The West Yorkshire market town of Huddersfield is an attractive one for residential property investors. For one thing, it is benefiting from a 10-year regeneration plan – the Huddersfield Blueprint – which is already driving important changes across the urban centre. Focused on key themes including art and culture, leisure, businesses, public spaces and quality of life, it is the driving force behind more than £300 million of local investments.

Huddersfield is relatively small – it had a population of 95,900 at the time of the 2021 Census – so such a concentration of spending, and at such a scale, is bound to have a transformative effect on the local economy. That, in turn, is likely to support rising employment and, in time, growth in the local population, too. That would all add to demand for accommodation in the town, and help to support rising values.

These reasons alone would be enough to draw property investors’ attention to Huddersfield, but the town has another important asset that makes it still more attractive.

The University of Huddersfield

The town’s university is home to around 17,300 students. In the academic year 2019/2020, that number comprised 13,600 undergraduates and 3,705 postgraduates, together with 1,100 academic staff and a further 900 managers, administrators and other employees.

· 79% of students were undergraduates

· 21% were postgraduates

· 17% came to study in Huddersfield from overseas

· 71% studied full time; 29% were part-time

· 214 full-time undergraduate courses; 8 part-time

· 152 sandwich/placement courses

Those figures highlight the vital importance of the university to the community and to the local property market. They imply that the student body represents over 18% of the urban population, while the total number of students and staff together make up over 20% of the population. In other words, if we take those data at face value, then one in five of the town’s residents are directly connected with the university in some way. Significantly, they all require accommodation, so they represent an important and very reliable source of rental demand.

One can, of course, argue the calculations. That total population figure of 95,900 comes from the ONS’ 2021 Census data and it refers to the area shown on the map below.

However, the wider urban area has an estimated population of 141,692 so against that, the percentage of students will obviously be lower (at just over 12%). But conversely, if we are going to take that wider, subregional view, then we must also consider the presence and impacts of other educational institutions in the town and across its wider catchment area.

Further & Higher Education

Besides hosting two sixth-forms – Huddersfield New College (which has a student roll of 2,400) and Greenhead College (2,767 students) – Huddersfield is also home to Kirklees College, an important and popular institution of further and higher education. Here, around 1,200 staff teach an estimated 20,000 students. Some of those students will be aged 16-18, many of whom will live with parents, but Kirklees College also attracts a large body of adult learners who will want to live independently in the town. Courses for adults include, amongst others, HNCs/HNDs, vocational and professional qualifications, short courses and apprenticeships.

The college has numerous sites around Huddersfield and makes an important contribution to the local economy in terms of jobs and investment spending. It has a reported turnover of £44 million and, in 2013, it opened its new Waterfront campus at a cost of £74 million. Consequently, it is not only an attractor of rental demand; it is also helping to boost the economy, employment prospects and, indirectly, average disposable incomes. These are all factors that tend, ultimately, to support rising returns in terms of both capital and rental values.

Other Regional Universities

Huddersfield makes an excellent base for students living independently. It has its own, home-grown university and a college of higher education, of course, but it is also located within easy commuting distance of many other popular universities.

Given that renting in Huddersfield costs substantially less than in many surrounding cities, this makes it an attractive option for students in cost-conscious times. SpareRoom.com, for example, puts Huddersfield in the number one spot in its Top 10 Cheapest Cities list. Local room rentals cost an estimated £428pcm, which compares against a regional average of £507, an average of £533 in Leeds, and £615 in Manchester.

Institution Approximate Distance Average Room Rent*

University of Bradford 10 miles / 16km £441

University of Leeds 14 miles / 22km £533

Manchester Metropolitan University 22 miles / 35km £615

University of Manchester 22 miles / 35km £615

University of Salford 23 miles / 37km £615

University of Sheffield 23 miles / 37km £482

Sheffield Hallam University 23 miles / 37km £482

* Source: SpareRoom.com UK Rental Index, Q4 2022.

Moreover, the University of Huddersfield has additional campuses in nearby Barnsley (14 miles) and Oldham (15 miles). Each offers degree-level studies amongst many other courses and qualifications.

In short, literally hundreds of thousands of university students live and study within a radius of less than 25km from Huddersfield. Undergraduates, postgraduates, academic staff and other university employees therefore constitute a large and growing source of local demand for affordable but good-quality residential property.

Housing Supply in Huddersfield and Kirklees

In March 2023, Kirklees Council said that the district was “desperately short of houses.” Supply is severely restricted in the town; particularly the supply of more affordable properties of the kind that students typically prefer. Part of the reason is the nature of the local landscape; it is hilly and much of the surrounding land is too steep to make house-building viable.

Changing regulatory demands are also hitting the supply of affordable rental property. A significant percentage of the town’s housing stock is old and relatively badly insulated. Consequently, local landlords with these older, poorer-performing units are now facing the prospect of having to pay for potentially expensive energy efficiency upgrades. Within the next few years, it’s likely that landlords will only be permitted to let properties that achieve an EPC rating of C or above. Some of those with properties below that minimum standard have already decided to sell up rather than improve. That’s a national trend, certainly not unique to Huddersfield, but it’s a shift in the market that could further constrain rental supplies in the coming years.

Property Price Trends

All else being equal, these two factors – intense demand and severely limited supply – should see average values rising as tenants compete with one another to secure the accommodation they need. The cost-of-living crisis is exerting a braking effect, of course, but with CPI inflation expected to fall steadily in the second half of 2023 and over the course of 2024, some of those affordability pressures should abate. Thus, in the longer term, values can be expected to rise and investment returns should improve accordingly.

Numerous sources suggest that, by various metrics, properties in Huddersfield, Kirklees and the wider Yorkshire & Humber region have been outperforming UK averages over the last year, and that they should continue to do so in the years ahead.

For example, the latest 5-year Residential House Price Forecast from Savills predicts that Yorkshire & Humber will see the UK’s joint fastest rate of price-growth. Properties in the region are expected to deliver cumulative capital growth of +11.7% by 2027. That compares against a UK average of just +6.2% over the same period.

Likewise, according to the UK Rental Index from SpareRoom.com, average rents in Huddersfield have been rising at an impressive rate; by +12% between Q4 2021 and Q4 2022. It also notes that between 2020 and 2021, local rental demand rose by +26%.

The UK’s Highest Demand for Flats

Importantly for those considering the student property market, local demand appears to be concentrated upon smaller, more affordable units rather than on larger family homes. In February 2023, the Huddersfield Examiner reported on a survey by Zoopla, noting that “demand for flats in Huddersfield rose faster than anywhere else in the UK, as homebuyers ditched cities in favour of nearby cheaper towns… Demand for a flat in the HD postcode area as a proportion of all residential properties rose from 2% in January 2022 to 15% in January 2023. That's an increase of +13.1%.”

This rising demand could help smaller apartments and student properties to buck the UK national trend this year and see a faster return to strong price growth.

Student Property Options in Huddersfield

Many undergraduates will stay in university halls of residence during their first year of study but, thereafter, they will typically move out, supporting dependable demand within the private rental sector.

Until relatively recently, houses in multiple occupation (HMOs) were a favoured form of student accommodation. However, forthcoming energy efficiency regulations could drive a mounting trend away from older properties. As previously noted, landlords are becoming increasingly wary of the likely retrofit costs, while prospective tenants – stung by rising energy prices – are wary of committing to tenancies in properties that are going to be expensive to heat.

For these reasons, the market is likely to see a shift in preferences towards either purpose-built student accommodation (PBSA) or modern conversion projects that produce new student properties. In the latter case, existing buildings are typically remodelled and fitted out with new insulation, glazing and other energy-saving technologies in order to achieve a much better EPC rating.

In either case, there is an obvious appeal to students. These more modern schemes tend to be built to higher standards, they will be less costly to heat and they are typically built with students’ specific needs in mind. Those needs might include, for example, good security measures, attractive communal spaces and, crucially, high speed internet connections.

For investors, there are similar attractions. As new developments (either new-build or newly refurbished) they should expose the landlord to far fewer maintenance and repair costs, and they should obviate the need for expensive energy efficiency improvements further down the line.

Location

For investors considering the acquisition of a new student property in Huddersfield, some districts are worthy of particular note. The University of Huddersfield’s main site is the Queensgate Campus, which lies just outside the Queensgate ring road, about 500 metres southeast of the town centre. The campus bestrides the Huddersfield Narrow Canal and the area has reportedly benefited from around £250 million of investment on the part of the university.

Important recent development projects have included:

· Creative Arts Building (opened 2008)

· Business School (2010, £17 million)

· Buckley Innovation Centre (2012, £3 million)

· Student Central Building (2014, £22.5 million)

· Oastler Building for Law (2017, £27.5 million)

· Barbara Hepworth Building (2019, £30 million)

This is a considerable amount of activity to be concentrated in such a small area, but there is more to come. In January 2023, the Huddersfield Examiner wrote: “The University's Health and Wellbeing Academy will be erected on the former leisure centre site in Southgate and will train nurses, paramedics and social workers.” The development will inject an additional £40 million into the town’s economy and will inevitably attract even more students to the area.

Bearing all that in mind, investors might logically be attracted to the south-eastern quarter of the town. However, given that Huddersfield is relatively small and compact, there really are few districts that aren’t set within easy commuting distance of the university. Popular neighbourhoods for students include the town centre itself, Moldgreen (less than 1km east of the university campus), Newsome (about 2km to the south), and Springwood, which lies around 750m west of the university but only about 400m to the northwest of Kirklees College.

It’s also important to note that improvements are taking place right across Huddersfield, so it won’t only be the urban centre and the Southgate area that are likely to benefit. Various other projects should mean a boost employment prospects, quality of life and average earnings, thereby creating even more favourable conditions for investors. Notable examples include:

· The redevelopment of the former Huddersfield Technical College site: £43 million

· The transformation of the Huddersfield Sports Centre site to the north-east of the town: £250 million

· Huddersfield Royal Infirmary’s new A&E Centre to the north-west: £15 million

· The refurbishment of the George Hotel: £20 million

· Improvements to Huddersfield bus and railway stations in the town centre: £20 million

Investing in Student Property in Huddersfield – a Summary

Student accommodation in Huddersfield is in great demand but short supply. Consequently, it represents an attractive asset class for investors who may be looking for strong, dependable returns in a location that has obvious growth potential.

The town itself is benefiting from hundreds of millions of pounds of regeneration spending, so it should remain a rewarding property investment destination on its own merits. However, millions more are being spent by the university and by Kirklees College, and ongoing developments such as the new Health and Wellbeing Academy should attract even more students to the area.

In recent years, strong rental demand and relatively low property prices have enabled landlords to achieve good yields, impressive capital appreciation, and a rate of rental growth that is significantly better than the UK-wide average. Those forces aren’t likely to change in the foreseeable future, so Huddersfield should remain an impressive prospect for investment, particularly when it comes to student property. Moreover, the emerging preference for smaller, more affordable apartments suggests that market conditions are only likely to improve in 2023 and in the years ahead.

To find out more about property investment opportunities in Huddersfield or more generally across Yorkshire, please call our advisory team on 01244 343 355.

The Student Property Market in Huddersfield