Every Huddersfield Homeowner & Landlord to Receive up to £5,000 Grant for Roof Insulation & Double Glazing from September What you need to know

The Chancellor announced on Wednesday 8th July in his mini Budget some interesting news for Huddersfield homeowners and Huddersfield landlords. Rishi Sunak is going to give ‘The Green Homes Grant’ of up to £5,000 to cover two-thirds of the costs of environmentally friendly upgrades to your Huddersfield property, with the homeowner covering the other third. There are also enhanced grants of £10,000 for the poorest households where 100% of the cost will be met by the Government.

This is nothing new mind you. The coalition Government in 2013 announced The Green Deal. That deal was in theory to have been a help for the builders, energy saving and home improvement industry, as the Government hoped many would take up environmentally friendly improvements to save energy (and ultimately greenhouse gases). Yet by the time it was brought to an end two years later only 14,000 households had applied, costing the taxpayer £238m (or £17,000 per household). That doesn’t sound good value to me – yet who am I to comment?

Anyway let’s not be negative, as improving our homes does makes sense – after all, research shows Brits have the draughtiest homes in Europe. A recent survey suggests UK homes “leak” heat up to three times more quickly than more energy-efficient homes on the continent.

Data from 80,000 smart thermostats across the EU were reviewed to measure how quickly a home at 20°C inside cooled once the heating was turned off (when the outside temperature was 0°C). Within 5 hours, the average British home dropped by 3°C, the French came in second at 2.5°C yet the Germans came in at just 1°C, meaning British homes clearly need more heating (i.e. greenhouse gases) to keep them warmer.

The chancellor has allotted £2bn to the scheme, which pays for two thirds of the cost of the upgrade and stated that more than 650,000 homes would be upgraded.  This could save those households a total of £195m a year in heating bills (or the equivalent of £300 a year per household), cutting greenhouse gases and saving jobs in the construction industry. The grants can be applied for from September and is open to Huddersfield homeowners and private sector Huddersfield landlords. Applications must be made before March 2021 and the Treasury have stated about half of the fund would go to households with the lowest incomes (how low is still to be announced), with an enhanced grant of up to £10,000, saving them up to £600 per annum each on their heating bills.

The average Huddersfield home annually produces 4.392 tonnes of CO_{2 ,} compared to the national average of 4.101 tonnes

Due to the particular individual nature of the properties in Huddersfield and their construction type, with suitable improvements in insulation, double glazing and draught proofing, Government statistics state that this could be reduced to 2.541 tonnes for Huddersfield homes if suitable work (as per the Green Homes Grant) was carried out.

Why is this important? Well UK householders spend £34.735bn a year on their electric and gas bills – this is a lot of money. In fact, looking specifically at Huddersfield properties …

Huddersfield householders spend £755.65 per year on

heating their homes (compared to the national average of £669.34 per year)

Yet, if Huddersfield householders carried out the energy improvements that ‘The Green Homes Grant’ suggests their energy bills for heating alone would reduce to £547.58 per year ... quite a saving over a decade and beyond (enough to buy a decent holiday – whatever one of those is!).

So, with Huddersfield homeowners and Huddersfield landlords being able to spend the grant on loft, floor and wall insulation, low carbon gas boilers, heat pumps, double or even triple-glazed windows, energy-efficient doors and low energy lighting … everyone should win – the environment, the economy and household budgets. More details on the scheme should be released by the Government in August.

Huddersfield Home Buyers & Landlords Set to Save £2,227,720 in Stamp Duty Over Next Nine Months

The British are infatuated with owning their own property and politicians know that. Margaret Thatcher used it as a vote winner in 1979 when she allowed council house tenants to buy their own home. Coming to the present day, Boris Johnson’s Conservative government have anxieties that the Brits have not been buying nearly enough homes lately and, as with all countries in the world, the British property market was put ‘on ice’ for several months to help contain the Coronavirus, exacerbating the problem.

The Chancellor, Rishi Sunak, announced plans to boost the property market by momentarily scrapping Stamp Duty Tax (a tax paid by homebuyers) when they buy a property that costs less than £500,000.

Interestingly, Stamp Duty was originally introduced in 1694 as a way to raise funds for The Nine Years' War (1688–1697) against Louis XIV of France and applied to property and some legal documents.

Why is this important? Well the Government recognise that when the property market is working well, the economy also tends to work well, yet one of the barriers to people moving home is Stamp Duty. Even before Coronavirus, Brits were moving 40.21% less than they were at the start of the millennium, and now with this dreadful situation, the natural reaction is for people to stay put in their own homes, meaning another potential nail in the coffin for the economy.

Stamp Duty has raised not an insignificant £166.53bn since 1998, impressive when you consider the NHS costs £129bn per annum. Looking at more recent figures, the Government currently raise £1.045bn per month from Stamp Duty Tax and this statement will remove a good chunk of that from the Chancellors coffers each month, yet the Government knows a healthy property market will help the wider economy.

As Stamp Duty is a transaction tax, it restricts labour market mobility, making people who are thinking of switching jobs think twice before moving. Stamp Duty also holds back elderly homeowners from downsizing to smaller homes, which is an issue for the UK, as we don’t have enough homes to meet supply and also curtails first time buyers as it forces them to use some of the savings on the tax, as opposed to using for a deposit.

Before the changes, the Stamp Duty thresholds were as follows: 

-          Zero percent up to £125,000

-          Two percent of the next £125,000 (the portion from £125,001 to £250,000)

-          Five percent of the next £675,000 (the portion from £250,001 to £925,000)

-          Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)

-          12% of the remaining amount (the portion above £1.5 million)

and between the 8^th July 2020 and 31^st March 2021

-          Zero percent up to £500,000

-          Five percent of the next £425,000 (the portion from £500,001 to £925,000)

-          Ten percent of the next £575,000 (the portion from £925,001 to £1.5 million)

-          12% of the remaining amount (the portion above £1.5 million)

Landlords and buy to let landlords will also benefit from these reduced rates yet will still have to pay their additional premium for second homes (as they have since April 2016).

To give you an idea how significant this is, if these rules had been in place exactly a year ago for Huddersfield properties purchased under £500,000 (i.e. between the 8^th July 2019 and 31^st March 2020).

Stamp Duty would not have been paid on 1,218

Huddersfield properties, worth in total £263,635,700

Anyone buying any home in Huddersfield over £500,000 are also winners in this, as they will save having to pay the first £15,000 in stamp duty (under the old scheme). This is because during these 9 months, stamp duty is only paid on the difference over £500,000 (so if you buy a property for say £620,000 – one only pays the stamp duty on the difference between £620,000 and £500,000 i.e. £120,000).

I’m all for reducing Stamp Duty, which is imposed progressively at higher rates the higher a property costs (as you can see from the tables above). Yet, short-lived changes to property taxation risk warping the property market and generating a ‘property market hangover’ in Spring 2021. I am part of a group of 2,500 estate and letting agents from the UK, and most of us were running at 150% speed before this announcement, coping with the post Coronavirus explosion in demand.

Now it seems that the ‘feast’ will continue until the end of March 2021 as many more people will move to take advantage of the cut in tax. However, some are suggesting this could lead to ‘famine’ down the line as it will stop people moving into the late spring and summer of 2021.

History tells us different stories on the influence on transaction volumes from changing Stamp Duty rates. In 1991 the Tory’s raised the Stamp Duty threshold at which house buyers started paying and Gordon Brown did so in 2008 when we went into the Credit Crunch. More recently, both George Osborne and Philip Hammond fine-tuned Stamp Duty so that landlords had to pay an additional Stamp Duty Premium after March 2016 whilst first-time buyers pay less Stamp Duty and the purchasers of more expensive homes (over £1.5m) pay more.

The Stamp Duty changes for landlords in 2016 affected the property market only for a short while and by the autumn, transactions levels had returned to normal. However, in 1991, John Major’s Stamp Duty change encouraged home buyers to bring forward home purchases but nevertheless the property market ground to a standstill again once the benefit ended (although the steps up the 1990’s Stamp Duty levels were much harsher as the tax applied to the whole purchase price, not the margin steps as it had in the 1990’s).

So how much money will Huddersfield people save when buying a home under £500k?

The average Stamp Duty paid by those Huddersfield home buyers in the 9 months between the 8^th July 2019 and 31^st March 2020

was £1,829

Being objective, I can see why the Chancellor could see this as a suitable way to motivate spending because when people move home, they are more inclined to spend comprehensively on property renovations and the services of solicitors, home removal people, tradesmen and estate agents. So, drastically reducing Stamp Duty will undoubtedly help the UK economy, or at least contain some of the damage from the Coronavirus.  

Also, the experience of being in lockdown will have confirmed to many Huddersfield people that they need a bigger home or one with a bigger garden. I also suspect other people may be able to work from home on a more long-lasting basis, meaning there could be a shift from the larger cities to outlying towns and even a move to the countryside.

So, these are my thoughts, what are yours?

Huddersfield Property Market – the Last 10 Years

One of my Huddersfield landlords contacted me last week from Brighouse, after he had spoken to a landlord friend of his from Ferndale. He told me they were deliberating the Huddersfield property market and neither of them could make their mind up if it was time to either sell or buy property following Covid-19. His friend said he would wait to see what would happen to property prices following Covid-19, yet my landlord wanted to pick my brain in order to help him decide what to do.

I said the press are aware bad news sells newspapers and the doom mongers are plying their trade on uncertainty in the world economic situation. Roll the clock back to the Credit Crunch of 2008/9, and there were quite a few landlords in Huddersfield who had overexposed themselves with high percentage loan to value buy to let mortgages, backing the hope they would make their money on the capital growth, yet fell foul of a drop in rents and thus got bankrupted (but who could blame them when the property market was rising at 15% to 20% a year in the early 2000’s and banks like Northern Rock were giving mortgages out to anyone with a pulse and note from their Mum).

Thankfully the Bank of England changed the rules on all mortgages in 2014 banning self-certification mortgages, tightening the rules around interest-only mortgages and the requirement around affordability to be checked, plus a tough stress test if interest rates rose. It’s obvious we are going to enter into a recession because of Covid-19, yet this time the Huddersfield property market is better placed to weather the storm.

However, gone are the days when you could buy any old house in Huddersfield and it would make money. Yes, in the past, anything in Huddersfield that had four walls and a roof would make you money because since World War 2, property prices doubled every seven years … it was like having a free cash machine.

If a landlord bought a Huddersfield terraced / town house in the summer of 2000, he or she would have seen a profit of £67,600 to its current value of £110,100, a rise of 158.9%

Nonetheless, if that landlord had bought the same property in 2010, the Huddersfield landlord would have only made £10,400 profit (a 10.4% increase). Yet since 2010, the country has experienced 31.5% inflation, meaning our Huddersfield landlord has seen the ‘real’ value of their Huddersfield property decrease by 21.1% (i.e. 10.4% less 31.5% inflation).

And this is my point. Nobody has been complaining about the property market in the last ten years, yet landlords are still worse off in real terms. If we do see a slight dip in property prices because of Covid-19 (looking at the market at the moment I haven’t seen any indication of its slowing down from its post lockdown takeoff), but if we do, Huddersfield landlords need to realise property values aren’t the only indicator of whether the property market is good or not.

The reality is, since around the early 2000’s we haven’t seen anything like the capital growth in property we have seen in the past and it’s not predicted to grow at the rates it has previously done either. So, I believe it is high time for any Huddersfield landlord, pondering investing in Huddersfield property to stop believing the hype and do some serious research using independent investment expertise. You can still make money by buying the right Huddersfield property at the right price and finding the right tenant.

Think about it, properties in real terms are 21.1% lower than a decade ago, so investing in Huddersfield property is not only about capital growth, but also about the yield (the return from the rent). It’s also about having a balanced property portfolio that will match what you want from your investment – and what is a ‘balanced property portfolio’? Well we discuss such matters on the Huddersfield Property Blog ... if you haven’t seen the articles, then it might be worth a few minutes of your time? 

The Huddersfield Post Lockdown Property Market What have we learned in the first month?

From talking to most of the Huddersfield estate and letting agents and our own findings, it might surprise many of you that new enquiries from homebuyers, tenants, landlords and home sellers have been at record levels since lockdown was lifted from the property market in mid-May.

There are a number of reasons for this. Firstly we had the pent-up demand for Huddersfield property from the Boris Bounce in January and February. Next, many Huddersfield people were planning to move this spring yet were prevented doing so because of lockdown, and finally, surprisingly, an advance wave of home movers seeking to bring their Huddersfield moving plans forward because of a fear of a second Covid-19 wave later in the year.

So, what does all that look like and how does it compare to the last 12/18 months?

Data from Yomdel, the live chat and telephone answering service for a quarter of UK estate and letting agents, is able to track objective and more current information from across the UK on what is really happening. Each week, they are dealing with thousands of enquiries including:

·         Seller enquiries (i.e. house sellers looking to put their property on the market)

·         Buyer enquiries (i.e. people looking to view a property on the market with the intention of buying it)

·         Landlords enquiries (i.e. landlords looking for tenants for their rental property)

·         Tenant enquiries (i.e. people looking to view a property on the market with the intention of renting it)

They have created a rolling weekly average of those enquiries for the whole of the UK for the 62 weeks before the country went into lockdown. Then they compared that 62 week average with specific time frames, namely the 10 weeks of the run up to the General Election, the 8 weeks of Post Boris Bounce in January and February 2020, the weeks of lockdown in March, April and early May and then finally, from mid-May, the post lockdown.

You might ask why tracking estate and letting agency enquiries is so important?

Enquiries in letting and estate agencies are the beating heart of the property market – they are the ECG machine of the estate and letting agency. Of course house price data has it’s place and is lauded by the national press as the bellwether of the property market, yet it takes 6 to 9 months for the effects of what is happening today to show in those house price indexes, whilst these enquiries are what is happening now.

Have a look at the data in the graph and table, it can be seen in the 8 weeks up to the General Election, every metric was down. Next, the post Boris Bounce saw house seller and house buyer leads increase yet note how low tenant enquiries were (hardly any change from the run up to the election), everything dipped during lockdown as expected, yet look at all the metrics post lockdown … amazing! (e.g. if a number in the graph/table below is say -25%, that means its 25% below the rolling 62 week average, yet if it were +20%, then that would mean it would be 20% more than the rolling 62 week average)

	General Election Run Up	Post Boris Bounce	Lockdown	Post Lockdown
Seller Enquiries	-27.0%	20.6%	-41.9%	94.3%
Buyer Enquiries	-19.9%	12.9%	-9.3%	163.7%
Landlord Enquiries	-10.9%	1.0%	-27.6%	78.5%
Tenant Enquiries	-34.9%	-27.2%	-23.1%	92.5%

 

The numbers speak for themselves!

So, what is happening in the Huddersfield property market? Well, there is plenty of activity in the Huddersfield property market, yet that doesn’t mean everything is back to normal. Enquiries are an important metric, yet another way to judge the health of the property market is to look at the number of property transactions (i.e. people moving).

Now the Land Registry data isn’t quite as exhilarating, yet it is less volatile. Nationally, it shows that property transactions were at their lowest level since its records began in April 2005. The seasonally adjusted estimate of UK residential property transactions in April and May 2020 was 90,210, 53.4% lower than the 193,500 transactions of April and May 2019. Again though, this was because of the restrictions on moving during Covid-19. The stats for Huddersfield are still to be released yet rest assured I will share them in due course.

Looking again at what is happening now, when I look at the number of properties for sale…

255 Huddersfield properties have come onto the property market in the last 14 days alone, and of those, 37 are already sold subject to contract

So, what of the future of the post-lockdown Huddersfield housing market? While a stern recession seems almost guaranteed, a housing market crash is not. Many newspapers are predicting property values to fall in 2020, then rise reticently from the ashes in 2021. The fact is, nobody knows. The property market is driven a lot by sentiment. Buying a home is not like buying stocks and shares – it’s a home to live in … and those Huddersfield landlords who are looking for an investment opportunity, often let their heart rule the head (again sentiment) when investing in property.

Property always has, and always will be a long-term investment. Many of you Huddersfield people reading this, especially potential Huddersfield first time buyers, have been putting off buying your first home because of Brexit, now its Covid-19, and in a few years, it will be something else. There will always be ‘something else’… and you could get to your 50’s and 60’s, still renting, waiting for the ‘next thing’ to pass before you buy … and end up buying nothing.

Nobody knows what the months or years ahead will bring ... yet what I do know is, people will always need a place to live. Please let me know your thoughts in the comments. Tell us what your experiences are as a Huddersfield landlord or homeowner, tenant or buyer so we can all learn from each other.