Two of our Huddersfield student HMOs had conditions imposed on the planning approval requiring the premises only be let to students. Students are exempt from council tax and if we are presented with a council tax bill (which happened recently) we pay the council tax and have it quickly refunded.
For now we are safe, however, in future we know we have to be very careful in the design and implementation of HMOs. Councils seem to have identified a cash cow in imposing a council tax banding on individual rooms, depending on the range of facilities offered to tenants. Yesterday I found this excellent guide on criteria published by Comfort Lettings, which I thought could be a valuable share.
Number 2 in their list of areas for property investment growth potential:
“2. Leeds, York and Harrogate – Yorkshire & Humberside. These are the affluent areas of the region where people are not as constrained by affordability. And yet, because prices are nowhere near the £1m, £2m, £3m mark that they are in London, growth has not been hit by stamp duty.”
So the Telegraph informs everyone of something we already know. The Leeds, York, Harrogate triangle is full of opportunity but there are subtle differences in the types of investment which will work efficiently in each area.
In Harrogate in particular, house prices have historically held well in recessions, so if you want to add a layer of protection to your asset pick your location very carefully. Harrogate is a great choice to protect capital but, overall, rentals yields are tighter than many areas of Leeds, where capital growth will still be limited despite infrastructure investment, but short term yields are more attractive. York has a fine mix of both opportunities but there are local factors such as a very strict implementation of Article 4 across the wider city inhibiting HMO investments.
I can’t stress it enough, local ‘boots on the ground’ with specialist local knowledge are what you need for confident, profitable and secure investments.
In six months time we could be wondering why we were worried. But, if there is economic trouble in China ahead it could knock confidence in the stock market and housing market, and in the long term it could impact jobs and companies in Britain that sell products to China, Mr Chegwidden explained.
There’s plenty of optimism for the next few years, both in the student sector and particularly Northern investments. A word of warning though, the report is soaked in one over-riding assumption – that international students will not be included in future migration target numbers. As long as they are not, Savill’s forecast 6% annual growth in numbers over the next 3 years. Well, that includes 2 years of the Brexit negotiation! If they are included – who knows how numbers will be affected?
Either Savill’s have someone in a position to know, or they’re taking a big punt.