Huddersfield and Kirklees Council House Waiting List Drops by 25.5% since 2011

In 1979, more than 4 in 10 British people lived in a council house, yet today that figure is only 1 in 12, whilst according to Shelter 65% of families on the Council House waiting lists had been on those lists for more than a year and 27% had been waiting for more than five years.

One solution to the housing crisis has always been for the local authority to build more homes, yet should the state provide people with secure and dependable places to live – or is that an out-dated point of view? To look at this objectively, let’s take a step back.

After WW2, both Tory and Labour governments were building council houses in massive numbers, yet it might surprise you to know that more Council houses were built per year under Tory Governments than Labour ones between the years 1945 and 1970.  
Everything changed in 1979, when Margaret Thatcher delivered the right for Council tenants to buy their Council House (called the Right To Buy Scheme). Interestingly, Right To Buy was a Labour Party idea from one of Labour Manifestoes of the late 1950’s (although they lost to the Tory’s). Mrs Thatcher’s idea was based on massive discounts and 100% mortgages for those buying … but this was the real issue that has come back to bite us all these years later! Half the proceeds of the property sales went back to Westminster and the other half went back to the local authority – but the Councils half could only be spent on reducing their debt – not to be spent on building more Council houses.. hence why we have a shortage of council houses.

In 2011, Central Government gave local authorities the power to limit people’s entitlement for social housing (aka Council Housing), hence removing those people that did not have an association or link to the locality.

Today, in Huddersfield and the whole of Kirklees, the Council House Waiting List has dropped by 25.5% since 2011, meaning

10,977 families are waiting for a Council House

in Kirklees

Interestingly though, if our local Council House Waiting List had dropped by the same amount as the national one, the waiting list figure would be 8,995 instead, because nationally Council House waiting lists are 38.6% lower than 2011.

So where are these Huddersfield families all living and what does this mean for Huddersfield homeowners and Huddersfield Landlords?

Quite simply, private landlords have taken up the slack and housed all those people that were on the waiting list. This is important as more and more tenants are stopping longer in the Private Rented Sector - the average length of time of a tenant stays in the same property is now 4 years. Renting is becoming a choice for many, as the years of this Millennium roll on. So much so, would it surprise you to know that renting a house can be more expensive than buying it as we have these ultra-low mortgage rates and 95% mortgages freely available?

Rents in the Rental Sector in Huddersfield will increase steadily during the next five to ten years. Even though the Council House Waiting List has decreased, the number of new council and housing association properties being built is at a 75-year low. The government campaign against buy to let landlords together with the increased taxation and the banning of tenant fees to agents will restrict supply of private rental property, which in turn using simple supply and demand economics, will mean private rents will rise – making buy to let investment a good choice of investment vehicle again (irrespective of the increased fees and taxation laid at the door of landlords). 

..and for home owners (and landlords) Huddersfield property values will remain strong and stable in the medium term, as the number of people moving to a new house (and selling their old property) will continue to remain limited, meaning that due to lack of choice and supply Huddersfield buyers will have to pay decent money for any property they wish to buy (especially ones in good locations and presented well).

Interesting times ahead for the Huddersfield Property Market!

Huddersfield Property Market Do We Have the Right Sort of Huddersfield Homes For the 21st Century?

Would it surprise you to know that in some parts of Huddersfield, predominantly prosperous areas with high proportions of mature residents, the housing crisis is not one of supply so much as dispersal of that supply? Theoretically, in Huddersfield there are more than enough bedrooms for everyone - it’s just they are disproportionately spread among the population, with some better-off and more mature households living in large Huddersfield homes with many spare bedrooms, and some younger Huddersfield families being over crowded.

Yet it is not the fault of these well-off mature residents that this is the current situation. Let’s be frank, Huddersfield doesn’t have enough housing full stop (otherwise we wouldn’t have the large Council House waiting list and all the younger generations renting instead of buying), but up until now it hasn't been clear that Huddersfield actually also has the wrong types of properties.

We're not building the smaller homes in Huddersfield that are needed for the starter homes and we aren’t building enough bungalows for the older generations, so they can be released from their larger Huddersfield homes, thus allowing those growing Huddersfield families to move up the ladder.  

Looking at the stats for Huddersfield, and HD1 in particular...

When I compared Huddersfield (HD1) with the regional stats of the HD postcode, the locality has proportionally 133% more apartments, yet 65.8% less detached homes. Looking nationally, Huddersfield (HD1) has proportionally 96.1% more terraced/town houses and proportionally 67.5% less apartments.

I am finding that there has been a shortage of smaller townhouses and smaller apartments being built in Huddersfield over the last 20 years, because most of the new builds in the last couple of decades seem to have been either large executive houses or the apartments that have been built were of the larger (and posher) variety, even though demand for households (as life styles have changed in the 21^st Century) have been more towards the lower to middle sized households.

The builders do want to build, but there's a deficiency of building land in Huddersfield, and if there's a shortage of building land, then of course new homes builders build whatever gives them the biggest profit. The properties that give them the largest profit are the biggest and most expensive properties and they certainly are not bungalows as they take up too much land. So who can blame them?

Yet would it surprise you to know that it’s not a lack of space (look at all the green you see when flying over the UK), it’s the planning system. Green belts must be observed, but only 1.2% (yes 1.2% - that isn’t a typo) is built on in this country as a whole with homes - we need the planners to release more land (and then force/encourage builders to build on it - not sit on it). Another problem is that of the smaller new homes that have been built, most of them have been snapped up for renting, not owning.

So, what’s the answer? Build more Council houses? Yes, sounds great but the local authority haven’t enough money to cut the grass verges, let alone spend billions on new homes in Huddersfield. The Government did relax the planning laws a few years ago, for example for changing office space into residential use, yet they could do more as currently new homes builders have no incentive to build inexpensive homes or bungalows that the system needs to make a difference.

So, what does this mean for Huddersfield homeowners and Huddersfield landlords?

Changing the dynamics of the Huddersfield, regional and national property market will only change in decades, not years.  The simple fact is we are living longer, and we need 240,000 to 250,000 houses a year to stand still with demand, let alone start to eat into 30 years of under building where the average has been just under 170,000 households a year.

That means, today as a country, we have a pent-up demand of 2.25m additional households and we need to build a further 4.2m households on top of that figure for population growth between 2019 and 2039. So, irrespective of whether we have short term blip in the property market in the next 12/18 months, investing in property is, and always will be, a great investment as demand will always outstrip supply.

26% more homes for sale in Huddersfield than a year ago

One of the key factors of the health of the Huddersfield property market is the number of properties for sale at any one time. The issue with housing is that when demand goes up, unlike with a chocolate bar factory, who can add a couple of hours overtime to increase supply/production to satisfy demand, it takes a good 18 months to two years from planning permission to someone moving into a home.  I have talked at length (and proved) in previous articles that we are still not building enough homes in the long term in the Huddersfield area.. yet for the short term, a good indicator is the number of properties for sale and how long they have been on the market.

How long a property has been on the market is important as a guide to how the property market is performing – potential buyers can always find this information on the Rightmove and Zoopla listings (if you don’t know where – drop me an email or message and I can let you know).

So, let’s have a look at what is happening in Huddersfield, both in terms of the number of properties for sale and how long they have been on the market compared to a year ago, then discuss what that means for the current state of play of the Huddersfield property market. So to start, let’s look at the number of properties for sale in Huddersfield compared to a year ago.

 

Interestingly, you can see there has been a proportional increase of 42% in semi-detached properties on the market in Huddersfield, yet only a 2% increase in apartments.. overall in the last year there are 26% more properties on the market in Huddersfield, compared to a year ago. Now, let’s look how long they have been on the market ..

Interesting to see that the biggest jump in the number of days on the market is detached houses, from 149 days to 183 days .. demand and supply working again. Although, the length of time an average Huddersfield property has been on the market has remained the same.

So what does this all mean for Huddersfield Buy To let landlords and Huddersfield homeowners looking to buy and sell?  Well, if you are thinking of selling, as the number of properties on the market has increased and the length of time Huddersfield properties are on the market has remained the same – you have to be mindful that realistic pricing is the key to get the property sold. If you are a buyer, that means you find yourself in a better position to negotiate a good deal on your Huddersfield property purchase.

There is an argument to suggest that property buyers see excessive days on the market as an indication that the seller is becoming desperate to sell because the property hasn’t sold. Buyers are also mindful to believe that there might be something wrong with the home, a defect that caused other buyers to pass it up. This can concern them when they view the property – if they view it at all, as that possible and perhaps made-up defect is on their minds, even if it is sub-consciously.

Normally, both assumptions are wrong. A property can loiter on the market for several reasons. The most common reason for a property sticking on the market is overvaluing or overpricing. In an effort to get the property on the market, some estate agents may have deluded the seller into believing the property was worth more than the property market will bear. Don’t get me wrong, if you don’t ask, you don’t get and homeowners naturally want to get the best price for their home, and so test the market. Yet, if you aren’t getting a steady stream of viewers after a few weeks, then that testing can back fire. You see, by setting the asking price too high to see if they can find someone to pay that inflated price, then finding there is nobody in the market that will pay the price, here lies the biggest trap for house sellers on keeping the inflated asking prices for too long.

Sellers can also get stuck on an asking price and they are willing to wait out the market until it catches up to what they want for their property – yet we aren’t in that type of property market at the moment. Consumer champion Which said that if you have to reduce your asking price by 5% or more, it adds an extra 64 days to the sales process meaning you might lose the property of your dreams.

Also, I have seen countless times, house sellers insist on an inflated asking price, reduce 12 weeks later, yet buyers think there is something wrong with it so the homeowner gets fed up and accepts a lower offer to get the property sold, whereas if the house seller had gone onto the market at the right asking price, they would get much nearer to what they deserve for their property.

So, if you are looking for a bargain to buy – all the Portals (Rightmove, Zoopla and On The Market) allow you to search and sort by the length of time on the market as well as the asking price.. who knows – there could be a bargain waiting for you!

Unemployment - the Secret Driver of the Huddersfield Property Market?

If you have been reading my articles on the Huddersfield property market recently, you will see that in the three years since the referendum of the ‘B’ word (that word is banned in our household), we have proved beyond doubt that it (whose name shall remain nameless) has had no effect on the Huddersfield property market (or the UK as a whole).

So one might ask, what does affect the property market locally? Well many things on the demand side include wages, job security, interest rates, availability of mortgages, confidence in the economy, inflation, speculative demand ... the list goes on. Yet as my blog readers will note, I like to delve deeper into the numbers and I have found an interesting correlation between unemployment and the number of properties sold (i.e. transactions).

Why transaction levels and not house prices? Well just looking at Huddersfield house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying - meaning to judge the health of a property market is very one dimensional. Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners - a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

Looking at Kirklees Council figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels.

Property transactions in Huddersfield dropped by 57.74%, whilst unemployment in Huddersfield rose by 56.8% during the 2007 to 2009 Global Financial Crash

Until recently, you can see there has clearly been a relationship between conditions in the Huddersfield job market and the number of people who move home ... interesting don’t you think?

Year	Unemployment % Rate in Huddersfield and Kirklees	Number of Properties Sold in Huddersfield and Kirklees
2004	4.1	8931
2005	4.4	7859
2006	5.1	9788
2007	5.2	9427
2008	6.7	4873
2009	8.1	3984
2010	8.4	4080
2011	8.9	4085
2012	8.3	4271
2013	7.9	4798
2014	6.6	5775
2015	5.9	5830
2016	5.1	5775
2017	4.9	6310
2018	4.9	6120

Now I am not saying unemployment is the only factor influencing the Huddersfield property - but it has to be said there is a link.

As a country (and indeed here in Huddersfield) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of the religion of following house prices (and I appreciate the irony of me writing these articles on Huddersfield - feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Huddersfield home. Now of course, I am not dismissing the current levels of Huddersfield house prices - we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically underperformed. 

So the next time you are considering a house move or buying a buy to let property in Huddersfield ... don’t make your judgement on house price growth alone.