach.

 

The Foundations of Buy-to-Let Mortgages in Huddersfield

A critical step in this venture is securing a buy-to-let mortgage, a process distinct from obtaining a homeowner loan. Lenders assess buy-to-let applicants based on an interest-coverage ratio (ICR), which demands that rental income meets or exceeds a certain percentage of the monthly mortgage interest (a minimum of 125% for standard taxpayers and 145% for higher-rate taxpayers). Additionally, many lenders require that buy-to-let borrowers have a minimum annual income outside of rental earnings to mitigate dependence on rental income.

 

Regarding the initial investment, a typical deposit hovers around 25% of the property's value. The borrowing landscape has experienced upheavals with the Bank of England's recent base rate increases. However, the average rate for a five-year fixed buy-to-let mortgage has witnessed a reduction in rates recently. For example, at the time of writing, HSBC has a 5-year BTL mortgage at 4.84% with a 75% Loan to Value (i.e. you put down a 25% deposit) with an arrangement fee of £1,999. Prospective Huddersfield landlords must judiciously consider these factors, evaluating the sustainability of their investment against potential interest rate hikes.

 

Understanding Costs and Preparations

The financial commitment extends beyond the deposit. Prospective landlords in Huddersfield should account for additional expenses like stamp duty, which includes a 3% surcharge for second homes. Furthermore, maintaining a contingency fund for maintenance and unforeseen rental voids is prudent. It's advisable to earmark approximately 1% of the property’s value annually for repairs and upkeep.

 

Navigating the Buy-to-Let Landscape

Investment in Huddersfield buy-to-let properties is not merely a financial decision but also an emotional one. Landlords must be prepared for the demands of property management, ranging from addressing maintenance issues to dealing with tenant-related challenges. The complexity of landlord responsibilities is underscored by over 150 pieces of legislation governing the sector, a figure poised to rise with impending regulations.

 

Demand & Supply of Huddersfield Rental Properties

The Huddersfield rental market has experienced a sustained period of significant rental inflation over the past few years. Despite that, Zoopla recently stated that demand for rental properties on its portal was 51% higher in Q3 2023 than the five-year average.

 

However, even though demand is higher, the long-term supply of rental properties coming onto the market in the Huddersfield area has dropped.

 

In the Huddersfield area (HD1-HD5, HD7/8), the numbers of properties being let over the last six years are as follows.

 

In 2018, an average of 238 properties were let per month in the Huddersfield area.

In 2019, an average of 234 properties were let per month in the Huddersfield area.

In 2020, an average of 197 properties were let per month in the Huddersfield area.

In 2021, an average of 171 properties were let per month in the Huddersfield area.

In 2022, an average of 191 properties were let per month in the Huddersfield area.

In 2023, an average of 206 properties were let per month in the Huddersfield area.

 

 

 

So, we have increased demand and reduced supply, which can only mean rents will continue to grow as they have for the last couple of years.

 

This ongoing imbalance between supply and demand is a consistent characteristic of the rental market throughout all regions and countries in the UK. Currently, the annual rent growth rate in the UK stands at just over 10%. It's not good news for tenants, yet it still makes buy-to-let financially viable for most Huddersfield landlords, especially as interest rates have risen significantly in the last few years.

 

Rent Adjustments and Tenant Relations in Huddersfield

For landlords, understanding the regulations surrounding rent increases is crucial. These rules vary depending on the tenancy type, with periodic tenancies allowing for annual rent reviews. Ensuring transparent communication and fair practices in rent adjustments can foster harmonious landlord-tenant relationships.

 

The Eviction Process: A Delicate Matter

Eviction is a process governed by strict legal parameters. The anticipated changes in the Renters’ Reform Bill, particularly concerning Section 21 evictions, are set to alter the landscape, emphasizing tenant protection. Landlords must be well-versed in these regulations to navigate tenant eviction legally and ethically.

 

Conclusion: The Role of Expertise in Property Investment

Having a knowledgeable and experienced guide is invaluable in the intricate world of property letting. As a seasoned agent in Huddersfield, I offer a wealth of expertise and insight, making me and my team an ideal partner for both novice and experienced landlords.

 

Whether navigating the complexities of buy-to-let mortgages, understanding the nuances of property investment in Huddersfield, or managing tenant relationships, our proficiency is a vital resource for anyone looking to explore or deepen their involvement in the property market.

 

In conclusion, the journey to becoming a landlord, especially in a market like Huddersfield, rewards careful planning, informed decision-making, and strategic foresight. With the guidance of seasoned professionals like us, Huddersfield landlords can navigate the challenges and complexities of the property market, ensuring their investment not only endures but thrives.

 

Rental Market Dynamics: A National & Regional Overview with a Focus on Huddersfield

The UK rental market has once again demonstrated its resilience and dynamic nature.

 

Recent figures state that the average advertised rent for newly listed properties in the UK last month was £1,787 per calendar month (pcm).

 

The average for the UK excluding Greater London is £1,211 pcm (and Greater London on its own is £2,989 pcm).

 

In our region of Yorkshire and Humber, the average rent currently stands at £912 pcm.

 

Rents in Yorkshire and Humber have grown tremendously.

 

·         Rents in Yorkshire and Humber one year ago (Oct 22) were £830 pcm, a growth of 9.82%

·         Rents in Yorkshire and Humber three years ago (Oct 20) were £688 pcm, a growth of 32.48%

·         Rents in Yorkshire and Humber five years ago (Oct 18) were £645 pcm, a growth of 41.32%

·         Rents in Yorkshire and Humber seven years ago were (Oct 16) £671 pcm, a growth of 35.88%

 

Looking specifically at Huddersfield (HD1-5, HD7-8), the average rent in Q3 2021 was £634 pcm, for Q3 2022, it was £716 pcm and for Q3 2023, it has been £785 pcm.

 

(Quarter 3 for Huddersfield was used to calculate the average as the sample size is much smaller than regional or national stats).

 

A persistent disparity between supply and demand strongly influences this rise in rents.

 

Demand from prospective tenants is intensifying, but there aren't enough UK rental properties to accommodate them. That is also true for Huddersfield tenants.

 

As a snapshot, one of the major property portals stated the average rental property in the country now receives approximately 25 enquiries from potential tenants. This is a striking contrast from the average of eight enquiries recorded in the pre-pandemic era.

 

Furthermore, the number of tenants looking to move within Britain has surged by just over 40% since 2019. On the other side of the coin …

 

The average number of UK rental properties coming on the market in the five years before the pandemic was 117,510 per month. In the last two years, it has been 99,747 properties per month, a drop of 15%.

 

Talking to agents in Huddersfield, they are witnessing large numbers of eager tenants attending viewings as soon as a property is listed. Such data is echoed by estate and letting agents I know nationwide, many of whom highlight the wide gap between soaring demand and the limited supply of rental stock.

 

Encouragingly, even though the overall average of properties coming onto the market for rent for the last two years is 15% down (as mentioned above), that statistic does mask the fact that 2023 is very different to 2022’s available rental properties. The number of new properties being introduced to the rental market in the last ten months (Jan to mid-Oct 2023) is 6.9% higher year-on-year than the same time from the year before (i.e., Jan to mid-Oct 2022).

 

While the continual surge in rental prices and the mismatch between available properties and tenants may make the market challenging for many to navigate, signals suggest an easing of this pressure.

 

With new rental listings at higher levels, a sustained balance between supply and demand may decelerate the annual growth of Huddersfield rental prices.

 

For Huddersfield tenants in this tight market, being proactive is crucial. Speed is of the essence when arranging viewings, especially amidst other commitments. Immediate property alerts on the portals and also cultivating strong face-to-face relationships with local letting agents can offer a competitive edge. Tenants must be clear about their property requirements; from budget constraints and intended stay duration. Flexibility, especially concerning the move-in date, can make an application stand out. Finally, having one’s finances and documentation ready can expedite the tenancy application process.

 

The evolving rental landscape is also prompting many to reconsider traditional preferences. Expanding search horizons beyond typical hotspots in Huddersfield might increase the probability of securing a property and introduce tenants to more cost-effective options.

 

For Huddersfield landlords, these national figures and regional and town-specific statistics provide a comprehensive overview. The underlying message is clear: despite the increase in rental properties, the rents continue to rise, painting a promising picture for landlords who continue to provide much needed homes for Huddersfield tenants.

 

As Huddersfield's trusted property consultant, we remain committed to keeping you informed and guiding you through these dynamic market shifts.

The Renters’ Reform Bill

Contrary to what some may say the Renters’ Reform Bill may well be a positive for landlords.  Long awaited since its initial promise in 2019, MP’s will have the opportunity to consider and debate the bill, no doubt as always there will be some deviation from what has been stated.

Some highlights of the bill below :-

 

• There will be a single Private Renters' Ombudsman

 

• There will be a new property portal which will provide greater clarity regarding compliance.

 

• There will be additional protection under Section 8 with the introduction of mandatory eviction, this occurs where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance.

 

• Section 8 provides a new ground for possession after a minimum period of six months - you can apply section 8 to a tenancy if you then wish to sell a property, or even where you wish to allow family members to move into a rental property.

 

• Tenants would need to provide two months’ notice when leaving a tenancy, to ensure you can recoup the costs of finding a tenant and avoid lengthy void periods.

 

• Stronger grounds to evict based anti-social behaviour

 

The bill in my view does not deserve the label of a landlord bashing license that some of the press have given it.

As the leading agent in the area with over 1,200 managed properties we are more than equipped to guide you through the process and as always I will keep my clients informed as changes emerge and when the new rules will come into play.

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

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

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

 

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

 

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

 

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

 

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

 

·         Under £100k – 59 days

·         £100k to £200k – 27 days

·         £200k to £300k – 81 days

·         £300k to £400k – 34 days

·         £400k to £500k – 91 days

·         £500k to £1m – 103 days

·         £1m and above – 73 days

 

And by type:

 

·         Huddersfield Apartment/Flat – 62 days

·         Huddersfield Terraced/Townhouse – 44 days

·         Huddersfield Semi-Detached – 29 days

·         Huddersfield Detached – 70 days

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Yours Sincerely

 

Chan Khangura BA (Hons) DipRLM MARLA MNAEA

Proprietor & Managing Director Whitegates Estate Agents Huddersfield & Brighouse

https://huddersfieldproperty.blogspot.com/